A Guide To Freehold Estates: Different Types And How They Work

If you’re a seasoned home buyer, then you know what goes into purchasing real estate. But real estate is a complex landscape. The type of property you choose to purchase depends on your unique needs as a buyer.

Whether you’re looking to purchase a home as your primary residence, start your side hustle as a landlord or expand your portfolio of real estate investments, you will likely come across a type of real property called a freehold estate. These properties come with no fixed ownership timeline, which you can pass on indefinitely.

Let’s take a look at the definition of a freehold estate and how this type of property works. Then, we’ll get into the different types of freehold estate arrangements and their unique characteristics.

What Is A Freehold Estate?

When you own a freehold estate, you have exclusive rights to the property for an undefined length of time. It comes with indefinite ownership, which you can essentially pass on to your heirs or beneficiaries forever. There are three types of freehold estates out there: fee simple absolute, fee simple defeasible and life estate.

They represent an immovable asset in the real estate industry that you hold interest in. Each type of real property fits into a classification of ownership that determines what you can do with that asset.