12 March 2018

FREEHOLD VS LEASEHOLD PROPERTIES

FREEHOLD VS LEASEHOLD PROPERIES

As a newbie in real estate / property industry, I have zero knowledge about property. However, when people talk about property, the first thing I heard was always about freehold or leasehold. I'm wondering why this topic is crucial when comes to property. Whenever you're telling people that this property is freehold, audience was like oh that's great. On the other hand, when you're telling people that you will buy a leasehold property soon, for sure they will ask how many years remaining. So, what’s the real difference between of them?

Freehold
For what I know, freehold means when you purchase the property, you can own the land as well. You can own it until you passed away and pass it to my children, grandchildren or even grand grandchildren if you have. It is quite reasonable that most of the people will choose freehold rather than leasehold because they can own the property + land (if you bought landed property) for a long period.
However, please noted that government have the right to take back the land. Well, the case is very rare but there’s a possibility that we should aware.

Leasehold
Leasehold is a property that you own for a limit of period. Majority of the leasehold property in Malaysia is 99 years. After 99 years, government will take back the land and it depends on you whether you want to continue to stay at the property or move out. Of course, if you want then you need to pay.
Because of this kind of condition, most of the time, developer will sell them with cheaper price, provide more spacious, more facilities to attract and convince the customer to buy them. But we all know location is a very important factor to value the property. If your leasehold property is in strategic location, who knows, maybe your return on investment (ROI) will even higher than freehold property.

In conclusion, there are pros and cons on freehold and leasehold. At the end of the day, it is always depending on your decision. You need to understand what you really want. However, if you ask me, I would say freehold. Just my 2 cent. Bye.

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