Owning a coffee farm is a truly rewarding experience. Not only do you have the satisfaction of producing one of the finest coffees on the planet, but you also get to enjoy the taste of pure Kona coffee every day. However, the journey towards owning a coffee farm in Hawaii can be filled with challenges and uncertainties. In this guide, we will provide you with valuable insights to help you navigate the process with confidence.
Understanding Land Tenure in Hawaii
In Hawaii, there are two common types of land ownership: Fee Simple and Leasehold. Fee Simple is the most common type of ownership in America, where you receive a deed proving your ownership. In Hawaii, however, a significant portion of the land is owned by large estates, remnants of the old Hawaiian monarchy. The largest of these landowners is the Bernice Pauahi Bishop Estate, which owns approximately 23% of all the land in Hawaii.
When purchasing any property, it’s essential to follow some basic guidelines. These include obtaining a survey, title insurance, and seeking advice from an accountant and an attorney. Buying fee simple land is relatively straightforward, but when it comes to purchasing a residential leasehold property, you need to be aware of certain legal requirements. The seller must provide you with a copy of the lease and all its amendments within 10 days of opening escrow. Reviewing these documents is crucial, and it’s advisable to seek legal counsel to ensure you understand the terms and conditions.
Key Considerations for Leasehold Properties
When purchasing a residential leasehold property, it’s important to pay attention to several key factors. These include the term of the lease, fixed lease rental periods, rent amounts, surrender clause, and assignment conditions. Understanding these aspects is essential for making an informed decision. For example, if you plan to finance the property, lenders typically require a certain fixed period in the lease. Additionally, if you intend to pursue a tax deferred exchange, ensure the lease term has at least 30 years remaining to qualify.
Before making an offer on a leasehold property, it’s crucial to review the lease carefully. Some leases may have restrictions on building dwellings or require specific conditions for assignment. It’s also essential to check with the Building Department to verify if any existing dwellings on the property are legally permitted. Understanding these details will help you make an informed decision and avoid any unpleasant surprises in the future.
The Significance of Location for Coffee Farming
When it comes to coffee farming, location plays a crucial role. Coffee thrives best at elevations between 750 to 2500 feet. According to experts, the higher the elevation, the better the quality of the coffee bean due to favorable climatic conditions. It’s also recommended to find an orchard planted in soil on a gentle and even slope. These conditions make orchard maintenance much easier. If you’re planning to establish a new orchard, it’s wise to create a farm that is easily maintained. Factors to consider include planting distances, drainage, soil type, slope, and maintenance style. The Soil and Water Conservation Service and the University of Hawaii Agricultural Extension Office offer free services to assist farmers in making the right choices.
Additionally, it’s important to determine the availability of utilities on the property. Do not assume anything! Contact Hawaii Electric to find out if power is available and the associated costs. The same applies to phone service and high-speed internet. Also, consider the water supply. Water may be provided by the County in limited areas, or you may need to rely on catchment systems. It’s crucial to assess the adequacy of rainfall for agricultural applications such as irrigation. Moreover, verify that all building materials used in your home are lead-free, as the sulfur dioxide fumes emitted from the volcano in Kona can leach heavy metals into the water supply.
Harvesting and Marketing Your Coffee
Once you have successfully grown and harvested your coffee, you have several options for selling your crop. Many farmers choose to sell their coffee to processors, while others prefer to process and sell their own coffee. Marketing estate coffees has become a rapidly growing cottage industry in Kona. However, before investing in your own brand of Estate Coffee, it is essential to do your homework. Determine if you need a certified kitchen for packing the coffee and secure a market for your product. Selling coffee requires time and effort, so consider if you have the resources to handle the entire process, from picking to packing and selling.
About the Author
Arnold Rabin is the Principle Broker of A Real Estate Concern of -Hawaii Inc. With 37 years of experience, he specializes in selling coffee farms in Kona. Arnold is not only passionate about real estate, but he is also an organic farmer, producing some of the best coffee in the known universe. In his free time, he enjoys practicing magic tricks, being an active community member, and being a father to three coffee pickers.
For more information, visit Marmalade Cafe to explore our resources and contact us for any inquiries.
So, are you ready to embark on the exciting journey of owning a coffee farm in Hawaii? It’s time to turn your dream into a reality and experience the joy of producing exceptional Kona coffee.