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> Freehold VS Leasehold, Gain VS Loss?

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edyek
post Dec 1 2009, 02:02 PM

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QUOTE(TarePanda @ Nov 23 2009, 04:57 PM)
As title stated,

My friend going to buy a leasehold property in Puchong and budget is >RM 380k.

What my friend said about leasehold:

1.) Cheaper and up to his budget/installment
2.) Leasehold up to 99 years...definitely sufficient

What I said abt leasehold:

1.) Value will drop >10%~20% (min) after 20 years
2.) The leasehold property was bought by some investor seeking for instant money...value is inflated at least Rm 50k

My thought:

1.) Why not scratch the installment period longer and opt for freehold property?
   
      Problem is:

      The interest definitely become heavier but at the same time will the freehold property off set against the impairment of the leasehold land?
Really need need advice from property guru...please advice
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In my state Sarawak, there is no more freehold land/property in Sarawak. So the value for the land/property does not drop 10% or 20% after 20 years but increase. Normally Local government will renew expired title. So this matter does not really concerns Sarawakian nor Sabahan.
edyek
post Dec 1 2009, 05:27 PM

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QUOTE(cic.lemur @ Dec 1 2009, 03:32 PM)
Wow, that's a bit extreme. There should be no problem rural areas being freehold, but imo areas near urban should only be leasehold, otherwise there will be unsightly buildings here and there, like in Brickfields area.
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Haha. That is what happens to Sarawak. And the People of Sarawak are voicing out their dissatisfaction over this matter.



QUOTE(dannywcw @ Dec 1 2009, 03:35 PM)
whats going to happened after 99 years? owner take back land or burn?
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After 99 years, the lease will expired. All you have to do is take your land title and go to Land & Survey department to renew your title by paying a premium. If your land is a bit rural area, and it happens that the government wants to take the land and turn into something for their own use, they will not renew your title or they will opt to buy back your land according to their value.

This is the bad side of leasehold.

This post has been edited by edyek: Dec 1 2009, 05:27 PM
edyek
post Dec 1 2009, 05:45 PM

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QUOTE(cheahcw2003 @ Dec 1 2009, 05:36 PM)
if given a choice, freehold is better than leasehold. But freehold property is getting lesser nowadays.
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Yes, it would be. Most of the freehold property are approved from the British era, and it also totally depends on the local state government whether or not to approved the freehold.

Actually 999 years of leasehold is the same at freehold. You can pass the property to God knows how many descendants you have.

This post has been edited by edyek: Dec 1 2009, 05:46 PM
edyek
post Feb 24 2010, 03:24 PM

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QUOTE(lokideangelus @ Feb 24 2010, 02:28 PM)
is it possible to get an extension from the land office on that ? ie renewable back to 99 years ?
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Yes. It is renewable in Sabah & Sarawak. Sarawak is only renewable below 5 years. Sabah is below 10 years.


Added on February 24, 2010, 3:32 pm
QUOTE(Goneraz @ Feb 24 2010, 02:24 PM)
I think everyone is missing the big picture here.. Its not wether we are gonna utilise the property for 99 yrs or not.. Its wether you can sell the property after say half of the lease.. I wanted to purchase a pre-owned leasehold property and i hit a snag. The house was beautifully renovated and the price was very reasonable.. Problem was the property is 40 yrs old and there is only 59 yrs left on the lease. No banks was willing to finance the property. They only wanna loan for a period of 12 yrs and that make my repayment incredibly ridiculous.
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My partners and I just bought an old shop lot in town centre which left only 17 years. Since the shoplot is almost expired, we have a real bargain. 40% below market valuation price. Thats the pro of it.

Yes, we need a lot of cash for the initial down payment, and thats the con of it.

We go to land survey department to ask them to write a letter to confirm that they will renew us the said property, and we bring along this letter to the bank to have our property finance. Although the banker only finance us 60% of it, but it is still better than nothing.

This post has been edited by edyek: Feb 24 2010, 03:32 PM
edyek
post Feb 26 2010, 11:27 AM

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QUOTE(lokideangelus @ Feb 24 2010, 03:36 PM)
so what happens if you cant get the extension here in semenanjung?

can i do the same as " We go to land survey department to ask them to write a letter to confirm that they will renew us the said property, and we bring along this letter to the bank to have our property finance." ?
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Normally they will extend your lease. Unless there is a planning in government department that they will take over the place to develop into something else? (normally happens to kampung or very old shoplot). Then they will pay you what they think if your shop worth.

I'm not sure if this method works in west malaysia. You can try to go in to L&S to ask the procedure of your lease extension.

 

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