Category Archives: Lease Hold

All You Need To Know About Selling Leasehold!

Selling leasehold is a bit of a hassle considering the fact that lot of paper work is involved before the actual task. But before we get into the details regarding selling of leasehold, it is absolutely necessary that you know what leasehold is. The right which allows you to use or at least hold property for an agreed period of time for a fixed price is known as leasehold. The agreement is based on a contract and definitely acts as an asset.

You could sell leasehold by adopting two ways. The first way is auction. Of course auction is quite an unpredictable way. It moreover allows you no means of knowing what price the leasehold will get sold off for or even whether it will be sold at all.

The other option is that you independently find a genuinely interested investor. If he/she agrees to buy the leasehold after taking in all the details your problem is solved. All your tenants, however, must agree upon the change of ownership.

Freehold Verses Leasehold

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In the real estate business, freehold and leasehold are two important terms. As a buyer of a house, you need to have an idea of the difference between the two in order to get the best deals.

In simple terms, freehold and leasehold are two different types of estates. If you buy freehold property (land, building or others), you will be bale to live there for an indefinite period of time while in case of a leasehold property, you will only be able to live there for a specific period.

In case of the leasehold property you have to pay rent to the land owner of the period that you stay. After your lease ends, the property goes back to the owner. This is not the case for freehold property as you will own it after buying.

Based on your tastes, preferences and budget, you have to choose between freehold property and leasehold property.

What do lenders require while extending lease

Lease Property, Real EstateThe lenders need to be very careful before they extend their lease. It is always better to consult a legal advisor before extending the lease. The lease agreement should be proper in order to avoid future problems. The lenders have all rights to increase the lease rate after the leasing period gets over. They may either change the lease agreement to a different person or extend the agreement to the same leaser.

It is essential to consider the pros and cons before extending the lease agreement. Always make sure it is advantageous before you make changes in the lease agreement while extending it. The lenders may look into the credit history of the leasers and their financial background to avoid problems in the future. They may also sometimes look for the personal background of the leaser sometimes. However leasers should also take necessary steps to prove their credits to their lenders.

Finding a perfect free lease agreement

Real Estate, Lease PropertyMany people prefer leasing their homes which will enable them to purchase it in a future time after the end of the lease period. While entering into a lease agreement the legal documents must be accurate and it should bind both parties and must contain all the necessary clauses included. There are many online sites which offer free lease agreements. It can be downloaded and printed for use. These ready to sign documents are generally prepared by well qualified legal professionals.

There are many types of lease documents and you can choose what you need. Different types of lease agreements are there for different types of property. Care should be taken to check and make sure all the clauses are included. Consult a legal advisor or get it approved before signing the documents. The perfect free lease agreement will minimize the expenses, save time and provide the necessary documents ready to be finalized.

How does a lease purchase work?

Lease Property, Real Estate,A lease purchase agreement is a unilateral agreement wherein the purchaser will decide either to buy the property or not by the end of the lease agreement. An agreement is made between the buyer and the seller to lease the property for s particular period of time at the end of which a sale is made or the purchaser decides to leave the property. The buyer has to make an upfront payment and then pay rent every month which will be part of the purchase price he has agreed to make.

The house owner has an added benefit as the house will for sure be taken for the price fixed while leasing even if the prices of the land fall during the lease period. The tenant on the other hand has the option to either buy or leave the property after the lease period. The legal lease documents must be made to avoid confusion at the later period.

Zero Down Investing With Lease Options

Property, Investment, LeaseSome mortgage companies will allow you to acquire property without paying any amount or down payment. This is called zero down investing. One way to zero down investing with lease option is to acquire property from a seller where you pay an option fee after you find a lease option buyer. When the buyer has pays you the option fee, you pay the seller their fee and you are left with some amount as profit. This is often referred to as a sandwich lease option, where you pay a lease option with no money out of your pocket.

 

The other option is not to pay the seller an option fee until you find an option buyer. The option fee collected is yours for keeps. This is zero down leasing in a way. Having cash reserve is however good to keep you going in case something goes wrong with the deal.

Sell Your Home with a Lease Purchase

Lease Purchase, Property, Real EstateHome ownership can be a very nice way to express your independence. But then there are many chances that you may end up walking away penniless once you are finished with your real estate agents. You may even be required to pay after this ordeal. This may make it necessary to delay selling your home, though with good advice you may by pass this option; profitably that is.

A good realtor will give you the advice to list your home on the website and direct to make a lease purchase agreement. This option will cost nothing but still markets the home. The lease purchase agreement will maintain the ownership of your home as well as be able to rent it out.

The lease purchase hybrid benefits both the seller and the buyer. The seller though can always keep all the rent if the buyer does not purchase the property.

Why leasing an asset is better than purchasing it ?

There’s a whole economic rationale behind leasing of real estate assets by most the companies. One of the foremost is the tax benefits accruing to those who take assets on lease. The companies, the financial institution and different individuals derive different forms of tax benefits out of this arrangement.

Although the marginally profitable organization might not be in a good position to squeeze out the tax benefits out of leasing real estate property, the highly profitable organizations and individuals are in a perfect position of take the maximum out of accelerated depreciation clause.

A large organization is in a position to secure a greater tax benefit by leasing an asset from an individual or an organization as against buying the property upfront. Also because of stiff competition, a part of the tax benefit might be passed out to the lessee in the form of lower lease payments than what would otherwise be the case.

Another disparity in the tax structure is the treatment of alternative minimum tax. For an organization under the AMT, the accelerated depreciation is a preferred tax item whereas the lease payment is not. Such organization would prefer to lease a real estate asset from a third party that is paying tax at a higher effective rate.

The greater is the divergence in the abilities of the interested parties to secure the tax benefits associated with leasing of real estate asset, the greater would be the attraction of lease financing of real estate.