Originally Posted by Ready
It means you are buying a property on leased land. So you will own the structure but not the land it is sitting on. There will be a separate fee you need to pay each month to the owner of the land for the right to maintain your property on it. You will need to see how many years are left in the lease and what protections may be included regarding fee increases.
The biggest problem with leased land is that once the lease is up the owner can refuse to renew the lease and they inherit your home for free. Or they could renew it under very unfavorable terms which make continuing to live there impractical. And if the lease has less than 30 years on it many banks will not issue 30 year mortgages on it. So if you ever need to sell it you will have to find a cash buyer.
Bottom line is, you donít want one of these properties unless itís a screaming deal.
What you have said is technically correct (at least to my knowledge). Having said that, I would not necessarily agree with your bottom line. There are ways to deal with the issue of lease-hold land (buy the fee, for instance) or purchase a property you'll not out live the lease. You can work with a realtor to find out your options - so I don't see leasehold as a deal breaker per se. It does complicate things and it is a strike against a property. Buying property in Hawaii takes some research and hopefully a trusted real estate person.
We got lucky and purchased fee simple (no lease - the fee had been purchased). Such properties are available but, as mentioned, they are more expensive. YMMV