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Property educational articles

Freehold VS Leasehold

7/1/2019

1 Comment

 
"Freehold is definitely GOOD and Leasehold no need to consider"

It quite norm that elder generation property buyer frequently preferred "Freehold good, Leasehold bad."

This have been quite a debate for many years, is Freehold the main concern and the must factor to be considered?

Here, whether a piece of property is freehold or leasehold may or may not matter depends on why you’re buying the property for.
Picture
Freehold vs Leasehold: The Fundamentals

Freehold means that you have the ownership of that property forever, and you can pass it on to whoever you want. 

On the other hand, if your property is leasehold, the tenure is limited – usually by (the maximum) 99 years if you bought your property from the developer, and much less unless you’re getting an extension.

​For the lease is approaching the end or owner want to get extension of lease, the owner will need to apply to the state government for an extension of the lease. If the application is approved, a premium is payable depending on the prevailing market value of the land.
Capital Appreciation
​
There have been argument that leasehold properties capital appreciation is must lesser than freehold properties. 

Actually, there’s evidence that values of both freehold and leasehold properties appreciate at a similar rate for the first 20+ years.

However, nearing the end of its tenure, the value of a piece of leasehold property predictably stops going up. In this respect, freehold properties win in the longer run, as far as value appreciation is concerned.

Additionally, older leasehold properties are also harder to sell because of the uncertainty in the renewal of the lease (which is under complete discretion of the local authorities).

Also, bank loans are harder to come by for leasehold properties with shorter tenures. Even if you manage to get a loan, the margin of financing may be comparatively lower to that of freehold properties.

​As with everything else, prices of property are determined by the sacrosanct law of supply and demand, and if freehold properties are more popular, naturally, they will fetch higher prices, both in the short run and the long run.
Leasehold Properties

​Location remains the biggest driver of demand in real estate, and you’ll see that some of the best locations in the Klang Valley are leasehold – for example: Bandar Sunway, (large swathes of) Petaling Jaya old town, Tropicana (near the golf course) and the Seputeh area in KL.

There is no doubt that the freehold status is a strong selling point for new projects. As such, developers understand the need to “make up” for the leasehold status of a new project that they want to launch. Therefore, for new projects at least, leasehold properties often give a better bang for the buck in terms of features, design, and concept when compared to freehold properties.

Finally, understand that freehold properties are limited in availability, and so the question of freehold vs leasehold will most probably be moot sometime in the future – simply because the buyers won’t get much of a choice. Actually as long as the whole area is same tenure leasehold, that shall not be an issue, unless the property you looking is the only limited leasehold in the freehold area, then that will be disadvantage on investment point of view. 
So in the end, does it matter whether its Leasehold or Freehold?

If there is a comparison within same area, you should always opt for properties with freehold status. However, whether a property is freehold and leasehold should be secondary compared to other factors like different location, developer reputation, concept, amenities and upside opportunity.

Now with the price of houses being the biggest concern especially among first-time buyers, it’s a question of whether a piece of property is affordable and worthy, tenure like freehold or leasehold is no longer the main concern. 

Also, freehold properties now is getting lesser and lesser. For developer properties, the sales package also take into the consideration as some giving more rebates and cash back. Some Guru have been teaching on multiple submission and cash out ideas which affect buyers view on the properties. 
​
1 Comment
custom essay writing uk link
5/11/2020 09:57:23 am

Freehold and Leasehold are two different things and we can see the differences as we finish reading the blog. It is a good hobby to read informative posts that will help us to have some additional knowledge. A knowledge that this will give us the tips that we need and we will not be ignored anymore. Let us remember that it is better to have some knowledge, it will be an armor in this generation. Let us invest in our knowledge and always try to look at different perspectives.

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  • Home
  • New Property Launch
    • Best Investment 2022 PJ Damansara Low Risk Low Entry Price High ROI
    • 2022 PJ Rumah Mampu Milik RM270k Damansara
    • Bangsar South 2 Rooms from RM390k BELOW Market Price
    • 10% ROI PJ Project near Ikea and One Utama Mall
    • Mid Valley Seputeh New Launch
    • Pavilion Damansara Heights 柏威年 白沙罗岭 马来西亚 吉隆坡 精选楼盘
    • 马来西亚RM300千的PJ屋子-首购族,年轻人月入3千能买房
    • 2021 Penang Most Awaited Project
    • 2021 New Launch - KL Metropolis
    • 2021 PJ Spacious and Affordable 5 Star Condo
    • Freehold LRT Linked 3 Room Suites in Glenmarie
    • New SPACIOUS Kepong Landed 6 Room 6 Bath
    • Bangsar Last Piece Land New Launch
    • Avara Seputeh (Mid Valley)
    • Project Announcement Registration. Malaysia New Property Launch
  • Existing & Past Project
    • 2020 Lowest Risk & Price in Klang Valley with Great ROI
    • Kiara East Suite Dex
    • 2019 SAFEST PROFITABLE HIGH CASHBACK INVESTMENT
    • Best Property Investment Projects in 2018
    • KL City Freehold Spacious Affordable 3 room Project
    • Jalan Kuching Freehold New Office & Shoplot
    • Jalan Ipoh New Freehold Shoplot & Offices
    • RM300k KL Sentral New Prelaunch
    • The Olive Condo, Sunsuria City
    • Prelaunch Landed House Bukit Rahman Putra
    • RM260k No Downpayment Puchong South Suites
    • PJ North RM400k High Cash Back Project
    • Denai Sutera @ Alam Sutera, Bukit Jalil
    • First Phase of Banting New Township
    • Neu Suites 3rdNVenue @ Embassy Row by Titijaya & CREC
    • COURT 28, Jalan Ipoh KL City New Property Launch Service Apartment. Malaysia New Property Launch
    • Semanja Kajang New FREEHOLD Kajang Double Storey Houses. Malaysia New Property Launch
    • M Suite @ Desa Park North
    • BIJI LIVING @ Sek 17 PJ City by Conlay. Malaysia New Property Launch
    • Amani Residence Bandar Puteri Puchong New Freehold Service Apartment. Malaysia New Property Launch
    • SFERA RESIDENCY @ Puchong South. Malaysia New Property Launch
    • KL North Last Release
    • PreLaunch Freehold Double Storey
  • LAND
  • News & Articles
    • Educational Articles
    • Ho Chin Soon Greater KL Map Sharing
  • Other Reference Link & Services
    • Land Sale Malaysia
    • Malaysia New Property Launch
    • Lets Buy Property Malaysia
    • Other Professional Services
  • Referral
  • Career
  • MPIG
    • About Us
    • Contact Us
  • Get Professional Advice
  • PJ八打灵2021全新地产项目分析手册