Freehold properties vs section titles
Category RealADVICE
"While the location, size, and the amenities around a property are all important factors to consider, the type of ownership you choose also has significant implications for your budget, responsibilities, and overall experience," says Gerhard Kotzé, CEO of the RealNet property group.
Here is a rundown of the most common South African property ownership options:
Freehold Properties:
Freehold ownership is when you own both the property and the land it is situated on. With freehold homes, you have complete control over the property, including renovations and extensions.
Pros:
* Freestanding homes give you the maximum amount of freedom and flexibility.
* They often provide private garden and entertainment areas.
* They typically offer the most space of all property types.
Cons:
* Your maintenance costs will be significantly higher, as the upkeep of the property falls entirely on you.
* You'll be solely responsible for all the rates and taxes.
* If you buy in a gated community or estate, you may also be restricted by the rules of the body corporate.
If you have the budget for it, and value privacy and space, then a freehold property will be an excellent choice.
Sectional titles:
Sectional title ownership is when you own a specific unit like a townhouse or flat contained inside a larger development, while the ownership of common areas and items like communal braai areas, pools, gardens, and security systems is shared among all residents. Townhouses, flats and other sectional title developments are governed by a body corporate made up of owners.
Pros:
* Maintenance costs will be lower as they will be split between owners and everyone contributes via monthly levies.
* You get access to built-in amenities at no extra cost.
* Having other owners nearby offers better security than living in a freestanding property.
* Sectional titles are typically cheaper than freehold properties.
Cons:
* You will have far less privacy in a sectional title home.
* Body corporates can have harsh rules and restrictions on renovations and what you can do with your property.
* Monthly levies must be paid in addition to rates and taxes.
"Sectional titles are great for first-time buyers, people after a low-maintenance lifestyle, and buyers looking to downsize.
"All in all, both sectional title properties and freestanding homes make great choices. Ultimately, the right choice for you will depend on your needs, preferences, and affordability, so before making this decision, you should always first consult with an experienced Property Practitioner.
Author: RealNet
