Contrary to belief, there are numerous choices in which to hold land. The extent and type of property investment, one wishes to have is mostly dependent on the amount of private involvement throughout the life span of their investment, in addition to the main reason for the investment. Owning property for the purposes of leasing to third parties may require considerable personal involvement as opposed to investing in a vacation home. Some investors might be interested in property because of its capital growth component in addition to its ability to create attractive yields and yields over time. For others it could be to pursue non financial goals, such as having the ability to control a tangible asset. Thus before one decides to invest in property you need to clearly define the motives behind the investment. What is more, from an investment standpoint considerations of possession management and tax issues are of vital importance. This decision has to be considered carefully as changing from one form of ownership to another may be very expensive. The property conveyancing process is a lengthy procedure which one would not like to experience more frequent than necessary. In this newsletter we discuss the most prominent ways in which investors can hold land in South Africa
This is by far the most frequent type of ownership in South Africa. It implies that the owner retains direct title over the house. Ownership would be enrolled in the deeds office in the name of their operator. Freehold property could be owned by both individuals and companies alike. The advantage of the form of ownership is that the owner has maximum control within their investment and might dispose of their property as they wish. Ownership in this form also means the property might be utilized as collateral to obtain loans and financing.
Leasehold, also called renting property does not give ownership to the renter; however throughout the length of the lease or rental agreement, the lessee will enjoy the exact same advantage as in the case of freehold above. It enables them to use and occupy the house for the duration of this agreement. The renter pays more than a monthly agreed rental to the landlord which entitles them to remain in the property. There are various types of lease arrangements including short term rentals, long term rentals or even rentals arranged with the choice to purchase the property.