STR in Maui on a leasehold ?

[Bonny Drago]

Hi I am thinking of getting into the STR business . Have been reading Avery Carl's book recommended here . Saw a 2bd 2 bathroom condo in Maui , priced at 779K ocean front good views , however it is a leasehold which expires in 30 years it is an active STR currently Apparently the current owner only made 45K last year ! Wondering if leaseholds are good option? I don't think the cash flow would be high? Honestly looking for recommendations? Like what numbers should I be looking at that would make this a good deal ?

Thank you

[Kasey Sulheim]

Quote from @Bonny Drago:

Hi I am thinking of getting into the STR business . Have been reading Avery Carl's book recommended here . Saw a 2bd 2 bathroom condo in Maui , priced at 779K ocean front good views , however it is a leasehold which expires in 30 years it is an active STR currently Apparently the current owner only made 45K last year ! Wondering if leaseholds are good option? I don't think the cash flow would be high? Honestly looking for recommendations? Like what numbers should I be looking at that would make this a good deal ?

Thank you

 purchasing leasehold land here in Hawaii means you do not actually own the land that the structure is built on. Therefore as the lease gets closer to expiring the property value goes down. So not only are you not cash flowing but you are not gaining appreciation. They also become more difficult to sell as the lease gets closer to expiration. The government does not own any of the leases in Hawaii.