What is Fee Simple and Lease Hold? What is the difference?

Fee Simple means that the owner of the real property has absolute ownership. A fee simple buyer acquires ownership of the entire property, including both the land and buildings. A leasehold interest is created when a fee simple landowner enters into an agreement or contract called a ground lease with a lessee. A lessee buys leasehold rights much as one buys fee simple rights; however, the leasehold interest differs from the fee simple interest in several important respects. The biggest difference is that the buyer of residential leasehold property does not own the land and must pay ground rent, as opposed to that the buyer of fee simple residential property does own the land.

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