Once a playground for Hawaiian royalty and well-known for its beaches and robust and vibrant environment, Waikiki has recently undergone some changes - recent development of luxury condotel Ritz-Carlton Residences, newly rebuild of International Market Place and renovated Royal Hawaiian Shopping Center. Some recent additions also include Trump Tower and Allure Waikiki luxury condos.
Buildings are mostly built in the 70’s and prior. The area has a mix of fee simple (owners own the unit and the land it sits on outright), leasehold, and condotels.
A leasehold condo unit will usually sell at a steep discounted price versus its fee simple counterparts. Leasehold means the owner own the land but not the unit. In addition to condo monthly maintenance fee, 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. A leasehold would usually specify several lease renegotiation dates during the tenure of the lease. The usual outcome of lease renegotiation would be change in monthly lease rent. Click Here to access more info about Leasehold in Hawaii.
A condotel usually means the building has a front desk and that short-term (nightly/weekly) rentals are allowed. As its name implies, a typical room size is similar to that of a hotel room, which can be between 200 to 300 sq. ft. for a studio unit. Condotel units usually do not come with parking stalls and a full-size kitchen. Therefore owners have to be prepared to rent parking stalls and that financing terms aren’t favorable (currently no conventional 30 years fixed rate mortgage is being offered) and thus cash purchase would be most ideal. Some condotels allow full-time owner-occupancy while some don’t. For some, the benefit of owning a condotel is ideal when owners can visit the island part-time and turn it over to hotel management (or private party) to handle short-term rentals when not being occupied by the owner.
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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.
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