Buying Ground Rents and Freeholds

What it is: Now that there are many more flats and apartments being built than houses, leaseholds, once rare, are becoming ever more common. All apartments in blocks are sold leasehold as to have a freehold property means that you own the land on which the property is built; clearly this cannot happen with a third-floor apartment, for instance. All leasehold properties are owned by a freeholder; that is, somebody who owns the whole building, and who leases out the separate apartments to the leaseholders. But freeholds frequently change hands, for a variety of reasons.

The initial freeholder or developer may have gone bust, they may have died, or they may have tired of the business of collecting ground rents, service charges and so on. It is possible to buy the ground rents off the freeholder and so own the building. This business is only going to grow as ever more apartment blocks are created.

Pros: Ground rents and freeholds are often sold extremely cheaply. You see investments being advertised for as little as £4,500. But the collectable ground rents may only come to £300 a year. People who buy ground rents and freeholds usually view them as a very long-term investment, and as their business. It's no use just buying one; you have to own a lot to make it work. The main reason why people buy ground rents is that when all the leasehold interests of a property run down, the buyer of these rentals now owns the freehold. In practice these days, leaseholders are likely to get together to collectively enfranchise - buy the freehold between them - and in order to do this, they have to negotiate with the person who owns the rental interest. The shorter the lease, the more the owner stands to gain from selling the freehold.

The whole business is subject to extremely complex calculations and legal processes and either way, whoever owns the ground rents stands to gain - eventually. When you buy a property, you are buying this element only and not any other covenants that may affect the building. You are simply buying the covenant to pay this rent. First of all, you have to obtain an application pack from Land Registry containing forms GR1 and GR2, or they can be downloaded from the internet. Then you have by law to give the tenants in the building the right of first refusal before going ahead with the purchase. To make it worthwhile, you would need to buy ground rents of properties with leases of 80 years or less; the shorter the lease has to run, the more it becomes worthwhile to consider buying the ground rent element of the building.

There are now many companies that buy up ground rents; this is a specialist area and one, really, which is not highly recommended for the amateur. The business of buying ground rents is best left to the seasoned property investor who has, maybe, started off by buying and selling their own home, graduated to buy-tolet, buying at auction, and gradually become more confident and experienced in the kind of property investments that ordinary people do not readily understand. Very often, companies or individuals buy up ground rents with the intention of increasing them once bought, as some properties are nominal and are charged on a never-increasing basis. Some properties can be as little as £25 or £50 a year.

Also, nowadays people are buying up property to make money from enfranchisers - that is, the ever-increasing number of leaseholders who collectively buy their freehold. When enfranchising, leaseholders must compensate the ground rent holder for the total income stream he or she will lose and the present value of the ownership he or she would have secured when the leases expired. As you can see, buying rentals can be a very complicated business and those interested should take advice from a lawyer, or a company such as Rosetta Consulting, which specializes in real estate and enfranchisement law. For more detail Click  acheter ou louer

To Own a House - A Dream of Every Individual

The ultimate motive of every human being is to lead a happy and peaceful life, a life, which in itself is motivation for the person to move on and enjoy his presence on this earth. Being contended, optimistic and joyful, allows a person to achieve his goals and helps in fulfilling the dreams. The struggle to lead a calm and holy life is something which has become a daily routine for every individual. A person has to put in a lot of efforts to be able to acquire the three basic essentials of life.

The basic three amenities for leading a successful life are food, water and shelter, though a lot more things have been added to these elements, shelter or personal home is one of the most challenging things to accomplish. A person has to work all 24 hours to earn his living and with the increase in competition, one has to prove his potential everyday and achieve more than the said targets to maintain his position in the organization. Also with the fluctuations in the market, jobs are no more left with the tag of being permanent. Performance, results and profit are the keyword on which the job industry works these days.

To own a house, a house which entirely belongs to a single person, which one can decorate and maintain according to his choices and likings, is a dream of every individual. Every person wants to get rid of rental homes, where he does not have any control over its structure and style and have the restrictions to shape his lifestyle in accordance to the rules of the landlord. Houses on rent or living on rent basis is a major trend all over the world. People migrating from one city to another or from one country to other, in search of job always take the option of taking a house on rent. They prefer taking apartments on rent due to the time period they have to spend there, which is in most cases for a short span.

Not only individuals opt for an apartment on rent, but people having families also go for rented houses due to fact that owning a house is a major concern for families as it involves a large amount of money. Its not that families do not want a personal home, but with the rise in the price of commodities, saving money, for the future and purchasing other big assets is becoming difficult. Buying a house is a savings in itself, as it allows a security of a permanent place of living for the individual and his family.

Purchasing one's own house saves the money given to the landlord as a rent, though that money may go as a loan installment for house loan but still, each loan installment would lead the person, a step closer towards owning his apartment. This would be counted as a form of saving one does for his future because the money which he is paying as a loan is used for the ultimate goal of buying a house. The dream of having one's own apartment is equivalent to a farmer's ambition of buying a piece of land, which enables him to earn his livelihood.

The owner of the house is not only the king of his life, principles, lifestyle, but also he can use his apartment as the source for taking other business or personal loans. The apartment can act as a proof of security and credibility for the person's financial status and family background. To start a business, one needs loan from the bank, for which he has to show the assets he own, and a personal apartment is the best asset to prove your capability for the respective loan.

Also, a permanent or a personal apartment is the place where a person is the ruler of his life, he does not have to follow strict regulations of his landlord, like time bounds, music usage, parties, friends, etc. So, one should always try and grab the opportunities of owning a house rather than living in the shackles of the landlords.

Renting vs Buying a house