Trying to decide between leasehold and fee simple for a Marina del Rey condo? You are not alone. Waterfront living comes with unique ownership structures, and the details can change your monthly costs, your loan options, and your resale potential. In this guide, you will learn what each ownership type means in 90292, how it affects your budget and financing, and the key questions to ask before you make an offer. Let’s dive in.
Fee simple vs. leasehold: the basics
What “fee simple” means
In a fee simple purchase, you own the real property interest outright. For condos, that typically means you own your individual unit plus an undivided interest in the common areas. There is no separate ground lease. Your ongoing costs are mainly mortgage, property taxes, HOA dues, insurance, utilities and maintenance.
What a “leasehold” means in 90292
With a leasehold, you buy the right to occupy and use the unit for the remaining term of a ground lease. A separate party, called the lessor, owns the land. In Marina del Rey, many buildings near the harbor were built on leased land managed by public or private lessors. The lease’s remaining term, rent schedule and rules directly affect your financing, monthly costs and resale value.
Why Marina del Rey has leaseholds
Marina del Rey includes county-managed tidelands and harbor facilities. Some residential projects sit on land overseen by the Los Angeles County Department of Beaches and Harbors, while others involve private lessors. When these communities were developed, many used long-term ground leases that originally ran for decades. Today, each project’s lease structure is different. Renewal options, market rent resets and consent rules can vary, so you need to review the lease for the exact terms.
Cost comparison in Marina del Rey
Your monthly payment stack
When you compare a leasehold and a fee simple condo, line up every recurring cost side by side:
- Mortgage principal and interest
- Property taxes (LA County’s effective rate is often around 1% of assessed value, plus any voter-approved assessments; confirm the parcel’s exact rate)
- HOA dues (often higher in marina buildings that maintain docks, amenities and enhanced security)
- Ground rent for leaseholds, including any scheduled escalations or market resets
- Insurance (association master policy plus your HO-6 policy; leases may assign extra insurance duties to the owner)
- Utilities, maintenance, reserves and any special assessments
Predictability and escalations
A fee simple purchase generally has more predictable costs, driven by your fixed mortgage, tax basis and HOA budget. Leasehold costs can change if the ground lease includes CPI-based increases or market rent resets. A large step-up in ground rent can raise your carrying costs even if your mortgage stays the same. Review the rent schedule, escalation formula and timing of future resets before you commit.
Long-term cost and resale
On paper, the purchase price for a leasehold can be lower than a similar fee simple unit. In practice, the added ground rent and potential loan pricing differences often make the monthly cost higher. There is also resale risk. Some buyers avoid leaseholds, and certain leases draw tighter lender scrutiny, which can reduce the buyer pool and lengthen time on market. That marketability factor is part of your total cost of ownership.
Financing realities in 90292
How lenders view leaseholds
Lenders analyze leaseholds differently because the property interest is tied to a lease that expires or could change. They look closely at the remaining lease term, rent escalations, renewal options, consent requirements, and whether the lease is subordinate to a mortgage. Many lenders set minimum remaining terms at closing and at loan maturity, and some require extra project reviews for condo leases.
Questions to ask your lender
Before you write an offer on a leasehold, request a lender review of the lease itself. Ask:
- What remaining lease term do you require at closing and at maturity for this loan program?
- Do the rent escalations, renewal options and consent clauses meet your guidelines?
- Will this need manual underwriting or special approvals that could affect timing or rate?
- What down payment and rate differences should I expect versus fee simple?
- What condo project documents do you need to approve the loan?
If you plan to use FHA or VA
Federal programs often have specific leasehold requirements, including minimum remaining lease term and certain lease provisions. Not every leasehold qualifies. If you want FHA or VA, verify eligibility with your lender early in pre-approval. Do not assume a standard pre-approval is valid without a lease review.
Resale and marketability
Appraisals and comps
Appraisers adjust value for leaseholds by analyzing the lease term, rent schedule, escalation language and assignability. Shorter remaining terms or aggressive escalators usually translate to lower appraised values compared with similar fee simple units. To get a fair read on value, comps should come from other leasehold sales with similar lease features whenever possible.
End-of-lease outcomes
Understand the endgame. Some leases include defined renewal options. Others allow the lessor to retake improvements or renegotiate at market. Public lessors can also pursue redevelopment in line with policy goals. Uncertainty around the end of term can weigh on value, so clarity on renewal mechanics, notice deadlines and pricing formulas matters.
Due diligence checklist for Marina del Rey buyers
Documents to collect before you commit
- Full ground lease and all amendments, with signatures and dates
- Estoppel certificate from the lessor or a statement of lessor policies on consent and assignment
- Ground rent schedule, including all escalation formulas and any market reset dates
- Renewal or extension options, including notice procedures and pricing methods
- Lessor consent requirements for sales, mortgages, subleases or improvements, plus any fees and timelines
- HOA declaration, bylaws, budget, reserve study, recent minutes and details on pending or recent special assessments
- Condo project rules affecting leasing, short-term rentals and dock or slip usage
- Insurance allocation in the lease and HOA policy, including responsibility for docks and structures
- Preliminary title report and recorded documents showing the lease interest and any restrictions
Professionals to engage
- A California real estate attorney with leasehold experience to explain key provisions and long-term implications
- A lender willing to pre-review the ground lease and condo documents before appraisal
- An appraiser experienced with Marina del Rey leasehold properties
- The HOA manager for answers on reserves, assessments and any history of disputes involving the lessor
- Local officials or published notices for updates on marina planning and redevelopment policies
Red flags and green lights to watch
- Red flags: short remaining lease term, unclear or costly renewal language, steep market resets, rigid consent requirements that delay sales or financing, or leases that shift major insurance and casualty costs to owners.
- Green lights: long remaining term beyond your loan maturity, transparent escalation formulas, clear and transferable renewal options, and lessor policies that outline timely consent procedures.
Leasehold vs. fee simple: which is right for you?
Both structures can work in Marina del Rey. Fee simple is straightforward and typically offers easier financing and wider resale appeal. Leasehold can deliver access to desirable waterfront locations, but you need to price in ground rent, lender constraints and long-term lease provisions. Your goal is to match the property and the lease terms to your budget, your financing plan and your expected ownership timeline.
If you prefer predictable costs, broad financing options and a wider buyer pool at resale, fee simple may suit you best. If a leasehold offers location and amenities you value, make sure the lease term, rent schedule and renewal rights align with your plans. In every case, read the lease in full, confirm lending terms early and weigh future escalations alongside the purchase price.
Ready to compare specific buildings or review a lease package with a local perspective? Connect with The Kohl Team for tailored guidance on 90292 condos and a smooth, concierge-level process from pre-approval to closing.
FAQs
Financing a leasehold condo in Marina del Rey: Can I use FHA or VA?
- Possibly, if the lease meets program rules on remaining term and other provisions. Verify with your lender during pre-approval.
Monthly costs on leasehold vs. fee simple in 90292: What changes most?
- Leaseholds add ground rent and may shift insurance or other costs to the owner, while fee simple owners do not pay ground rent.
Appraisals for Marina del Rey leaseholds: How are values set?
- Appraisers adjust for lease term, rent escalations and assignability, and they prefer comps from similar leasehold sales.
End-of-term outcomes for a Marina del Rey ground lease: What can happen?
- Outcomes vary, including renewal, renegotiation or reversion of improvements. Review renewal options and notice deadlines.
Lender requirements for leaseholds in Los Angeles County: What documents will they ask for?
- Expect requests for the full ground lease and amendments, HOA documents, estoppel letters and evidence of lessor consents.