User:ZookWoodham675
If you're out searching for condo's in and around the Vancouver area, likelihood is you've come across properties that have the distinction "Leasehold Strata." Appealing because they may be, understanding what you're buying will save you headaches when you eventually decide to sell the property down the road.
You're initial fascination with these properties could have been triggered by the good deal of these units by incorporating units being offered at hundreds of thousands of dollars under what it would cost to buy a similar unit using a Freehold Strata distinction. Not merely is the price enticing, but also many of the Leasehold Strata units in across the Downtown Vancouver area will be in prime locations along False Creek.
Condo buyers' shouldn't run for that hills the minute they see the Leasehold distinction on a property, but behave as they would when buying any property and consider a number of options before they commit. What may be right for some may not be right for others.
A leasehold strata distinction is when a public authority or leasehold landlord the master of a parcel of land leases the land out to get a set number of years with a developer or leasehold tenant. Whenever a developer sells someone strata lot, the developer sells the developer's interest like a leasehold tenant to the buyer who then represents the interest as a leasehold tenant.
Considering that the buyer is purchasing the interest of a tenant within a lease, he or she buys the right to exclusive possession of the strata lot for that balance of the term remaining underneath the lease and the directly to trade that interest. What goes on at the end of the term of the lease will have a sizable bearing on the value of the property and should be carefully scrutinized. It is crucial that when looking to buy a leasehold strata property, the buyer takes a close look at the model strata lot lease for your formula of the ultimate payout.
Real Estate - The Triton on 10th, which is a development built on land owned by the Vancouver school board at Broadway and Granville falls into such a category where upon expiration with the lease in 2096, the school board must purchase each interest at the current market rate. The cost of a two-bedroom unit inside the Triton is about $500-$600 per square foot depending on the layout, direction it faces and which floor readily stored away on. The building is 13 years of age, in a location close to shops and restaurants, and minutes far from downtown.
A recent sale of the two-bedroom, 1240 square foot unit was $623 000 which is $502 per square foot. That's big money less per square foot than a comparable freehold strata unit. The Triton on 10th could be a good fit for someone who doesn't' have the plan for a freehold strata unit. But buyers' should recognize that with leasehold properties banks have stricter approval standards, the unit can be less liquid when it comes time to sell, and they don't see the value appreciation exactly the same way a comparable freehold unit would.
There are other developments in the downtown Vancouver area along False Creek whereas if the lease expires, there is NO payout. Meaning if the lease expires, the leasehold landlord becomes the rental landlord, and the leasehold tenants become rental tenants paying rent at the current market rate. This kind of Leasehold property will depreciate in value and many more so as the lease date approaches. In this case as the expiration date ways to within 30-40 years any owner could have a very difficult time selling the house, namely because you would need to find someone capable of paying with cash because banks will be very reluctant to mortgage this type of property.
Vancouver Real Estate - Many properties along Beach Avenue are quickly approaching their lease expiration dates, but inspite of the desirable location, sellers recognize that in order to sell such a property they must lower the cost. But as a buyer, consideration must be taken to the price of the unit as well as the number of years until the lease expires.
