Low priced listings get a lot of attention from buyers and for good reason. Hawaii real estate prices are higher than prices in other states and people rightfully try and find something they consider affordable. Here are some properties that people often find on the internet, along with explanations about why these properties not be what a buyer is hoping for.
Kalia, Inc. is located at 425 Ena Road in Waikiki. These one bedroom, one bath condos list as low as the $80,000 range.
The catch: Kalia listings are priced this low because the property is leasehold. The lease ends on 5/31/2018. Monthly maintenance fees and lease rent average around $550. Most (if not all) Kalia condos do not include parking stalls.
Kahala Beach, a condo located near the Kahala Hotel and Waialae Golf Course. This condo is on the beach. The two bedroom, two bath units have around 1,250 square feet of interior area, lanais and parking stalls. Units occasionally sell for less than $100,000.
The catch: Kahala Beach is a leasehold property with the lease ending in the year 2027. Monthly maintenance fees and lease rent run about $3,200 and up.
Makaha Surfside is the lowest priced beachfront condo on Oahu. Studios list as low as the $70,000's. There's no catch to a price like that.
The catch: some listings for $5,000 - $7,000 are for parking stalls. An owner cannot live in a parking stall.
Other properties listed for less than $100,000. These are usually leasehold properties. "Leasehold" means a prospective buyer (maybe you) would purchase the property as a "lessee" and have the right to use it for a set period. Besides the usual maintenance fees, there's lease rent, which can vary from $1 per month to any amount. Leasehold properties with short remaining lives must be purchased in cash. If there are only five years left on a lease, no bank will give a buyer a 30 or even a 15 year mortgage loan on it.
Sometimes the "lessor" offers the "fee" - which means they will offer for you to purchase the remaining interest in the property. Talk to your realtor and find out if the fee is available when looking at a leasehold property.
When we look for low priced Hawaii properties it's normal to expect reasonable monthly fees, a parking space etc. A few odd buildings such as Kahala Beach and Kalia are priced low - not because they are bad properties, but because they have short leases.
Aloha, Mike
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