Isle Luxury | Greg Burns Join Our VIP List Sign-up for real estate updates.
Get news about properties in the area as well as market
changes and exclusive real estate information!

Main Content

What you need to know about buying land on Maui

land on Maui

Famous for its amazing white sand beaches and gorgeous waters, many would jump at the opportunity to own land in the scenic paradise of Maui. Here’s what you need to know about buying land here:

Types of property ownership

In Hawaii, there are two types of property ownership:

  • Fee simple

    Also known as fee simple absolute, this kind of property ownership is what most of us are familiar with. This means you own the structure and the land it is built on. The owner of a fee simple property pays maintenance fees and real property taxes, but does not pay ground rents. The fee simple owner possesses the land and has the right to use and dispose of the land, lease it to others, or pass it to someone else when they die.

  • Leasehold

    As the word implies, being a leasehold owner means that while you have the right to use the land throughout the term of your lease, you do not permanently own it. Once the term is over, the land rights revert back to the lesser – though there are instances wherein the lesser will sell the property and land to the lessee.

Folks from the mainland sometimes ask us if it’s “safe” to buy property on Maui since Hawaii is a leasehold state. Yes, it definitely is! The vast majority of properties for sale here are fee simple, so this isn’t really an issue most of the time.

If you do decide that you want to invest in a leasehold property, some of the things you will want to consider are:

  • Expiration date (especially if you’re buying from a previous leaseholder)
  • Lease term (these are typically at least 40-50 years)
  • Renegotiation dates
  • Lease rent
  • Fixed period
  • Leased fee interest

If you’d like to learn more about the history of leasehold ownership in Hawaii, there’s a pretty informative article on Maui Now that you can check out.

Financing options

Before considering purchasing any type of property, be aware of all the financing options that are available to you. If you just want to buy land and you don’t want to build on it yet, Hawaiian banks like the First Hawaiian Bank offer land loans that give buyers the opportunity to “buy the land now, build later.” One of the loan’s benefits is “reduced loan fees when refinancing into a construction loan.”

These types of loans often have up to three-year terms and can be structured as interest only (with a balloon payment). The land loan can be replaced by a regular mortgage once the home is completed or they can be refinanced as a construction loan before the term of the land loan ends.

Get real estate representation

Buying land on Maui can be a challenge, especially if you’re interested in a lot or parcel in a highly desirable area. It’s important to have an experienced real estate agent to help you navigate your way through the market.

Looking for Maui land for sale? Go ahead and give us a call at 808-214-0302 or email us at greg(at)isleluxury(dotted)com. We look forward to helping you find the right piece of land here on The Valley Isle.