Condominium Property Regimes, more commonly known as a CPR, have become a common term when it comes to Hawaii real estate. The first step is to understand what a CPR actually is. Secondly, you need to ask yourself what you value in terms of owning real estate.
CPR unit we listed
Do You Plan on Expanding the House?
If you plan on expanding the house, you need to make sure you will be purchasing the A unit. The A unit is the parent or less hindered home or lot, not the cottage portion of the CPR. The A unit is only restricted to whatever laws or CC&R's state as far as size, height, and so forth. The B unit (depending on lot size and zoning) can only be 1,000 sqft of living space at the largest. You will need to consider lot size, setbacks, water fixtures, sewer systems, etc, but overall the A portion is less restricted.
Are CPR's Hard to Resell?
One way to measure the resell of a property is absorption. On average only .5 CPR's sell a month vs 4.5 on a non CPR unit in Haiku. The average days on market for a CPR'd parcel in Haiku is 113 vs a non CPR at 151 days. This could be due to the lower price point and more competition.
Additionally, CPR's are technically encumbered. This also decreases the amount of interested buyers, which decreases value. If a non CPR'd and CPR'd lot of the same size and quality are available for the same price, which one would you choose? Depending on the zoning restrictions, you have many more options with the non CPR'd lot. If you own the B unit, you can only build out to 1,000 sqft, which limits the buyer pool once more.
Another factor to consider is the permitting process. If your partner in the CPR (owner of A unit if you own B, or vice versa) does not pull a permit for an improvement and you go to get a permit, you will not be granted that permit until theirs is closed.
Benefits of a CPR
There are benefits to a CPR. Are you wanting your property to pass to multiple children? Go for it, create a CPR from your house and cottage to pass along. A large concern for home buyers is that their neighbor might block their view with future buildings. If you buy a CPR that is already built out, the density and locations are set. Knowing that there are restrictions with a CPR is most often considered in the listing price. With that said, if a buyer is less concerned about restrictions on building and more concerned about finishes and quality, a CPR could get them a better finish for less money. The first key is to see what the subject lot is zoned, then you can go through all of your options for the highest and best use. Give me a call and we can find what fits your needs.
Tim Stice 808.268.8511 firstname.lastname@example.org