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Ch9 freehold and leasehold

K

Komal Gupta

Active Member
Here I do not understand "leasehold provides higher initial rental yield and capital loss if the lease is held till termination date."
 
Hi Komal,

The capital loss relates to the idea that at the end of the lease agreement, the leaseholder has no interest left in the property - it goes back to the freeholder, so a capital loss.

As such, the rental yield would be higher for a lease than a freehold, to allow for this.

Thanks
Aman
ActEd Tutor
 
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