Cross lease risk
Question from Ryan updated on 25th July 2016:
We are looking at investing in a property on cross lease land. Do cross lease properties put buyers or potential tenants off when considering whether they want to live in or buy the property?
Our expert Kris Pedersen responded:
In my opinion - not really. For tenants it doesn't tend to be a major except for in situations like shared driveways. However, in most cases these tenants are living there because they can't afford (or don't want to pay the extra) to get the equivalent property which is completely stand alone.
It is a bit similar from a resale point of view too - except for the fact that you will get owners who want to have full control over the land. However, this again tends to come down to an affordability issue. In my experience in dealing with many purchasers and tenants, it hasn't been a huge reason why people haven't looked at properties to either rent or buy.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz