Leasehold Vs. Fee Simple

Submitted by: Justin McClain

Each day I have buyers asking about the difference of Fee Simple Property and Leasehold Property, asking to explain Leasehold Property or wondering why Leasehold Properties will sell far below the price of a Fee Simple Property. Since these are everyday questions and inquiries I thought it would be a good article to discuss.

According to Realtor.org here is how they define each:

Fee Simple – an unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

Leasehold – a way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

When a Leasehold property is purchased, it will usually have a monthly lease payment due to the fee owner and an expiration date of the lease. Upon expiration of the lease, the fee owner will have the option if they want continue to lease the property or take possession of the property. Leasehold property is a good option to use or occupy property for an extended period of time; however it needs to be properly researched to be done right.

If you still have questions regarding Leasehold and Fee Simple property feel free to contact me. I am always looking to learn or teach knowledge, because you know what they say, “knowledge is power!”

About me:

“Justin is born and raised in Kailua, Oahu and is knowledgeable of Hawaii’s beautiful beach front living as well as living in the mountains and hills with the incredible views and delightful trade wind breezes. He has had the luxury of living in a variety of homes along beautiful Kailua Beach as well as in different areas of the island including various condos and apartments giving him the opportunity to experience Hawaii real estate first hand.

Justin is extremely dedicated to assisting clients and is very detailed orientated. He enjoys helping clients sort through the various properties on the market and find the right property catering to their interest. Justin is an active member of the National Association of Realtors (NAR), Honolulu Board of Realtors (HBR) and Hawaii Association of Realtors (HAR).

Prior to his career in real estate Justin specialized in a variety positions, focusing in the sales industry, constantly achieving top producer recognition. Justin is a graduate of Iolani School and a graduate of University of Hawaii: Shidler College of Business with a Bachelor of Science degree majoring in Business Management with extensive work in Marketing. In addition to being a Realtor , Justin is an avid sportsman enjoying surfing, wakeboarding, golfing, sailing, hiking, drag racing, snowboarding and just staying active.”

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Source:

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