When you’re looking into buying a house, it’s a good idea to have an understanding of the difference between a ‘leasehold’ and ‘freehold’. You might not be aware but a ‘leasehold’ property is actually more easily handled than a ‘freehold’ property. A leasehold is one in which you are allowed to use the house for as long as you want. This could mean staying there as a tenant, or it could mean leasing the property to somebody else. In most cases a leasehold is considerably cheaper to handle than a freehold. It can also prove to be less complicated.
However, how exactly does a leasehold property differ from a freehold one? The main difference between these two types of property is that with a leasehold you don’t own the property you’re living in. It is merely a tenancy. With a freehold property you do own the property and you will have full rights to it. When you purchase a freehold home you will receive the deed, meaning you have full rights to the property. This is one of the reasons why freehold sales tend to be much more expensive than leasehold sales. The next freehold development is Belgravia Ace which is located at Ang Mo Kio Avenue 5.
Another significant difference between a leasehold and freehold sale is that the sale type allows you to stay in the property for longer periods of time. If you have purchased a leasehold home, you may only have three months to stay in it before it is sold off. However, if you have bought a freehold property you can often guarantee to stay for as many as twelve months.
As mentioned earlier, one of the main differences between a leasehold and freehold sale is that the former involves you actually owning the property. This can make negotiations much easier. Because you are technically the owner of the property you have more bargaining power and you can usually get better terms. For instance, you might get a slightly cheaper mortgage term. You also have more flexibility to change the terms of the contract as you like.
There are benefits to both types of property sale. In the case of a leasehold purchase you will have security in that the home will be secure until you are ready to move out. In the case of a freehold home, you will have the chance to live in your new home before it is sold. In addition to the obvious benefits of ownership, you will have tax and insurance implications when you purchase the freehold. Leasing actually loses money because you will not be paying any capital gains tax on the sale.
The main decision to make when looking at property sales is whether you should buy outright or lease the property. Both options have their pros and cons. When you purchase outright you can buy the home free and clear. However, you may have to put some cash up-front, which limits the amount of property you can buy. In a leasehold purchase you will be financing the property and therefore you will not need to put any cash up-front.
A leasehold purchase usually takes less time to sell than a freehold sale. When you finance a freehold sale, you have to wait for the valuation to be completed and agree on the purchase price before you can officially put the property up for sale. This delays the sale and can lead to higher costs.
Whatever option you choose for your property sale, it is always advisable to do some research before going ahead. Find a reputable professional who is willing to offer unbiased advice. You can find information online or from property professionals who have experience in the purchase and selling of property. A proper plan will allow you to make the best possible decision regarding your purchase and get the most money for your home.