Difference between Fee Simple and Leasehold homes

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Real Estate

Besides Fee Simple (FS) which means you own both the unit and land outright, another form of ownership option to consider is Leaseholds (LH), which means you own the unit but not the land the unit is sitting on. In addition to the condo monthly maintenance fee (if any, or any other monthly fee associated with the ownership of the unit), you have to pay the landowner a monthly lease rent. And the land lease has an expiration date, once that date is up, there are usually 3 outcomes - 1. The landowner renews the lease for another extended period of time. 2. The landowner offers you to purchase the fee of the land for a price so that once you've purchased the fee, you own BOTH the land and the unit outright. 3. The landowner takes back the land AND the unit and you end up with nothing. 

Units typically do not come with parking and therefore needs to be rented. 

Another thing to take note is that the lease is renegotiated from time to time and when it does, there's a chance that lease rent will go up after the re-negotiation period.

 To get more info about Leasehold Click Here to access a PDF document authorized by the State of Hawaii. 




This content is presented for informational purposes only and the information is deemed reliable but accuracy not guaranteed. It is not my intention to provide any legal, financial, and business advice. For specific information, please consult a qualified advisor.