Hello,
I’m new to this forum and have browsed through the search a bit, but haven’t quite found what I’m looking for.
Here’s the topic:
We (a young couple in our early 30s, both working) are currently looking to buy residential property (condominium or house). We are really new to this and feel a bit overwhelmed by the whole process. The internet offers a thousand different opinions.
We currently have an offer and would like to hear your opinions on it, as well as learn about experiences with this kind of situation and what additional costs we should expect.
- End-terrace house on a leasehold property
- Leasehold term: 75 years
- Construction start next year
- Plot size about 400sqm (4300 sq ft)
- The leasehold land belongs to the Catholic Church and is located in Saxony, near Leipzig
- I have a leasehold contract for a comparable property from the same project. It states that the annual ground rent is €2.50 per sqm (about $2.70 per 10.8 sq ft)
- No commission fee; property transfer tax and notary fees must, of course, be paid
- The total cost should be around €200,000–220,000 (about $215,000–235,000)
Now the questions:
- What are the general experiences with leasehold properties?
- What ongoing monthly or annual costs can we expect in addition to the mortgage payments?
We have calculated various loan options and ideally do not want to take on more than €260,000 (about $280,000) in credit. Since it is difficult to find something within this price range in Leipzig and the surrounding area, this seems like a suitable alternative at first glance. However, many acquaintances advise us against leasehold.
Therefore, I hope to get some independent opinions from you.
Best regards from Leipzig
I’m new to this forum and have browsed through the search a bit, but haven’t quite found what I’m looking for.
Here’s the topic:
We (a young couple in our early 30s, both working) are currently looking to buy residential property (condominium or house). We are really new to this and feel a bit overwhelmed by the whole process. The internet offers a thousand different opinions.
We currently have an offer and would like to hear your opinions on it, as well as learn about experiences with this kind of situation and what additional costs we should expect.
- End-terrace house on a leasehold property
- Leasehold term: 75 years
- Construction start next year
- Plot size about 400sqm (4300 sq ft)
- The leasehold land belongs to the Catholic Church and is located in Saxony, near Leipzig
- I have a leasehold contract for a comparable property from the same project. It states that the annual ground rent is €2.50 per sqm (about $2.70 per 10.8 sq ft)
- No commission fee; property transfer tax and notary fees must, of course, be paid
- The total cost should be around €200,000–220,000 (about $215,000–235,000)
Now the questions:
- What are the general experiences with leasehold properties?
- What ongoing monthly or annual costs can we expect in addition to the mortgage payments?
We have calculated various loan options and ideally do not want to take on more than €260,000 (about $280,000) in credit. Since it is difficult to find something within this price range in Leipzig and the surrounding area, this seems like a suitable alternative at first glance. However, many acquaintances advise us against leasehold.
Therefore, I hope to get some independent opinions from you.
Best regards from Leipzig
nordanney schrieb:
I have to disagree with you. Leasehold rights are just as much in demand as full ownership. Exactly. Several houses have already been resold here. Anyone who has an issue with that wouldn’t have built on a leasehold plot in the first place. Their loss—they just need to keep looking. There are plenty of others searching who don’t mind. So, instead of 8 interested buyers, maybe it’s only 5. I don’t need to take out an extra $150,000 in credit just for a few more options.
Snowy36 schrieb:
But the resale value of a property with leasehold is simply lower than without it... The house’s value does not increase just because you add the land value.
The overall value remains the same.
That’s one of those odd arguments you hear, but nothing more.
The only real difference is that you have to show more equity to the bank.
That’s where the wheat separates from the chaff.
H
HilfeHilfe16 Jul 2019 22:52Nordlys schrieb:
You need to understand how the churches finance the pensions of their clergy. Through pension funds that are supported by the lease agreements of the land. Therefore, churches typically do not sell land, whether it is agricultural land or residential leasehold. It is very, very likely that the lease will be extended after the 75 years. Why would they want to own the house! And the funds for the children of the priests!!
H
hampshire16 Jul 2019 23:04From a societal perspective, I find leasehold an interesting model—especially as a sustainable option for municipalities aiming to ensure affordable housing. Personally, as a father of two children, I prefer the idea of full ownership and the ability to pass it on. I suppose you could call that "wanting to have your cake and eat it too"...
N
nordanney17 Jul 2019 07:36guckuck2 schrieb:
One disadvantage of leasehold is often the limited mortgageability. That means more equity is required.I don’t understand. Why limited? It hardly matters in the single-family home/condominium sector, but more so in commercial real estate—depending on the specific conditions. More equity is ALWAYS required with full ownership (in absolute amounts).