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Aus Salespoint

If you're out trying to find condo's in and around the Vancouver area, chances are you've come across properties who have the distinction "Leasehold Strata." Appealing as they may be, understanding what you're buying can save you headaches when you eventually choose to sell the property later on.

You're initial interest in these properties may have been triggered by the low price of these units with some units being offered at hundreds of thousands of dollars lower than what it would cost to purchase a similar unit having a Freehold Strata distinction. Not merely is the price enticing, but additionally many of the Leasehold Strata units in across the Downtown Vancouver area are in prime locations along False Creek.

Condo buyers' shouldn't run for the 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 might 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 to a developer or leasehold tenant. Each time a developer sells a person strata lot, the developer sells the developer's interest as 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 legal right to exclusive possession of the strata lot for that balance of the term remaining underneath the lease and the right to trade that interest. What are the results at the end of the term with the lease will have a large bearing on the value of the house and should be carefully scrutinized. It is critical that when looking to buy a leasehold strata property, the buyer takes a close look in the model strata lot lease for the formula of the ultimate payout.

Real Estate - The Triton on 10th, the industry development built on land belonging to the Vancouver school board at Broadway and Granville falls into this kind of category where upon expiration of the lease in 2096, the school board must purchase each interest on the current market rate. The price of a two-bedroom unit in the Triton is about $500-$600 per sq . ft . depending on the layout, direction it faces and which floor readily stored away on. The building is 13 yrs . old, in a location close to shops and restaurants, and minutes far from downtown.

A recent sale of a two-bedroom, 1240 square foot unit was $623 000 which can be $502 per square foot. That's hundreds of dollars less per square foot than a comparable freehold strata unit. The Triton on 10th is actually 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 machine can be less liquid when it's time to sell, and they do not see the value appreciation 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 when the lease expires, the leasehold landlord becomes the rental landlord, and also the leasehold tenants become rental tenants paying rent at the current market rate. This type of Leasehold property will depreciate in value and even more so as the lease date approaches. In cases like this as the expiration date approaches to within 30-40 years any owner will have a very difficult time selling the property, namely because you will have to find someone capable of paying with cash because banks will be very reluctant to mortgage this kind of property.

Vancouver Real Estate - Many properties along Beach Avenue are quickly approaching their lease expiration dates, but inspite of the desirable location, sellers realize that in order to sell this kind of property they must lower the price. But as a buyer, careful consideration must be taken in to the price of the unit and also the number of years until the lease expires.