Kona Coffee Farm Realty Blog

So you’re thinking about joining the ranks of Kona Coffee farmers. A key consideration is the form of ownership or land tenure. The two most common forms land tenure in Kona are leasehold and fee simple. Fee simple means you own the property outright. Leasehold means you’ve purchased a lease giving you the right to use that property for the term of the lease. One of the largest land owners in Kona is Kamehameha Schools, also known as Bishop Estate. An estimated 1200 acres of the approximately 3600 acres of Kona Coffee land is owned by Kamehameha Schools. My simple math puts that at about one third of the total acreage.

Fair purchase price for a fee simple farm is dictated by most recent sales. In today’s market, productive coffee land is selling for about $150,000 per acre with no house. Obviously, some locations will drive a higher price/acre, some lower, but this should serve as a decent benchmark.

Leasehold is a different story. Because you’re only leasing the use of the land for the term of the lease, the price is dependent on the amount of time remaining on the lease. Often times the time remaining on the lease is not long enough to be financed by a lending institution. The amount of annual rent charged by the lease will also influence the value of the lease. Triggering a default clause within the lease contract can dramatically increase your lease rent payments. Needless to say, assuming a lease for leasehold property requires an extremely careful analysis to avoid paying too much.

We have many wonderful coffee properties on the market today in Kona, each with its own charm and character, both fee simple and leasehold. However, please take the time to carefully consider your desires and match them to the right farm at the right price. I’ll be happy to help.

A hui hou,

Name (required)

Mail (will not be published) (required)

Website