What is a primary benefit of a leasehold estate for tenants?

A primary benefit of a leasehold estate for tenants is that it typically requires less financial investment than purchasing real estate outright. In a leasehold agreement, tenants pay rent for the right to use and occupy the property for a specified period, without the burden of upfront costs associated with purchasing property such as down payments, closing costs, and ongoing maintenance expenses that come with ownership.

This arrangement allows individuals or businesses to access housing or commercial space without making a long-term commitment to ownership, making it a more affordable option for many. The ability to invest less capital upfront can also provide tenants with greater flexibility and the opportunity to allocate their finances to other priorities or investments.

The other options present attributes that do not align with the characteristics of a leasehold estate. For instance, leasehold estates offer a defined duration of stay, usually stipulated in the lease agreement, contrary to the notion of unlimited duration. Tax exemptions would generally apply to property owners rather than tenants, and in a leasehold arrangement, tenants do not own the land, as ownership remains with the landlord or property owner.