When you start looking at homes on Maui, you’ll notice some are listed as “fee simple” and others as “leasehold.” Fee simple is the traditional form of ownership: you own both the property and the land it sits on, with no time limit. Leasehold is different. With leasehold, you own the right to use the property for a set number of years, but the land itself still belongs to someone else, such as a family estate, land trust, or organization.

During the lease, you pay lease rent to the landowner in addition to your mortgage, property taxes, and any HOA fees. When the lease ends, ownership of the land (and often the improvements on it) reverts back to the landowner unless the lease is renegotiated or extended. This uncertainty is one of the biggest considerations for buyers.

Here’s an easy way to picture it: Imagine leasing a car. You get to drive it, take care of it, even upgrade the stereo — but at the end of the lease, the car goes back to the dealership unless you negotiate to buy it. With real estate, it’s similar: you can live in the home and even make improvements, but once the lease is up, the landowner decides whether to extend the lease, sell the land, or take back full control. Sometimes owners and landholders reach agreements (even lawsuits, as in the Bishop Estate case on Oahu), but there are no guarantees.

So is leasehold good or bad? Neither. It really depends on your personal goals and how long you plan to own the property. Leasehold homes can be more affordable upfront, especially in prime locations like oceanfront, but they come with unique risks that buyers need to understand fully.

If you’d like to explore both fee simple and leasehold properties on Maui — and see which option best fits your situation- You can start your property search here↗