As the COVID-19 pandemic shows no real signs of diminishing anytime soon, housing markets around the world are bracing for what is sure to be a turbulent time. People are holding onto their money a little tighter these days with so much uncertainty in the air, which in turn is leading to fewer houses being bought and sold. However, there is one form of real estate that is in high demand, and that is freehold properties.
WHAT IS FREEHOLD REAL ESTATE?
A freehold property is one that is not owned in anyway by anyone else. It’s free of a hold by any other entity other than the property owner. The property is not subjected to maintenance or condo fees. As the owner, you own the land and whatever buildings are on it, and there are no maintenance or homeowner fees to pay. However, you as the owner must still follow local laws and regulations relating to the property (like paying property tax).
As an owner of a freehold property, you can do whatever you wish with the property as long as you follow local laws. For example, the owner of a freehold property must follow all zoning requirements of the area. If the property is zoned for residential use, the property cannot be used to run a business (and visa versa).
PROS AND CONS OF A FREEHOLD PROPERTY
As with most things in life, there are advantages and disadvantages to owning a freehold property.
Benefits of owning a freehold property include:
• A freehold property can be inherited and there is a lot less paperwork required to transfer a property like this to another person, with only a simple sales deed registration needed
• You have complete control over the property
• There are no further payments after getting the property, such as rent, service charges or admin fees
• There are no limitations on what you can do with the property as long as you follow local zoning laws and regulations
• You can enjoy the stress-free lifestyle of not needing to worry about the property’s lease running out
Disadvantages of a freehold property include:
• It can be expensive to purchase the land and any buildings on that land outright and not all lenders are willing to offer a mortgage on a freehold property
• Disputes can occur if there are multiple co-freeholders
• You’ll need to have knowledge of all local zoning bylaws and regulations
• In some cases, some outside permission may be needed to complete certain projects on the property
WHY HAS COVID-19 DRIVEN UP THE DEMAND FOR FREEHOLD PROPERTIES?
There will be a lot of financial uncertainty for the unforeseen future, and people are looking for concrete ways to help themselves feel secure and financially sound. When you purchase a freehold property, you know that there will be no lease to renew, rent to pay, or outside influences to deal with. You take an active role of your living situation with a freehold property, and you help to ensure that you have something that you can leave to your beneficiaries.
When something as world-shaking as a pandemic happens, it can really open your eyes to how fragile our existence is, and owning a freehold property can help people feel a little better suited to deal with life’s intense situations.