Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Market rate in that building is $2,000 to $2,500 (one is listed on Craigslist for $2,000 with NO parking but furnished). For a single person it doesn't look like a bad place - pool, walking distance to beach, can avoid the Waikiki traffic on the main drag to get downtown - the lack of parking is an issue and that area would likely have parking challenges for an affordable price.
Yes, the nicest fully renovated, tastefully furnished 2 bdrm units in that building rent for $2,500 tops. The lack of ANY parking whatsoever for a two bedroom unit puts a cap on the rents. Very few two bedrooms anywhere come with no parking or even an option to rent a stall. The one I listed is in below average condition... and therefore would rent for about $2,100 as I noted. They might get lucky and squeeze $2,200 out of it but any income would be absorbed by maintenance and repairs.
Any way someone tries to spin it, the property at a zero cost acquisition yields zero income with a zero chance for long term appreciation. Which is quite shocking when you think about it.
SPECIAL PENTHOUSE CORNER=END UPGRADED 1-BDRM 1-BATH FURNISHED APT. Enjoy fun views of Ocean, Coastline, Ala Moana Parades & more. The upgrades have increased the living area & window enclosures for enjoyment of the views. The Kalia is a special Oasis in Waikiki with fun amenities, Hawaiiana Gardens & Hawaiian Ambiance. Located 1/2 block from the Hilton Hawaiian Village, Ocean & EZ walking access to restaurants & so much more. Maintenance Fee $966.43 includes LeaseRent, Prop. Tax, all utilities & Basic Cable TV. Parking rented to Owner/Occupants
Pick the correct one!
Pick the correct one? LOL
I quoted YOUR post with YOUR link. There was only one.
EXCEPTIONAL 2-BDRM APT COMPLETELY UPGRADED WITH SUCH STYLE & FUN VIEWS from large lanai with enclosures. Apt is partially furnished, but style antiques furnishings are available for purchase negotiation. Kalia is a great community with security and Hawaiian ambiance, fun amenities including a heated/saltwater pool & lush gardens. Located 1/2 block to the beach, restaurants,Ala Moana Center. Maintenance Fee includes he lease rent,electric,hot/cold water,basic cableTV & common expenses. Lease extension paid by Seller & extended until 2048. Buyer must commit to owner/occupancor the 1st year.
EXCEPTIONAL 2-BDRM APT COMPLETELY UPGRADED WITH SUCH STYLE & FUN VIEWS from large lanai with enclosures. Apt is partially furnished, but style antiques furnishings are available for purchase negotiation. Kalia is a great community with security and Hawaiian ambiance, fun amenities including a heated/saltwater pool & lush gardens. Located 1/2 block to the beach, restaurants,Ala Moana Center. Maintenance Fee includes he lease rent,electric,hot/cold water,basic cableTV & common expenses. Lease extension paid by Seller & extended until 2048. Buyer must commit to owner/occupancor the 1st year.
You actually thought someone "prepaid" the lease on a leasehold property... through 2048. That is just hilarious.
This is why you don't make any sense with your analyses. You believe and trust everything realtors tell you. And worse, quote their information as being valid and accurate.
You should try being a bit more critical of the information realtors post. You'd be surprised how much misinformation (and sometimes outright lies) are presented by them.
You actually thought someone "prepaid" the lease on a leasehold property... through 2048. That is just hilarious.
This is why you don't make any sense with your analyses. You believe and trust everything realtors tell you. And worse, quote their information as being valid and accurate.
You should try being a bit more critical of the information realtors post. You'd be surprised how much misinformation (and sometimes outright lies) are presented by them.
Yep, all Realtors are crooks.
All brown people are lazy.
All Hawaiians are simple.
Geez pj737 you continually show your ignorance on real estate matters.
1. 50 year old high rises are falling down.
2. Condos have cap rates.
3. You can calculate a 0% cap rate.
4. Honolulu real estate ONLY increases in value at the rate of inflation.
Yes, it is not uncommon for a leasehold interest to be bought in a lump sum. I have done it twice! In fact in one of my buildings about 100 owners have done this exact same thing in the last three years. Your real estate experience must be severely limited, if any, if you have never run across this. Maybe you are actually from West Virginia.
You might want to familiarize yourself with concepts like the present value of a $.
Again, FAIL.
Yep, all Realtors are crooks.
All brown people are lazy.
All Hawaiians are simple.
Geez pj737 you continually show your ignorance on real estate matters.
1. 50 year old high rises are falling down.
2. Condos have cap rates.
3. You can calculate a 0% cap rate.
4. Honolulu real estate ONLY increases in value at the rate of inflation.
Yes, it is not uncommon for a leasehold interest to be bought in a lump sum. I have done it twice! In fact in one of my buildings about 100 owners have done this exact same thing in the last three years. Your real estate experience must be severely limited, if any, if you have never run across this. Maybe you are actually from West Virginia.
You might want to familiarize yourself with concepts like the present value of a $.
Again, FAIL.
You are telling me you actually prepaid the lease on a leasehold property that remained leasehold property? I have never in my life heard of anyone ever prepaying a lease on a leasehold property. Why would anyone do that? Buying the interest in the land, sure (i.e. converting leasehold to fee simple property)... but that's not prepaying a lease.
And please stop with the insults before you get yet another thread shut down; I was simply making a statement that a lot of information realtors post about properties is often incorrect and that you should be more critical of the information they post. And yes, sometimes realtors knowingly post false information or structure statements in a way to mislead buyers. It happens in all industries and professions related to sales - not just realty.
Again, just because you are inexperienced does not invalidate common practices.
You are ALSO incorrect that buying the fee that requires prepaying the leasehold is NOT prepaying the lease. The property has TWO ownerships. The leasehold AND the fee. You can buy the fee without disturbing the leasehold ownership. You can buy the leasehold without disturbing the fee ownership. You can buy both but you would in essence be PREPAYING the leasehold interest. Geez, this is pretty basic to anyone that understands basic real estate ownership.
I never insulted anyone . You are the one that called a profession a bunch of liars. I don't mind educating anyone that is truly interested in learning but that is not YOU.
Again, just because you are inexperienced does not invalidate common practices.
You are ALSO incorrect that buying the fee that requires prepaying the leasehold is NOT prepaying the lease. The property has TWO ownerships. The leasehold AND the fee. You can buy the fee without disturbing the leasehold ownership. You can buy the leasehold without disturbing the fee ownership. You can buy both but you would in essence be PREPAYING the leasehold interest. Geez, this is pretty basic to anyone that understands basic real estate ownership.
I never insulted anyone . You are the one that called a profession a bunch of liars. I don't mind educating anyone that is truly interested in learning but that is not YOU.
Good grief you make absolutely no sense.
You do realize that the Kalia is a LH property, right?... and that the for-sale unit you posted was clearly a LEASEHOLD property. You said specifically that you assumed the LEASE RENT on a LEASEHOLD unit was PREPAID, thus there being no (monthly) lease rent to pay on a LEASEHOLD property. You even quoted the realtor's incorrect statement that the maintenance fee includes the lease rent. IT DOES NOT.
Again, and I ask, how can one prepay a lease on a leasehold property if, at the end of the day, you are still left with a leasehold property? This is exactly what you stated is the case for the property you cited on Oahure.
And no, prepaying a lease is NOT the same as buying the fee interest in the land. Prepaying the lease is just that - prepaying the lease. It is not taking specific ownership (either in full or a percentage interest) of a piece of property that was once not yours. The fee acquisition cost is NEVER the total sum of the leasehold rent payments over the course of a lease agreement. There is absolutely zero correlation... so you can't "prepay" the lease by adding the sum of the total payments and lumping it all to the fee owner in one payment to acquire the fee interest in the land. The lease rent is almost always determined by obtaining a valuation of the land and then charging 6-8% of that value on an annual basis, broken into 12 (monthly) payments. And the the cost to acquire the fee interest is simply based on the value of the land (more specifically, the percentage of the land based on percentage of common interest ownership of the structure) at the time or near to the time of acquisition.
You do realize that the Kalia is a LH property, right?... and that the for-sale unit you posted was clearly a LEASEHOLD property. You said specifically that you assumed the LEASE RENT on a LEASEHOLD unit was PREPAID, thus there being no (monthly) lease rent to pay on a LEASEHOLD property. You even quoted the realtor's incorrect statement that the maintenance fee includes the lease rent. IT DOES NOT.
Again, and I ask, how can one prepay a lease on a leasehold property if, at the end of the day, you are still left with a leasehold property? This is exactly what you stated is the case for the property you cited on Oahure.
And no, prepaying a lease is NOT the same as buying the fee interest in the land. Prepaying the lease is just that - prepaying the lease. It is not taking specific ownership (either in full or a percentage interest) of a piece of property that was not once yours.
Again, just because you do not understand something does not make it wrong.
1. Geez, you really can't figger out how to prepay a lease? Really? I've done it two times along with most of the owners in both properties. You just prepay it!!!! Now the smart thing to do is to negotiate a discount for prepayment. A lot of leaseholds were written with terrible terms for the fee holder. They were happy in the 90's to take discounted dollars NOW than to get the piddly amounts dripping in monthly with piddly increases every 10 years or so. They were losing money to inflation!! Educate yourself on leasehold property! That was why I referenced educating yourself on the present value of 1$.
I NEVER said "prepaying a lease is NOT the same as buying the fee interest in the land. " Please go back and read my actual statement to see how you are saying the 100% opposite of what I stated.
I am not privy to the actual terms of the Kalia renegotiated lease. I just stated a possibility of what could have happened based on the differences of the listing information AND MY EXPERIENCE OF properties where different owners had different terms of their leaseholds and that included owners that had prepaid their leaseholds.
Geez, next you are going to tell me there are not properties where SOME owners own their fee and their neighbors only own the leasehold!!!!!
Educate yourself if you want to participate in real estate threads without looking ignorant.
I NEVER said "prepaying a lease is NOT the same as buying the fee interest in the land. " Please go back and read my actual statement to see how you are saying the 100% opposite of what I stated.
Umm, that's because I said that.
This is what you said -
Quote:
Originally Posted by honobob
You can buy the fee without disturbing the leasehold ownership. You can buy the leasehold without disturbing the fee ownership. You can buy both but you would in essence be PREPAYING the leasehold interest.
I am simply saying there is zero correlation with prepaying a lease and obtaining the fee interest. None whatsoever.
Quote:
Originally Posted by honobob
1. Geez, you really can't figger out how to prepay a lease? Really? I've done it two times along with most of the owners in both properties. You just prepay it!!!! Now the smart thing to do is to negotiate a discount for prepayment. A lot of leaseholds were written with terrible terms for the fee holder. They were happy in the 90's to take discounted dollars NOW than to get the piddly amounts dripping in monthly with piddly increases every 10 years or so. They were losing money to inflation!! Educate yourself on leasehold property! That was why I referenced educating yourself on the present value of 1$.
Yes, of course you could, in theory, negotiate the specific lease term with the landowner for a SINGLE unit but this is extremely rare and highly unlikely as the lease rents are almost exclusively set unilaterally by the landowner (i.e. same deal for everyone). You can't just call up the landowner and say, "hey buddy, listen up... I got a deal for you. How about I prepay 36 months of the lease rent if you give me the subsequent 24 months free. Deal?"
The potential legal ramifications of this almost always prohibits this from happening. In fact, I'd garner that it may actually be illegal to do so at least on the medium to larger condo projects. I purchased half a dozen or so LH properties (since 1998) and acquired the fee on all of them over the course of 4 years or so (as they became available). Never has there been an opportunity or option to negotiate customized, individual lease terms with a landowner specific to a single unit. Maybe you can do this on tiny LH properties with only a handful of units, but it would be extremely rare to the point that it shouldn't even be mentioned.
Maybe in your special, unique world these opportunities exist. This is a public forum and I can tell you with 100% certainty, anyone reading this will not ever have such an opportunity here on Oahu.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
