Leasehold vs. Fee Simple in Hawaii Real Estate

When buying property in Hawaii, one of the biggest questions is whether the home is leasehold or fee simple. Understanding the difference can save you time, money, and stress.

What is Leasehold Ownership in Hawaii?

You own the right to live in the property for a set number of years. The land itself is owned by a lessor (landlord). You pay lease rent on top of your mortgage. Lease terms usually run 30–60 years but can be shorter. When the lease ends, ownership of the property goes back to the landowner.

Pros of Leasehold

• Lower upfront purchase price
• Opportunity to own in desirable locations for less

Cons of Leasehold

• Lease rent can increase
• Financing may be harder
  
• Uncertainty when the lease expires

What is Fee Simple Ownership in Hawaii?
You own the land and the home outright. No lease rent. Freedom to sell, transfer, improve, or pass down the property. You are responsible for property taxes, insurance, and maintenance.

Pros of Fee Simple

• Full ownership and control
• Easier financing options
• More stable long-term investment

Cons of Fee Simple

• Higher purchase price
• Higher ongoing ownership costs

Leasehold vs. Fee Simple: Quick Comparison
Ownership: Leasehold = right to use for a term. Fee Simple = land and home outright.
Costs: Leasehold = lease rent plus HOA. Fee Simple = taxes plus HOA.
Price: Leasehold = lower. Fee Simple = higher.
Financing: Leasehold = limited. Fee Simple = widely available.
Control: Leasehold = limited. Fee Simple = full.

What Buyers Should Know in Hawaii
Big Island: Fee simple is most common, but leasehold condos still exist in resort areas.
Oahu: Leasehold condos are more common, especially in Honolulu.
Always check how many years remain on a lease. Anything under 30 years can be risky for financing.

Ready to Find Your Hawaii Home? Whether you are considering a leasehold condo in Kona or a fee simple home on the Big Island, I can help you evaluate your options and make the best choice for your future.

Contact Jennifer Bien Hawaii Real Estate to start your property search today.