I thought this was an interesting topic about buying real estate today where a person was looking at some properties with a price range in mind. All the typical points came up such as wanting one that is close to particular amenities as well as having affordable long-term monthly fees to maintain. In scanning through the current listings they were shocked to see how some properties seemed like a steal compared to others.
You know what they say when something looks too good to be true right? In some particular case there was nothing wrong with the house or building in general. However, the ownership of the property or land was. For example, there was this one place that seemed great as it was within the city and has great views. However, it was indicated that the property was a “Prepaid Leasehold with the City of Vancouver’s famous False Creek neighbourhood until 2036”. That fundamentally would mean if the lease expires then you kind of have to get your property off the area which isn’t exactly realistic.
Then there was another one that seemed like it was a good price at a good location. However, the catch was this one said it was “Shares in Co-operative.” That means the property is treated almost like you not actually owning a company versus just getting shares of it. A lot of banks wouldn’t even want to offer financing on such types of ownership since it’s not like owning a condo or house.
I was always told that when you buy a home the main value from purchasing it many times are items such as the land. Without it, the property isn’t as valuable. So fundamentally if you could actually own say the house and property versus the leasehold setup, it can make more sense in the long run if even say the option is $50,000 more as an example. It’s different if you just need a place to live temporarily such as renting. But if you are going to invest for the long term in a home you should value the land property with sole ownership a lot versus just the building itself.