Freehold vs sectional title: The pros of each

Article summary

• Freehold and sectional title each have their pros and cons; it depends on your requirements.
• Sectional title offers increased security, a sense of community, and less responsibility for maintaining the property.
• Freehold means you can make alterations to the property without having to consult a body corporate, and you can rent out sections of the home.

Homebuyers have some important choices to make when looking for a property, and one of them is whether to buy in a sectional title or freehold. There are significant ramifications to each and you’ll want to be informed of the differences before deciding.

Freehold vs. sectional title: What does it mean?

Sectional title refers to the ownership of a unit that forms part of a group-owned complex or development.

Freehold refers to a property that stands on its own and doesn’t form part of any greater community.

Key differences:

• The owner manages a freehold title by themselves, while a sectional title is managed by a body corporate.
• The body corporate makes decisions regarding the complex, such as upgrading security or adding new recreational facilities.
• Sectional title owners have to pay levees that the body corporate uses for the management of the complex.
• <h2> Freehold or sectional title?

Here we examine the pros of each property type.

The pros of sectional title

• You don’t have to concern yourself with upkeep, such as mowing lawns or fixing pavements, as this is taken care of by staff hired by the body corporate.
• You don’t have to pay for your own home insurance.
• Sectional title complexes usually have advanced security in place to protect the whole complex.
• There is a greater sense of community due to the proximity of units to each other.
• There are usually communal facilities that everyone can make use of, such as a swimming pool and braai area.
• The superior security and communal areas make sectional title properties ideal for children.
• Sectional titles are ideal for a work-from-home lifestyle as they usually include expansive and safe outdoor areas, with convenient facilities close-at-hand.

The pros of freehold

• You make all decisions regarding the property and answer to no one.
• You can expand the property and make renovations that improve its value.
• You don’t have to pay any levees or service fees.
• You can keep pets, whereas, with a sectional title, you have to take into account whether the complex is pet-friendly.
• You can rent out sections of your home.

Conclusion

Ultimately it comes down to which property type is right for your situation, as each has pros and cons. More freedom versus more safety, more versus less responsibility, and so on.

Whichever property type you choose, you can improve your chances of home loan approval, and of getting a favourable home loan package, by applying to multiple banks, which you can do with ooba Home Loans.

We submit your application to multiple banks so you can compare deals and choose the best one.

We also offer a range of tools that can make the homebuying process easier.  Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.