When buying land in Kenya, it’s important to understand the nature of the title deed you’ll be getting. There are two main types of title deeds: freehold and leasehold titles. They significantly impact how you use, manage, and transfer your property. Each has its unique characteristics, advantages, and disadvantages. In this article, we’ll discuss the differences between leasehold vs freehold titles so you can make an informed decision when buying land.
What is a Freehold Title Deed?
A freehold title gives you complete ownership of the property, including any structures on the land. You have the right to use, sell, or rent out the land as you see fit if you have a freehold title. Freehold titles give you maximum control of the property. You own the land for an indefinite period until you sell it.
Advantages of Freehold Titles
Some of the advantages of having a freehold title are;
- Ownership: Permanent ownership of the property
- Control: Greater control with the freedom to develop the land, make alterations, and sell without needing approval from a superior titleholder. But this is done within the local laws and regulations.
- Flexibility: You can sell, rent, or modify the property as you wish.
Disadvantages of Freehold Titles
The demerits of a freehold title include:
- Costs: Freehold properties are usually pricier than leasehold properties and require a significant upfront investment.
- Responsibilities: As a freeholder, you are solely responsible for the maintenance and upkeep of the property, which can be costly.
- Neighbors: Your neighbours can make changes or neglect their property. That can result in an aesthetically unappealing neighborhood, driving down the value of your property when you want to sell.
What is a Leasehold Title Deed?
A leasehold title grants you the right to use a property for a specific period. This usually ranges from 30 to a maximum of 99 years, though you can apply for a renewal once the lease expires. The owner of the land retains the ultimate ownership of the property and you only lease it. Unless the lease is renewed, ownership of the property reverts to the freeholder.
When you buy a leasehold property, you are issued with a certificate of lease.
Why Invest in Leasehold Land in Kenya
Leasehold properties offer several benefits to land buyers. Leasehold land in Kenya is an attractive investment option because it provides long-term ownership rights without the high costs of freehold land.
Some of the benefits of buying leasehold land include:
- Lower Initial Cost: Leasehold properties are often more affordable upfront than freehold ones, making them an attractive option for first-time buyers or investors with limited capital.
- Shared Responsibilities: In many cases, the freeholder is responsible for maintaining the property’s common areas, reducing the burden on the leaseholder.
- Flexibility: Leasehold properties may offer more flexibility in terms of usage, especially in urban areas where freehold land is scarce or unavailable.
- Controlled Development: Development in a leasehold property and it’s therefore easy to maintain the aesthetics of your neighborhood.
The only downside to leasehold land is that you don’t have complete ownership of the land and the lease agreement may contain restrictions on what you can do with the property.
Freehold vs Leasehold Titles: Key Differences
Buy Leasehold Land in Kilifi
Contrary to popular belief, investing in leasehold land in Kenya is a lucrative investment opportunity. It gives you a chance to save on costs when buying land, and maintenance responsibilities for the common areas fall on the landowner.
With a growing economy, now is the perfect time to buy leasehold land in Kilifi. Green Heart of Kenya’s 99-year leasehold property gives you the opportunity for long-term ownership without the high costs of freehold land.