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This time, it was distributed on CONSPIRIT's official channel on YOUTUBE.
Episode 16: Boost your quality of life with real estate management!I would like to send you the contents.

Now, the topic this time is"Land lease"is about.
When looking for an income-generating property, have you ever thought, "Wow! That's cheap!" only to find out it's a leasehold property?

There are cases where it would be a waste to simply avoid it without trying it.
There are cases where it's better not to buy something just because it's cheap.

So, this time I would like to summarize the basics of the advantages and disadvantages of leasehold properties.

Benefits of Leasehold Property

The first benefit is"Cheap compared to ownership!"That's the point.
I think this is the main reason why people choose to lease.
It is possible to purchase a property in a prime location in the city center at a high return, so there are people who prefer to look for leasehold properties.

The second benefit is"No fixed property tax or city planning tax on land".
Obviously, the responsibility for paying property taxes lies with the property owner.
In the case of a leasehold, you rent the land and own the property on it, so you are not required to pay land property tax.

However, the only thing you need to be careful about is the land portion.
If you own the building, please be aware that you will be subject to real estate tax (fixed property tax and city planning tax) and real estate acquisition tax on the building portion!

And the third benefit is:"It is possible to renew the lease even after the expiration date = In effect, it can be used in the same way as ownership."That's the point.

The land lease will be returned to the landlord at the end of the lease term, but it can be renewed unless it is a fixed-term lease.
In particular, under the old law, the rights of the lessee are strong, so many people continue to live on rented land for several generations.
It is no exaggeration to say that it is essentially a matter of ownership.

If you can get this for cheap, that's a great benefit.

Disadvantages of leasehold properties

Now, nextDemeritis!
In general, the fact that it is not "ownership" seems like a disadvantage,
Let's take a look at what specific drawbacks this actually brings.

The first disadvantage is"It's hard to get financing"is!
First of all, why is it so cheap? One reason is that it is difficult to get a loan for it.
Also, because it is not ownership, it is difficult to obtain a collateral valuation, and even if one is obtained, the valuation may be low.

Furthermore, if the loan is difficult to obtain and the property is "difficult to buy," this is synonymous with "difficult to sell."
Compared to ownership, there is a good chance that liquidity may be lower, so we recommend that you carefully plan your exit strategy.

And the second disadvantage is"Rent is generated every month"That is the point.
Naturally, this rent is charged in place of the purchase price of the land.
If you operate it as a profitable property, it will be recorded as a running cost,
This is an expense that will affect your cash flow, so keep it in mind.

The third disadvantage.
"Sales, expansions, renovations, and rebuilding require the landowner's consent."That's the point.
Personally, I actually find this quite troublesome.

The reason is that, as you often hear around leasehold properties,
Do you know the word "hankodai"?
When there are changes to the contract or when selling,
Whether or not consent can be obtained is of course
You will be charged a fee each time.

This is what is commonly called "hanko fee."
For example, in the case of consent to transfer, 10% of the leasehold price,
It's not that there isn't a certain level of market value,
There are many factors to discuss and decide with the landowner.

There are cases where adjustments are not made and problems arise, so
In terms of cost and effort,
It may be better to take some of the hassle into account here.

summary

So, this time I've summarized the advantages and disadvantages of "land leasehold".
How was that?

Many people tend to avoid "land leases" based on their image of them.
Is it possible to realize a high return in a good location in the city center?
It is true that this is a major advantage.

Does the "Old Land Lease Law" apply to topics related to land leases?
Will the Land and House Lease Law, which came into effect on August 1, 1992, apply?
The situation also varies greatly depending on the

By studying thoroughly,
For your operational goals
I think you can decide if it fits or not.

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