Oahu Real Estate TipsWhat You Must Know When Buying an Oahu House or CondoPart 1 There are many, many things you should know when looking at a house or condo on Oahu. A good portion of them is applicable for real estate almost anywhere. Some are unique to the Islands. We’ll try to cover both in this series. #1 Get Your Oahu House Or Condo Inspected for Termites Termites are the great villains of housing in Hawaii. The list of properties that have been lost to infestation and the resulting damage would fill pages and pages. Some of the greatest architecture in the Islands – including public buildings, famous hotels, the great houses of the plantation Barons and even a few condominiums – have been torn down before their time because of termites. Or at least before their time if they’d been built outside of Oahu. The lack of a winter season to kill off, or at least slow down, the toll termites take on Oahu real estate makes them especially dangerous here. Don’t take the word of a seller or hire his ‘really honest’ friend to do the inspection. Find a good, reputable inspector. Ask around, research, do whatever you have to do. We know of one case where the inspector gave the All Clear rating to a Waikiki condo that was bought partly on that verdict. When termites started turning up afterwards in large numbers, the inspector blamed it on not having his glasses the day he did the inspection(!). True story. Oahu homeowners justifiably fear these little guys – they can actually go through concrete. Remember; get the inspection done by somebody who will do the job right. You can’t afford to gamble on your house or condo. #2 Understand exactly what the difference is between ‘Fee Simple’ & ‘Leasehold’ The debate in Hawaii over these two real estate designations would also fill a book of its own. It is better understand today, especially as more and more leasehold homes reach the end of their terms. ‘Leasehold’ means that you do not own the land your house or condo is on; you are just leasing it. Hence the name. This arrangement is fairly unique to Hawaii. Leases are normally 50 to 99 years, though they can and do vary a lot. Oahu is now seeing a lot of 50 year leases coming up, products of the building boom in Hawaii during the 50’s and 60’s. Owners/Leasers are now facing the reality that they must vacate the land – and leave the house they bought, or even built. If they can’t move the house – whether because of lack of money or a new lot to drop the house on – that house now belongs to the owner of the land. Many leasehold house/condo owners didn’t understand the implications from this when they first bought back then. Some still don’t today – or they don’t think it through. In a place where land and housing is limited, this can happen very easily. If you own a leasehold condo, if your building can’t negotiate a reasonable lease fee for the property, or if the landowner wants you out, you leave empty handed. You can transport a house, but you can’t move a condo. Fee Simple means that you own the land under your home or condo outright. It’s what your normally think of as a home/condo purchase outside of Oahu, or anywhere in Hawaii. Does this mean that Leasehold is necessarily a bad purchase? Not at all. But you must know what you’re getting into; that means you need to be straight on what exactly is going to happen at the end of the lease. Don’t take the word of the leaseholder that they’ll probably renew the lease at a reasonable rate when it comes up. A lot can happen in 50 years, even if they’re being sincere at the time of the sale. Take a look at the lease term and be sure that you can deal with the possible consequences of a leasehold real estate property before proceeding. Go to Oahu Real Estate Tips, Part II Contact me to start looking for your new Oahu home. I'll be happy to hear from you!
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