Lease hold

Paresh

New Forum Member
Registered
Apr 22, 2012
15
2
3
Edmonton
#1
Any idea about lease hold and free hold property? I viewed a 2 bed room apartment in Edmonton downtown for 99 years lease for 50,000$ and then 300$ condo monthly fees.
Is it a good investment?
The company says this is new in alberta but is common in Vancouver and in some parts of BC. Please let me know if any expert advice.
Thank you


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ThomasBeyer

Senior Forum Member
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#2
It’s getting more common in BC. Some folks won’t buy lease hold. In Vancouver you can buy waterfront THs in False Creek for under $400,000 now, but leases expire in the 2020s. No one knows what happens once lease expires.

99 year prepaid lease ok for the first 50-60 years I’d say then fast value deterioration.

So a condo for 50,000 that rents for say $1000/month is probably a decent investment if prepaid lease is more than 60 years still.


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Paresh

New Forum Member
Registered
Apr 22, 2012
15
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3
Edmonton
#3
Thank you Thomas.
Is there any other Liabity in deal like this. In this deal, it seems one co is land owner, which seems further assigned a party who offers lease which some can sign as lease
Holder for 99 years. Do lease owner have any liability like Condo owners?
Thank you



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ThomasBeyer

Senior Forum Member
REIN Member
#4
Thank you Thomas.
Is there any other Liabity in deal like this. In this deal, it seems one co is land owner, which seems further assigned a party who offers lease which some can sign as lease
Holder for 99 years. Do lease owner have any liability like Condo owners?
Thank you



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Depends on the exact wording of the lease.

We own mobile home parks. We lease the pad to the mobile home owner month to month, from $350-$525 depending on location. That is VERY different from a 99 year prepaid lease like you might see in London (UK), Hongkong or Vancouver !!

What kind of lease is it ?


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Paresh

New Forum Member
Registered
Apr 22, 2012
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Edmonton
#5
In Downtown Edmontom, for apartment building built in 1978.
I think first time in Alberta.


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Paresh

New Forum Member
Registered
Apr 22, 2012
15
2
3
Edmonton
#7
Pay up front (Prepaid) 50,000C$. 99 years lease, single bed room or double bed (60,000$) prepaid appartment.
In Edmonton 124 st and 112 avenue.
Monthly fees:
Unit Regular Assessment :
MONTHLY : $385.00
Unit Property Tax Assessment:
MONTHLY:
$105.00
100$/Year HOA fees.
Biggested concern to me is building is 1978 built. I am not sure how it will be maintained and what is lease holder's financial scope in maintaining building. Is it treated same as any condominium? How does it works in case of mobile home park?
Much appreciate your adivce Thomas.
Thank you very much.
 

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ThomasBeyer

Senior Forum Member
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#10
Yes Thomas


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I assume you mean to say $110,000?

I’d say that this is not a good investment then as it is hard to impossible to finance and even harder to sell.

If you pay only $60,000 and plan a long term hold, say 20+ years and you can finance at least 50-65% of it at normal interest rates and rent is say $1000 or more, then, and only then, is it worth considering.