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The leaseholds are supposed to be up to 2048, but some inside information told confidentially that the 1958 yr. old building is supposed to be torn down for a new high rise to be built up. Now, what is the truth? It's true that something is wrong w/so many units being on the market. At least 10 units!
You could have 1,000 years left on the lease; wouldn't make a difference. Like rats jumping from a sinking ship. There are so many units for sale because owners are desperately trying to get anything they can. The AOAO fees + coop + property taxes + utilities + insurance + interior repairs/maintenance are nearly equivalent to the NET rents (rent minus GET, TAT, mgmt fees, etc). The units are basically worthless.
Actually it looks like the maintenance fee on a 2/1 is $947 and that includes electricity, cable, property taxes, and lease rent. One of these is on the market for $2500 month. There is profit there even after GET. Kalia 425 Ena Road Unit 1106B Honolulu HI 96815-Condo listed on 02-03-2017
They estimate all costs at $1825 on a $200,000 purchase price so that's $675mo left over.
But in 30 years you have zip. A $200,000 fee simple condo could be worth $1,600,000 in 30 years.
If that gorgeous unit you noted was asking (emphasis on asking) $2,500, the arguably bleh unit noted above would likely get around $2,100/mo long term. That includes utilities but these units are only 850 SF two bdrm one bath with no parking and coin operated common laundry. And not in a desirable location in Waikiki.
As noted in the listing, $1,696/mo for AOAO dues, coop, cable and lease rent. It costs an additional $50/mo for ac (AOAO fee) not listed in the listing. Factor in a very conservative 3% vacancy rate ($65) and below market property management fee of 8% ($170), insurance ($25) and GET ($100) and you are left with a LOSS of $6/mo with $2,100 rent. And that's if you get the unit for FREE.
We haven't even factored in the cost to maintain the unit (repairs, appliance breakdowns, electrical/plumbing issues, etc etc). That's easily an extra $100-200/mo loss.
With absolutely zero chance for long-term appreciation.
With absolutely zero chance for long-term appreciation.
There is no argument that the owner should be paying someone to take the unit.
Actually the argument will be the sale price of the condo that will put you on the losing side of that argument.
The market s not made up of one person.
The loss you state is only with your made up rental rate.
There does seem to be some differences in the maintenance fees. It seems that there was an option to finance or pay in full some of that new lease expense. The unit I posted showed all costs with a mortgage at $1875.
I'm not sure what you are calling long term but there is a chance that the property could appreciate very well over the next 10-20 years.
Actually the argument will be the sale price of the condo that will put you on the losing side of that argument.
The market s not made up of one person.
The loss you state is only with your made up rental rate.
There does seem to be some differences in the maintenance fees. It seems that there was an option to finance or pay in full some of that new lease expense. The unit I posted showed all costs with a mortgage at $1875.
I'm not sure what you are calling long term but there is a chance that the property could appreciate very well over the next 10-20 years.
$2,100 is, in my humble opinion, the market rent for the unit in that listing. What do you think the market rent should be?
You failed to include the lease rent in your analysis. That's why you assumed there is cash flow at the acquisition price... when clearly there is not.
At a zero cost acquisition, the property generates only debt. I have honestly never seen an improved property (i.e. contains a legal, inhabitable structure on it) anywhere on Oahu that generates zero net income at a zero dollar cost acquisition.
And nobody on this planet would assume that the property would "appreciate very well" over the next 20 years. If they did, they have zero understanding of LH property.
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.
$2,100 is, in my humble opinion, the market rent for the unit in that listing. What do you think the market rent should be?
You failed to include the lease rent in your analysis. That's why you assumed there is cash flow at the acquisition price... when clearly there is not.
At a zero cost acquisition, the property generates only debt. I have honestly never seen an improved property (i.e. contains a legal, inhabitable structure on it) anywhere on Oahu that generates zero net income at a zero dollar cost acquisition.
And nobody on this planet would assume that the property would "appreciate very well" over the next 20 years. If they did, they have zero understanding of LH property.
No, you have to read and comprehend my posts if you want respond without looking like a fool. The lease rent was included in the listing I posted and I explained the possible difference. So clearly you are wrong. Go back and look at the listing.
One bedroom rentals are about $1750. An extra bedroom can easily add $500+. I would say market rent for that unit is $2250 to $2500.
A leasehold property with 30 years left on the lease can well double or triple in value just as they have done over the last 60+ years. Look at the San Soucci property sales. The lease expires in 2024 yet values are still strong. It would help if you were educated in market forces instead of just focusing in on a property rights definition.
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.
The $2,000 rental is a one bedroom. They are calling it a 1.5 based on a daybed on the lanai. The $2500 rental is a 2 bedroom. It is obviously not an investor friendly building but if you needed two bedrooms in Waikiki under $200,000 for the next 30 years it is a pretty good deal.
The next 2 bedroom is in the Royal Aloha and only 674sf. at $159,000.
No, you have to read and comprehend my posts if you want respond without looking like a fool. The lease rent was included in the listing I posted and I explained the possible difference.
Quote:
Originally Posted by honobob
Actually it looks like the maintenance fee on a 2/1 is $947 and that includes electricity, cable, property taxes, and lease rent. One of these is on the market for $2500 month. There is profit there even after GET. Kalia 425 Ena Road Unit 1106B Honolulu HI 96815-Condo listed on 02-03-2017
They estimate all costs at $1825 on a $200,000 purchase price so that's $675mo left over.
Verbatim from the ad you posted:
Monthly fee includes Maint. $913+33.55 cable + property tax, plus lease rent $749.83 = 1,696.38/mo.
You may actually want to try to read and comprehend your own posts before posting them.
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!
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