Purchasing a new property is surely a lifetime commitment and that is why it deserves the uttermost attention. It is among the major decisions of our life and that’s why we cannot risk it for granted. It is as important as marrying or having kids.
It is highly fledged with properties and that’s why it is one of the most intimidating tasks as well. It is highly confusing as well. One such major decision is whether to choose a freehold property or a leasehold property.
Is it even a matter of concern? Well, let us find out with the help of this post.
What is meant by a freehold property?
A freehold property is a kind of property that is settled aside by the state in the form of a plot and then disposes it in the hands of an individual. This is a general case for all the developers and builders to dispose of the constructed bungalows and private houses.
Since the land is owned by the developer itself, the ownership transfer is easy and the owner will have the title of master. Let us now have a look at the downfalls of the freehold property.
The only downfall the freehold property has is that only the town planning controllers and the environmental planning controllers have the ability to limit the development of freehold properties. The state owns the rights of taking back the freehold land if there is any public use of it.
Let us now have a look at the leasehold property as well.
What is meant by leasehold property?
These lands fall under some restrictions that are imposed on them and the dos and don’ts are also fleshed out in them. The land care is taken by the tenant only and according to the legislation, the tenant is only held responsible for all the developing responsibilities and maintenance of the property.
It, in any case, the state believes the tenant is not fit for the development and maintenance purpose then the security of the land is in a compromised state. The state even holds the power of forfeiting the leisure for the charge of nonperformance.
There are some major downfalls that one must know about this which are as follows:
It requires more time to be sold
The state has the power to provide an approval for the transfer of the leasehold property. This can lead to higher time for selling.
It has a lower value than that of freehold
It goes on without saying that it is less valuable than the freehold property.
The financing process is difficult for leasehold property
The institutes of financing do not allow the property to the interested people unless they remain for up to 50 years on the lease.
Final Words and Decision making
Keep in mind that the decision between a freehold property and a leasehold property is not just a matter of the cost and the price rather; there is many factors that come into play with it. Therefore, make sure that your decision for the same is a wise one.