The Kahala Beach Apartments is situated on one of the most prime pieces of real estate on Oahu. Plain and simle, it is hard to compete with oceanfront land in Kahala. Some of the highest luxury sales on the island in recent history took place on this same strip of beach.
View of Kahala Beach Apartments seen from the Kahala Hotel with Diamond Head in the distance
As of today, there are 8 available listings at the Kahala Beach Apartments, with an additional 5 units under contract. There have been half a dozen sales over the past 6 months that have ranged from $125,000 to $225,000. Why such low prices you may ask for such prime real estate? The reason is all of the units there are leasehold.
Leasehold ownership isn't the worst thing in the world. The "catch" with this particular project however are the carrying costs. As of today, the monthly lease rent to the landowner (Bishop Estate) in MLS is over $2200/month for the 2 bed, 2 bath units. In addition, the property taxes are just over $350/month and maint. fees are just over $950/month according to most of the listings in MLS. When you add that all up, it's over $3,500/month (with out a mortgage)!
The lease rent will most likely change in 2017 (ie. most likely go higher) and the lease only runs through 2027. With only 15 years remaining, this is truly a lifestyle play. You can live in one of the best locations on Oahu for a low purchase price, however one may have to ask themselves are the carrying costs and risk of forfeiting your investment in 15 years be worth it? Unfortunately, nobody has a crystal ball and only time will tell...
If you don't have that much risk tolerance and plan to hold on to your investment longer than 15 years out, here are some alternatives:
- Fee Simple Condos in Kahala (these, however will not be oceanfront)
- Fee Simple Condos in Diamond Head
- Fee Simple Condos in Hawaii Kai with similar monthly costs (substituting lease rent for a mortgage)
- Fee Simple Homes in Kahala (if money is not an issue)
Otherwise, if you're ok dropping down a few hundred thousand, carrying over $3500/mo. and the possibiity of turning the keys over in 15 years, I'd be glad to help you with a purchase at the Kahala Beach Apartments. I can also assist you with the sale of one if you don't plan to wait around long enough to find out. Like I said, only time will tell...