If you’ve spent time researching or shopping for a lake home, you may have encountered homes that are listed as “leasehold” properties. And you might be wondering, “What does this mean?”
When purchasing property, we typically assume that total ownership is obtained once the transaction is finalized. However, this isn’t always the case, especially with lake homes and properties, where lots can be owned by government agencies or the Army Corps of Engineers.
Property ownership is mainly broken down into two categories: fee simple ownership and leasehold ownership contracts. Today, we’ll cover both types. We’ve also provided an infographic that breaks down the key differences between these models.
What is Fee Simple Ownership?
Simply put, fee simple ownership is absolute ownership of the property. Land and all structures on the property are owned by the property owner. This is the most common type of property ownership when it comes to residential real estate.
What is Leasehold Ownership?
In a leasehold ownership contract, the homeowner may own the home and structures on the land, but not the land or lake lot on which the home sits; therefore, the lake homeowner must pay rent, often referred to as ground rent.
Before you continue on your lake home buying journey, download this infographic to see how these two models could impact your lake home buying decision.
