Freehold versus Leasehold: Which is the best option for me?

Recently, more statistics and factors that led to the resurfacing of the leasehold scandal have been released. Ever since, more people have been more careful delving into the real estate market. Nonetheless, it does not mean that the market should be avoided altogether.

Here is a guide to the main differences between true homeownership (freehold) and leasehold:

Ownership and Control

Freehold gives you ownership of the land along with the structures on it. The title is under your name and you have full discretion of how to utilize the entire area and any commercial or residential space.

Leasehold grants you the temporary ownership of the building or house but not of the land it stands on. You are not allowed to make major alterations to the property without the permission of the owner.

Maintenance and Upkeep

Freehold gives you accountability in the general maintenance of the area not only of the structure. You do not have to pay rent or maintenance fees but you are solely responsible in seeing to it that the property is in optimum condition.

Leasehold does not give you sole accountability but you will be required to pay part of the maintenance and upkeep expenses if deemed by the owner. You also have to pay adjusted fees when taxes on land increase and the value of the property increases. This is what mostly some fail to regard in the issue of the leasehold scandal.

Paperwork and Legalities

Freehold requires proper transfer of documents from one owner to another. This requires more surveying and can entail a greater risk. Tax payments and registration will also have to be settled and put in your name before you can enjoy the property.

Leasehold does not require formal transfer but more like a contract with the lease terms that can be renewed within certain time frames.

With what is at stake in terms of financial considerations and long term benefits, you have to assess the resources you have and these differences. Only then can you properly decide on what is best for you.