What is the difference between freehold property and leasehold assets? Who is better in both?

When you are thinking of buying a property with your hard earned money, the first question arises whether to take freehold property or leasehold. You often hear the names of these two terms. But what is the difference between these two types of property, do you know? Many times people decide incomplete information and later many times they face legal and financial problems. In such a situation, if you get important information related to freehold and legend property, then it will be easy for you to take a decision. The next time you go to buy the property, make a smart and thoughtful decision.

Who is called freehold property?

According to magicbricks, freehold property is the property that is free from any kind of hold. That is, any person or association who owns the building is also the owner of the land on which it is built. That owner has complete ownership of property. When you buy a freehold property, you can create an additional room or floor with it.

What is leasehold property?

Leasehold property is a property that is not yours, but on lease. The lease period can range from one year to 99 years. Understand this that you can use the building during the lease period, but you cannot claim rights on the ground. If you want to make any changes in the building, you may have to contact the real owner. Your responsibilities regarding leasehold property are limited.

What is the difference between the two?

• If you look at the difference in the case of ownership, there is complete ownership of freehold property. Freehold property has 100% rights, while leasehold property has the right to use the property only for the lease period, it cannot claim ownership.
• Looking at the duration of the ownership, the owner of the Freehold Property will remain the owner forever or until it is sold, while the leasehold property can use the property only until the lease period.
• Comparison about bank finance, in the case of freehold property, banks finance those who want to buy freehold properties, while banks in leasehold property usually finance on lease only when the lease period is more than 30 years.
• There is also a difference in case of maintenance and loss cost. The owner is responsible for the maintenance of the freehold property and any kind of damage, while in the case of leasehold, its real owner is responsible for maintenance and any kind of damage.
• There is also a difference in the use of property. There is nothing to invite someone in freehold property, keeping pets or renting it, while in the case of leasehold property, his real owner can impose some special restrictions and it is also necessary to follow it.

What is better

According to Magicbricks, which of the freehold and leasehold property is much better, it is difficult to say completely. Everyone has their own advantages and disadvantages. Freehold properties provide full ownership rights with relatively low limit. In such a situation, it is more suitable for long -term investment and personal use. Leasehold properties are relatively inexpensive, but have additional restrictions and responsibilities. You are buying a house or investing in commercial property, it should be decided in view of your betterment and benefits.

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