Buying a piece of property can be a hassle at times especially when you are not aware of all the nuances you must know before striking a deal. Though there are many things to keep in mind while buying any property, one of the key things to check is the property ownership type. It could be freehold or leasehold.

Freehold ownership gives you full freedom to use your property the way you like it. There will be no restrictions with regard to buying and selling, and you don’t need any permission from the government authority to sell your property.

Freehold property offers complete ownership rights over both the land and the structures on it. The property owner has the freedom to use, sell, transfer, or lease the property as per their discretion. There are many financial benefits of buying a piece of freehold property. Here we take a look at some of them:

Investment Potential

Freehold property is generally considered a better long-term investment due to the perpetual ownership rights it provides. The absence of lease restrictions allows owners to capitalise on property appreciation and leverage its value for financial gains.

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Ease of Financing

Financing freehold property is comparatively easier as the ownership rights are absolute. Banks and financial institutions are more inclined to provide loans for freehold property, often offering lower interest rates and flexible repayment terms.

Adhil Shetty, CEO, Bankbazaar.com, says, “In some cases, home loan interest rates may be lower for freehold property compared to leasehold property. Also, the loan amount on freehold property could be higher. The reason is simple, lenders consider freehold property as less risky investments due to the complete ownership rights and the absence of lease restrictions. As a result, borrowers can benefit from lower interest rates, reducing the overall cost of the home loan and making it more affordable in the long run. However, it is important to compare and check whether you are really getting some benefits when you buy a piece of freehold property as it may cost you high.”

Resale Value

Freehold property typically has a higher resale value compared to leasehold property. Buyers are more willing to invest in freehold property as they offer long-term security and greater freedom to modify or develop the property as per their requirements. This can potentially lead to higher financial returns when selling the property.

When considering property investments, understanding the financial implications is vital. Freehold property provides absolute ownership rights, greater investment potential, and easier access to financing. These properties offer the flexibility to maximize returns and enjoy long-term financial stability.

It is important to go through the property document to ensure the ownership type. Sometimes the property you buy may be leasehold. You can check the property location and verify the land type from the government department of that particular city. If you are not sure how to check the property land title, you can take the help of a real estate expert.

Seeking professional advice from real estate experts and financial advisors can provide valuable insights to help you make an informed decision.