Fee Simple Vs. Leasehold 

There are different types of home ownership and the difference is quite drastic. One lets you buy the home and keep it FOREVER until you decide to transfer title and the other, well... expires with the land. Here is what you need to know about fee simple and leasehold properties.


You guess it, this option is a lease and expires with the ground lease. Usually, these are long term leases (ex:100 years, 50 years). The land is leased long term for a cheaper price than buying. When the ground lease expires, HOA can try to renegotiate an extension to renew the long term lease. Each owner then would be purchasing their share to extend their ownership. When searching for homes you can inquire on the duration of the remaining lease term. It is difficult to get a mortgage on these units and your ability to secure a loan will depend on how much time is left on the lease. Each banks response will vary. In general, your ability to mortgage a condo in general has many factors including ratios of owner to tenant occupancy, insurance coverage and more so, if you are interested in buying a leasehold condo you'll have to shop around to find the right bank. Your realtor will have an idea of what banks can help. Ask your realtor for help.

Pros- It is usually a lot cheaper to purchase these condos. This is great for investors that want a great rate of return.

cons- Your value dwindles with time as the lease end gets closer. Your interest in the property has a lifespan of the lease. 

Fee Simple

Fee simple is the most complete form of ownership. This option does not expire. You will own the unit until you decide to transfer title to anyone else. The land and all the upgrades belong to you entirely. Fee simple homes specifically condos are much easier to finance.

Pros- Your value increases over time with the market trends. You never have to worry about re-purchasing your share in the property

Cons- Usually more expensive to purchase a fee simple property