Would you like an oceanfront home or condo on Oahu under $100,000?
This oceanfront home in Punaluu (MLS# 1102024) is only $94,000 LH
This oceanfront condo in Kahala (MLS# 1104631) is only $98,000 LH
Doesn’t this sound too good to be true? Well, it is if you read the fine print. We’ve been getting a ton of inquiries on these lately from buyers from all over the world. Both of these properties happen to be leasehold, where you don’t own the land. Any property you find listed that has an “LH” after the price means that it is leasehold.
Here are some of the terms of the leases according to MLS:
- On the oceanfront home, the land lease runs through 2029 and the monthly lease rent is $4,500 per month
- On the oceanfront condo, the land lease runs through 2027 and the monthly lease rent is $2,206 per month. In addition, you are looking at other monthly costs of $958 per month for maintenance fees and $273 per month for property taxes according to MLS.
Keep in mind, most lenders will require 5 years after the lease expires for an amortized loan. For instance, if you want to get a 30 year loan today, in 2011, the earliest the lease could expire would be 2046. Therefore, both of the properties above are subject to cash buyers.
Not all leasehold property is bad, however. You just need to look at the terms of the lease. Just keep in mind, if it looks too good to be true… it probably is. I recommend contacting a good Realtor on Oahu to help you navigate the buying process.