There are two kinds of property, freehold and leasehold. In both kinds of properties; there are differences in terms of the purchase, ownership, and selling of those. It is an important issue for a person to know about freehold and leasehold property since it has great importance in owning the property. In this blog, we will learn the main differences between freehold and leasehold properties along with their benefits and buying processes. This will support you in making the right decision when it comes to buying a property. What is Freehold Property?
A freehold property is one where the buyer has complete ownership of the property or land as it stands with no additional ground rent.
In the case of freehold property, you will be having complete ownership rights and complete control. Complete ownership means that you can make changes to this property without any restriction. You can also sell or transfer the property as per your choice. The ownership remains the same until you don’t want to change it. Freehold property does not have any ground rent and therefore you will only be liable for any additional costs, expenses, or charges like renovation costs, maintenance and repair costs, etc.
You will be having complete ownership of the property. You can make any alterations and improvements without seeking permission or going through any documentation formalities. As the name suggests, a freehold property is a property that is free from all holdings. That’s why you have complete ownership of the property without any restrictions. Benefits of Freehold Property
Freehold property is very beneficial having many benefits and advantages. Some benefits of freehold property are:
Right of Ownership: Ownership of a freehold property remains fixed and everlasting, therefore cannot be transferred to someone else unless the owner of the property him self transfers. In freehold property, no lease-related and rent-related issues come into play.
Property Control: You have absolute control over the property with freehold ownership. You can do whatever you want with the property, be it renovation or changes.
No Lease Costs: No lease costs are involved in a freehold property. The expenses such as ground rent and other charges are not included in the freehold property, which makes it a cost-effective proposition.
Long-term Investment: The value of this type of property generally increases with time. Investing in these types of property can make a solid asset for the future.
What is a Leasehold property?
A leasehold property specifies that you own a specific building for a fixed period.
The land on which that property stands belongs to the freeholder (landlord). An agreement known as a lease agreement describes the duration of ownership, which can be hundreds of years. Once the lease period expires, ownership of the property reverts to the landlord, and you no longer have any rights to the property. However, you can discuss extending the lease period with the freeholder (landlord) if desired. This is one type of property ownership in which you have rights to use that property for a fixed period on the basis of a lease agreement.
This kind of agreement guides you about your rights and responsibilities about how to use the property, and you will have to pay regular ground rent to the landlord and there can be extra charges for maintenance based on the agreement terms and conditions. While buying a leasehold property, certain documents are important for the hassle-free and legal transfer of ownership. Benefits of Leasehold Property
1. Low initial-cost
Leasehold properties are generally referred to as cheaper than freehold properties. It is less expensive and within budget to buy a leasehold property.
2. Benefits of Prime Location
These properties are situated in areas that are of high demand, and access to key urban services may be beyond the reach of freehold properties.
3. Excellent Potential Future Value
These kinds of properties will always be found in high demand areas and promise a good ROI. If the lease period is long and the property is well-maintained, it can yield a good return on investment.
4. Ownership Flexibility
