ADVANTAGE/DISADVANTAGES OF FREE HOLD/LEASE HOLD PROPERTIES. Here are few tips if you are looking to buy a property.. Freehold advantages: You own the property outright. You can use the property as you wish, subject only to any planning or other legal restrictions. You have greater control over the management of the property, e.g you choose when to carry out works of repair or decoration. Property may rise in value. Freehold disadvantages: A business with poor, limited or no financial history will find it difficult to obtain commercial mortgages. Cash flow will be affected by the payment of any deposit. Mortgage costs may increase in line with any rise in bank base rates. Leasehold advantages: Smaller initial outlay, giving the business greater flexibility. Less financial exposure for the business than a freehold acquisition. Rent and any service charge is a business expense spread over the lease term. Leasehold disadvantages: The lease will usually contain restrictions as to the use of the premises, allowing other parties to use the premises etc. Unless there is a break option, you are bound to comply with the lease obligations for the duration of the term. Even if you find another party to take over the lease, you will probably be required to stand as guarantor.
Posted on: Mon, 10 Jun 2013 03:58:01 +0000
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