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Lease land - alternative to land purchase?To realize the dream of owning a home, not a few people are planning to build their own home.
This allows them to realize their individual ideas and assume that in the years following the construction no renovation work on the home.
Therefore, not a few prefer the new building to the purchase and renovation of an old building. However, from the outset, higher costs are due to one than when buying a house that has already been built. A large part of this is determined by the price of the land and not infrequently the house construction fails exactly at this point, since the credit load shoots in the immeasurable.
However, leasing a property instead of buying it can be a sensible and cost-effective alternative; provided you decide on the right lease model.
General lease or so-called leasehold?
Lease agreements in general do not differ in detail from leases and may be limited in time or indefinite. The property remains with the notarized person, the right of use, however, passes to the tenant.
However, this requires the consent of the lessor for change measures. In addition, there is a right of termination on both sides and no right to continue the contract after the end of the term. These points mean that the lease of a building plot is not recommended in principle.
It looks different in the so-called hereditary lease. For this one finds
in the building lease law the appropriate legal basis. The hereditary lease is usually over decades, not infrequently even 99 years, completed.
The tenant acquires rights that are equal to those of an owner. Even the right to carry out construction work on the leased property is governed by hereditary lease, so that the owner does not have to constantly obtain permits.
The property acquired by leasehold can even be passed on by the tenant to his descendants and, if desired, also sold to other interested parties. All this is defined in a notarised deed.
If tenants and landlords are in agreement, a subsequent change of ownership can also be entered into the lease. So is
It is possible that in the sense of a lease purchase, after a certain number of monthly installments, the property automatically passes into the possession of the tenant - or it is a purchase price is fixed, which is payable at a certain time.
So the tenant becomes owner of the property. The monthly amount to be paid is called the rent.
Financial aspects Land purchase or lease
It is usually the financial aspect that leads a client to consider a land lease instead of buying land. And here you can actually save money every month, whereby in the long run you often have to pay more than is the case when buying land.
How high the land price or the rent for a property is, depends primarily on the location of the property and can vary greatly. Expressed in figures, however, it can be said that with an average land price of 50,000 euros, you have to pay nearly 100 euros more per month to pay for a financing than with the rent for the same property.
However, a credit-financed property is paid off after 20 to 30 years, while the lease continues to run either until the end of the contract or until the date of purchase. If one now assumes the average life expectancy of the Central Europeans, one will save one hundred euros per month on leasing, but in the end, however, have paid about a quarter more for the property.
This should be weighed before deciding to buy or lease.
The contract is important
As with the purchase of land, you should pay close attention to the contents of the contract in the land lease. Because here hides
a big potential danger. The contractual content should be as open as possible, because only then is it conceivable to cultivate the leased property according to his own ideas and shape.
Otherwise, the smallest changes or deviations from the contractual requirements can open up a long approval path and result in an increase in the rent.