First published: 29 April 2021 @ 5:42 pm
It is possible to buy a freehold property or leasehold property, which is the best option? Let’s see how they differ.
Leasehold Properties: What Are They?
A leasehold property is a house or apartment that you own on a long-term basis. The ownership of the property comes with the right to use it for a specific period of time, which is called the lease period.
This time is agreed upon by both parties at the time of purchase and is stated in the deed. If you buy a house with 60 years left on its lease, then you own it for only 60 years and then have to leave it behind when your term ends.
You can also buy flats, which are considered leasehold properties. Leasehold properties can be inherited from one generation to another as long as they pay off any outstanding debts on them before their term ends.
If you do not have any heirs or relatives who wish to inherit your home after your death, then it goes back into the hands of the landowner, who can sell it off and let someone else live there instead.
Leasehold properties can be purchased from different land owners. It is also possible to purchase leasehold property from a freeholder who has inherited it.
Freehold Properties: What Are They?
Freehold property is one that you own outright. You do not have to pay rent or any other sort of fees for its use, because you are the sole owner of it.
You will have to pay for its upkeep and taxes on it, but no one else will come to claim ownership of it or demand any kind of payment from you. Freehold properties can be inherited by your family members and you do not have to worry about them being taken away at any point in time.
You can sell your freehold property if you wish to do so at any point in time and transfer ownership of it over to someone else. You can buy a freehold property from a private seller or the government, depending on the circumstances surrounding the property that you wish to buy.
Why You Should Buy A Freehold Property
Freehold properties are generally considered to be a better option than leasehold properties. The biggest reason for this is that you do not have to worry about having to leave your home when your lease period ends.
You can pass it on to your family members if you wish and they can pass it on again after your death. This makes it a good investment because you will not have to worry about losing money on it at any point in time.
You also do not have to worry about repairs or maintenance costs, because you are the only one who has to pay for them. This is not the case with leasehold properties, where you have to pay the landowner some amount of money every year in order to pay for the upkeep of the property and all of its parts.
Freehold properties are more cost-effective in this regard because you will not have to pay any kind of taxes or fees in order to use them.