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Leasehold v Bare Land: Post-BailOut Property Trading?

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  • Leasehold v Bare Land: Post-BailOut Property Trading?

    A massive mansion on a 4-unit leasehold site would
    leverage an astute investor into a 15% return when the
    new wall-paint has dried. Trustees with other leasehold
    investments need to trade the full 350K RV on a
    residential suburban section or a lifestyle block,
    as they forgo good rental income.

    Are the the Trustees out of their collective minds...?
    Or is the market for cash sales of building sites
    sufficiently depressed for somebody to leap at the
    opportunity of grabbing even a l/h positive-cashflow
    income now, as a very-viable alternative to holding
    on to their perpetually-unsaleable bare block?

    The perpetual lease is a fixed 6.25% of a conservative
    valuation, reviewed every 7 years, but surely more-
    manageable than a 10% mortgage based on a much
    higher CV land content?

    Getting a simple building consent to relocate one or 2
    3 or 4-bedroom houses on (y)our leasehold land
    would make no difference to the ground rent payable:
    question is, would the 25% return then be enough
    for a usually-freehold investor to forgo the usual
    capital gains if they are unusually introduced under
    a new key to governance?

    [PM me or check Home Page]