Leases are legal contracts that bind the client and the property owner into a mutual agreement on terms that are acceptable to both parties. The lessor agrees to rent their property to the lessee for a predetermined amount of time and collects a single payment to cover the entire term of the lease.
Property leases have been around for quite some time, even though this fact may seem quite novel to some individuals. Depending on the property’s location and the seller, the lease on the real estate could begin with a term of 99 years or even longer right off the bat.
When a property’s owner has a short lease, it becomes increasingly challenging for them to sell the home. Banks and other financial institutions are becoming more hesitant to lend money on flats and properties with short leases as the average length of a lease continues to decrease. Because of this, property owners frequently extend the length of their leases in the hopes of fetching a higher selling price. Although it may be somewhat challenging to sell properties that have a short lease, it is important to keep in mind that people do purchase flats that have a lease term of 70 years or less. Here are some of how you can sell your apartment with a short lease.
After Extending The Lease, You Should Sell It
There is no way to dispute the fact that the value of an apartment that has a longer lease is greater than the value of a flat that has a shorter lease. When you sell your short-lease flat, what this means is that you are selling your property at a reduced price. This is because only a select few people are interested in purchasing properties that have short leases.
Therefore, your best bet would be to hire an estate agent after you have extended the length of the lease to sell the apartment as a long-lease investment property. As you extend the lease on your property, a growing number of homebuyers and property investors will become interested in purchasing your home as an investment opportunity. In addition to this, the process of financing the investment will be simplified for your investors. When purchasing a home, it is much simpler for buyers to obtain financing for a property that has an extended lease.
Take note that the request to extend the lease can only be made by those who have owned the apartment for more than 2 years. There is potential for a lease extension of up to ninety years for a flat. You have the option of extending the lease informally, or you can choose to go through the formal legal process that is involved. In either case, it is more likely that apartments with longer leases will sell more quickly and for a higher price than apartments with shorter leases.
You Should Consider Selling Your Property To A Cash Buyer
The difficulty in obtaining a loan is the primary problem associated with apartments that have short leases. Therefore, if you do not wish to extend the lease on your property, you should sell your short lease flat to a buyer who is willing to pay cash for it. Investors and cash buyers don’t typically have a problem with short lease terms. On the other hand, it is not easy to find someone who has the cash readily available for real estate investment because the majority of people who buy homes finance the purchase of the property through the use of mortgages.
Purchase Of Freehold
One additional choice is to purchase the freehold directly from the freeholder. It is comparable to the process of extending the lease, and the cost of purchasing freehold property is also quite comparable to the sum that must be paid to extend the lease. Before you purchase a freehold property, it is in your best interest to get advice from a surveyor or a lawyer.