Leasehold Condo

[Ally H.]

I'm AD military and stationed in Hawaii for at least the next 6 years. While I would like to buy-and-hold a SFH or multi-unit as my first entrance into RE, the competition in this market for them has been tough (I've met so many overseas investors at open houses!). As a result, I started expanding the search.

There are a few condos in Waikiki that are leasehold properties, so they are relatively inexpensive compared to fee simple condos. I am only looking at leases that expire in 2050 or later. I would be cash flow neutral if I lived in it and rent out part of it (and build up equity) or have a small positive cash flow if I rented out the entire unit. Depending on how the market goes and if I am able to find a property that's more in line with my desired buy-and-hold strategy, I would be open to selling it in 2-6 years and using those proceeds to fund the next purchase.

What do you all think? Should I analyze leasehold units differently than I would a fee simple unit, in terms of cash flow, etc.? The alternative is to rent while the search continues, but the market here is projected to continue to recover quickly. Thank you in advance!