In deciding whether the property is for your own house can be bought or leased, it all depends on the individual case.
Before the desire to live in their own house, can be done is to solve the land question. This is often associated with significant problems, because land usually devour the bulk of the planned capital for house construction. Especially in urban areas, therefore, the procurement of a suitable building site to a convoluted task. Then either the house project is completely buried, or there must be substantial compromises in the size and location of the property, so you still come to their own home.
However, there is a solution that is much less known, and avoids the disadvantages described above: the land is not purchased, but acquired a long lease. This can be cheaper than buying, does not lead to increase of the necessary borrowing, which charged the monthly budget substantially, and often opens up access to attractive building sites.
What is a lease and how does it work?
When lease Land for a very long period (usually 99 years) lease. The farmer can cultivate the land more or bequeath the ground lease, which he buys with the lease contract to sell. The contract can be terminated by either side. He is certified by a notary and registered in the Land Register. Thus, the rights of the lessee of an owner which is very similar (so-called, land law "). It is also possible to arrange a purchase contract if the tenant later will be one 'correct' owners of the property. For the use of the country rent is agreed.
is usually long lease of public or offered non-profit institutions such as churches, foundations and municipalities. to handle complicated legal terms, contracts with private providers, which occur only occasionally.
How expensive is it? A financial example
order to give an impression of what financial benefits may be associated with a long-term lease of a normal real estate purchase, let's look at an example. The data on land prices and interest rates are here indeed elected as realistic, but of course purely fictitious, since there is a wide range and interest rates and terms depending on the economic situation can change quickly .. Whether buying or leasing is cheaper, can be judged only on the specific case.
Suppose, for the purchase of land needed to be € 50,000. Then be due at a rate of 4.8% and 2% redemption € 280 per month for the loan, after 25 years of credit would be paid off. Until then, therefore, would pay a total of 84,000 € (without loss of interest and without costs of land acquisition, such as taxes, brokerage fees, land registry etc.). If one were to assume a similar property of equal value in annual lease, one would at a rate of 4% at 166 € per month lease expect. After 25 years you would have paid a total of € 49,800. The lease payments then may continue to run, but the house is free of debt at this time usually, so that the land costs are not so much weight. In addition, you can arrange to purchase legal and acquire the property if the burden is getting smaller by the construction. As the example shows, the actual saving of credit and lease terms, and depending on the assumed duration of the contracts. In certain situations it may be that the option to purchase the property on credit, it is more advantageous.
What should be considered for lease?
The lease usually contains details as to how the property construction is allowed. Here one should make the contract as openly as possible, so that due not later additions or the construction of a garage as additional rents are high.
For disposals of leasehold is always sold the building, so you can not sell the leasehold separated from the house.
The conditions for the withdrawal of the rent law by the owner (reversion) must be strictly regulated, otherwise the owner may also give the property rates along with the building.
adjustment clauses in the contract may result in a considerable increase in interest rates over the period are so to look closely and included in the cost-benefit analysis.
general rule is that at high interest rates, the benefits of the lease are larger than in a low interest rates.
in straight terms of, life 'term of the lease may be long term, the fact that it is in fact not the owner of the land on which the own home is proving to be disadvantageous. Therefore, all details of the contract - in particular adjustment clauses for the lease amount, purchase rights, building restrictions or rights of the owner to take - are thoroughly examined.
Conclusion
The lease will help if the desired Land for lease only, not for sale. Then they should, with careful examination of the conditions - not afraid. But it is especially advantageous if the first few years just after the construction of liquidity and therefore the debt should be kept low, and in urban centers where attractive properties are rare and expensive. There you can come up with a long-term lease also still an affordable building site.
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