Leasehold??

[nickydwuk]

When a property says the land is leasehold what does this mean? Do you have to pay rent on it or a lump sum every few years?

[james the mechanic]

Hi nickdwuk,
You pay rent on the land (you don’t own it) you only own what is on the land i.e. the house.
It is often possible to buy the lease (the land title) this is known as freeing up the lease. In my experience it is rarely an economical option though.
The lease is always for a set period of time say 50 years and is transferable i.e. can be sold on with the property but beware it can sometimes be sold on without it.
That said the tenant is very secure, virtually as secure as freehold in fact, but must pay ground rent to the lands owner for ever.
Leasehold property should not necessarily be avoided just approached with caution.
I hope that helps rather than confuses matters.
James

[The Hodges]

As an example have a look at this property .

With the important but being:

The property is leasehold to Cornwall Park Trust. The lease on this house was reviewed in September 2003. The cost of the lease is $34,500 per year

I have heard of stories of the landlord not renewing the leases at the end, meaning everyone had to pick up their houses and move to another site (now there's an image).

But as James says, just don't discount them, but find out what you're getting yourself in to.

[nickydwuk]

Thanks for the info. I thought it was something like that. I don't like the thought that I could have my home and a nice bit of land, spend time getting it the way we want it then have a landlord say 'sorry, you have got to move your house'.

I wish the real estate agents would mention intheir listings which properties are leasehold etc... It is deceiving when we are looking at the cost of properties and thinking that we could afford it when really there are hidden costs. Although if the lease was for a long time and reasonably priced it could be worth it.

Something else to consider, hmmmmmmmmmm.

[Vladimir]

Hi All!

I have seen townhouses and apartments in Parnell, the price is about 250-300K and they are situated on leasehold land. For example:
http://www.trademe.co.nz/Trade-Me-Pr...htm?key=914321
What is the "evil" of leasehold property in the case of apartments?
Do the owners have to pay additional money for the land?

[markw55]

Be very very careful about buying leasehold land properties in New Zealand. Unlike other parts of the world (like the uk) they are not common and many kiwis simply won't buy them - this means that you can get the place cheaper at first but can find it very hard to sell them later.

[markw55]

Hi All!

I have seen townhouses and apartments in Parnell, the price is about 250-300K and they are situated on leasehold land. For example:
http://www.trademe.co.nz/Trade-Me-Pr...htm?key=914321
What is the "evil" of leasehold property in the case of apartments?
Do the owners have to pay additional money for the land?

Normally the lease for the land is paid by the body corporate. The owners pay the lease through the fees they pay body corporate each year.

[pieeater]

Good advice Markw55 I personally wouldn't touch a leasehold property in N.Z.with a ten foot barge pole.Oh and welcome to the forum.I've not been on here for a while but I've found it a good place to come when you get the time/inclination.Some pretty sound guys,gals on here.