What are the main differences between leasehold and freehold properties?

The distinction between leasehold and freehold properties is primarily centered around ownership rights and the nature of the title associated with each type of property.

Leasehold properties involve an arrangement where an individual gains the right to use and occupy a property for a specified period, but does not own the land itself. Instead, the land is owned by a landlord or a freeholder. The leaseholder has a lease agreement that typically stipulates the length of the lease, conditions for use, and any obligations such as maintenance. Once the lease term expires, the ownership reverts to the landlord. This structure creates a clear delineation between the rights of ownership and the rights of use.

In contrast, freehold properties represent full ownership of both the building and the land it sits on. The owner of a freehold property holds the title outright without any time limitations or obligations to a landlord, enabling greater control over the property. The owner is responsible for any associated expenses, such as property taxes and maintenance, but does not have to worry about a lease expiration impacting their ownership rights.

Understanding these differences is crucial for determining the implications of property ownership, investment considerations, and the rights and responsibilities involved with each type of property.