Punaluu Beach house in Hawaii
Who wants a home on a sandy beach in Hawaii? Any takers? How about 3/4 acres of land, is that okay too?
Now comes the more difficult question - the price! How much are you willing to pay or how much can you afford?
We have the lowest priced sandy beach frontage house with land for sale on Oahu and yes, there's a catch.
This land is leased and whoever "buys" it actually becomes a lessee. The lease has 18 years remaining, expiring on September 30, 2027. Monthly lease rent is fixed at $3,000.
The property was listed on April 3, 2009 for $175,000 and we recently reduced the price to $140,000. Think that price is too high for a lease? Take a look at the listings of homes for sale with sandy beach frontage, priced up to $1,000,000 by clicking the link below.
Oahu homes with sandy beach frontage to $1 million
The next lowest priced house is on 5,000 square feet of land and priced at $549,000. All of the other listings in this price range have small lots in the 5,000 - 12,500 square foot range.
Hawaii Leasehold Property Questions and Answers
Q. What type of person buys a leasehold property like this?
A. Someone who either doesn't want to tie up large amounts of money in real estate and can afford the $3,000 monthly lease rent.
Plenty of people love the idea of having a sandy beach close to their front door. This house in Punaluu offers that beach.
Q. Is there a potential for profit in the future?
A. Yes, however it's not as certain as a fee simple purchase. If the lessor decides to offer the fee simple interest in this property, the lessee can buy it and hold then later sell at market prices. When a lessor sells "the fee" it is usually at a favorable price. There's no guarantee on it though.
Another possibility is that the real estate market will pick up in the next cycle (say in the next five to ten years) and everything real estate related in Hawaii goes up in value. Should that occur, this property might appreciate handsomely, even if the fee is not offered.
Think that's ridiculous? Think again. We can e-mail examples of specific leasehold properties, showing how their values went up and down during market cycles.
What About the House - is it in Good Condition?
The house itself is in fair condition, built in the 1930's. The current owners made extensive renovations without obtaining permits. Perhaps because this is a beachfront property, the building permits department has been very tough with the owners and has not allowed him to obtain permits "after the fact."
The house is habitable (the owners have lived there for years), although it's likely that the buyer will either fix the house up some more or perhaps tear it down and start all over.
For more pictures, please visit our Hawaii Featured Listings page.
Does this sound like it might be worth a look? Contact Mike Bates (808) 548-1220 and arrange a showing!
Aloha, Mike
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