Lease vs. Fee. What is the difference?

Lease vs. Fee. What is the difference? In Hawaii we have a much larger percentage of residential lands held in lease than most other areas. When you buy a leasehold home, you're buying the right to use the home (or improvements) for a fixed time period, but not the land on which the house sits. An annual lease fee, usually fixed for a long term, is paid to a landowner. Leasehold homes are significantly cheaper to purchase than homes (or improvements) made on fee-simple land, but beware, leases have much uncertainty attached to them. Many leasehold properties are 20 to 30 years old now and up for renegotiation from their original terms and the cost today can be high based on current market values. Fee-simple homes also include the land on which it sits, cost more, but does provide greater security and resale value. Back to Top