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 Leasehold vs. Freehold - crossing point?

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mthc
post Jul 29 2016, 07:01 PM

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QUOTE(b00n @ Jul 29 2016, 06:49 PM)
An article wrote back in 2002 which still make sense subject to one willing to open up their mind.
http://www.hba.org.my/news/2002/1102/leasehold_fallacy.htm

To me personally FH vs LH is not really in my mind if I want to shop for a property. As we always say - location, location, location. But no one will entirely forgo the consideration of how many years left in the lease. No one of sane mind will not consider that.

If one gets to know the lease is only left with 10-20 years, or even 30-40 years; the next question to ask is, is the community already banding up to go for renewal of the lease.

Because most of the time we are only discussing about new project where most likely the lease is still fairly new - maybe 10 years into the entire tenure perhaps; so don't really care about whether it is lease of free.
To answer TS queries; if you want, you can go and try find out why for the different B/U - prices are similar. Who are the developers? Any difference in amenities etc...
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I attended the national land code classes as it's mandatory for my work purposes and it opened up my thoughts to FH vs LH. I was a FH supporter until that 2 months class opened up my view to LH too. But then again many here think they are all that. An investor doesn't care if it's FH or LH as long as that prop makes money. 99 years lease and the fella thinks he can live so long to bring his prop to grave with him. Seriously big time joker.

This post has been edited by mthc: Jul 29 2016, 07:02 PM
b00n
post Jul 29 2016, 07:05 PM

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QUOTE(mthc @ Jul 29 2016, 07:01 PM)
I attended the national land code classes as it's mandatory for my work purposes and it opened up my thoughts to FH vs LH. I was a FH supporter until that 2 months class opened up my view to LH too. But then again many here think they are all that. An investor doesn't care if it's FH or LH as long as that prop makes money. 99 years lease and the fella thinks he can live so long to bring his prop to grave with him. Seriously big time joker.
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The counter argument is if the Lease is left with short tenor like my example.
Cabinda
post Jul 29 2016, 07:11 PM

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QUOTE(b00n @ Jul 29 2016, 07:05 PM)
The counter argument is if the Lease is left with short tenor like my example.
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In LH term how low is consider low? And what is the minimum low to easily discard? 35/40yrs of least balance? Are there any property which having 35/40 lease and are selling like half of their purchase price?
SUSempatTan
post Jul 29 2016, 07:23 PM

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QUOTE(CK15 @ Jul 29 2016, 06:15 PM)
Just share my friend's view.
By end of the day. V all just need 2'×6' land. The value to properties are meaningless. Kids should be thankful if v left something for them. The kids should earn themself. V don't own anything for them.
I buy the idea.
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This I agree. Our responsibility ends when we hv imparted enough moral, spiritual &, yes, monetary "assets" to our kids for them to continue on their own. This strengthens d race as well. Spoonfeeding leads to destruction.
mthc
post Jul 29 2016, 07:26 PM

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QUOTE(Cabinda @ Jul 29 2016, 07:11 PM)
In LH term how low is consider low? And what is the minimum low to easily discard? 35/40yrs of least balance? Are there any property which having 35/40 lease and are selling like half of their purchase price?
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If you see 35 to 40 years remaining lease for residential theb you go buy lor. A smart investor will usually dispose theirs around 80 to 85 years lease remaining.
Ero-Sennin
post Jul 29 2016, 07:56 PM

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QUOTE(CK15 @ Jul 29 2016, 06:15 PM)
Just share my friend's view.
By end of the day. V all just need 2'×6' land. The value to properties are meaningless. Kids should be thankful if v left something for them. The kids should earn themself. V don't own anything for them.
I buy the idea.
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Agree.
Jagalat
post Jul 29 2016, 08:04 PM

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QUOTE(b00n @ Jul 29 2016, 07:56 PM)
Whether there are any precedence or not, am not sure. However when the law provides the avenue; you cannot say it will never happen.
Quoted from the below source which also contains the logical diff/pros and cons of FH vs LH
http://realproperty.my/freehold-vs-leasehold-properties
Article published by a solicitor firm on "Compulsory Land Acquisition in Malaysia, Compensation and Disputes"
Basically highlights the law does allow acquisition of Free Hold property by the government.
http://www.mahwengkwai.com/compulsory-land...ation-disputes/
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From all the text, there is no indication it never happened. On contrary, to go one step further, it is best to identify the pattern or trend of the acquired freehold properties.


CK15
post Jul 29 2016, 08:09 PM

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QUOTE(aspartame @ Jul 29 2016, 06:47 PM)
Don't talk about the kids first. Talk about ourselves. Even if you do not plan to leave anything for the kids, isn't it better if the property is freehold and the value appreciates instead of going to zero. You never know. You might not want to stay there forever. With freehold properties, you can sell and move anywhere else you like. With leasehold, you can also sell but no value. Which is better? I prefer preservation of capital.
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Hahaha... u have points. I respect ur view.

But in real life, both FH and LH can make money. Just the knowledge and skills make the different.

CK15
post Jul 29 2016, 08:24 PM

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QUOTE(mthc @ Jul 29 2016, 07:26 PM)
If you see 35 to 40 years remaining lease for residential theb you go buy lor. A smart investor will usually dispose theirs around 80 to 85 years lease remaining.
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Nothing wrong to buy property with remaining 35-40 yrs leased. Some gems out there. Only smart investor knows how to spot it and grap it.
mthc
post Jul 29 2016, 10:42 PM

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QUOTE(CK15 @ Jul 29 2016, 08:24 PM)
Nothing wrong to buy property with remaining 35-40 yrs leased. Some gems out there. Only smart investor knows how to spot it and grap it.
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Wah sifu
TS3sixty
post Jul 29 2016, 11:48 PM

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Wow, didnt expect such a big discussion. Hold on - will try to do a mass reply to all those who asked questions
TS3sixty
post Jul 29 2016, 11:51 PM

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QUOTE(kengyan @ Jul 29 2016, 08:24 AM)
Leasehold property especially nearby got freehold properties don't have advantage all the time.
10 years ago when I bought my first house also I die die said I will stay there till I die. After 10 years, I'm forced to sell the house as I have neighbor that always give problem. Buying new property for own stay the bad part is you won't know your neighbor until you move in.
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Its same anywhere - you buy, the neighbour might move out and a new one comes in who is bad. So this isnt really a consideration for me

QUOTE(CK15 @ Jul 29 2016, 08:42 AM)
You will have problem to get prospect buyer for leased expire less than 40 yrs. Bank may not give loan. Cash buyer will think twice b4 place the booking.
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Its 99 yr lease, and we plan to leave way before 40 yrs left

QUOTE(AskarPerang @ Jul 29 2016, 09:39 AM)
Same price, same location. Freehold anytime.
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Same price, same location but not same size - thats why I ask the question. Does the bigger space make people move towards the LH

QUOTE(BEANCOUNTER @ Jul 29 2016, 09:54 AM)
If this is a newly built condo...rest assure that the lease wont be 99 yrs...it will be 99 yrs minus the building time.

Lishold property in general is 20% cheaper than fh...u can tell by the lower psf.

In a place where there are fh and lh...lh will loose out...

But for condo projects...fh or lh makes little impact bcos after 70/80 yrs the condo will be condamned anywhere...but if u intend to sell with lease period of 80odds years...its still doable and make sure the location is 'wong enuf'.
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Confirmed 99 year lease as its currently 74years and they will give strata title for 99 years (submitted already) and confirmed with department

QUOTE(klangvalleyrookie @ Jul 29 2016, 11:06 AM)
Chill, Guys. Let's put things back into perspective. This is not a LH vs FH discussion to begin with. TS already said both properties at the same location & same price. The key difference is 1 bigger BU (LH) vs 1 smaller BU (FH).

Two key questions are:
1) At what point, in your guys opinion, is the crossing point where it makes leasehold more worth it?
2) Does the cheaper RM/sqft and bigger space make it worthwhile to go for leasehold with all the problems it has?

TS, the properties that u mentioned r landed or high rise?
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Both high rise
TS3sixty
post Jul 29 2016, 11:54 PM

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QUOTE(wkkor @ Jul 29 2016, 11:47 AM)
Actually this question is very subjective... is that 500sf mean to you? Do LH 27% cheaper mean good deal to you vs FH?

Or you may need to do some research, find those area nearby have FH + LH and compare their selling price whether the $/sf different is more than 27%
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500 square feet is not huge, but in context its a 33% increase. I'm a Quantity Surveyor by background and now work in an accounting firm - so I do these kind of benchmarks out of habit wink.gif

QUOTE(cherroy @ Jul 29 2016, 03:37 PM)
The prime consideration is the property itself especially for own stay one.

Get the one better in term of quality, how it is maintained, and make your living life comfortable one, which is invaluable in term monetory.

LH or FH is a secondary issue.

Even 2 properties are adjacent, it can be maintained differently, which determine the value of property especially for highrise whereby the key issue of its value not come from LH or FH, but how it is maintained in a top notch condition.
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Good point, and agreed to some extent


QUOTE(empatTan @ Jul 29 2016, 03:53 PM)
Actually, what's d problem with LH, really?! If lease is up, just renew it. In pj, that costs only $1000 for another 99 years.
A good property is a good property. LH, FH, wateva hold don't really matter. What matters is how much money are people willing to pay for it. All else can b negotiated.
(If malay rizab land, above comments is void smile.gif
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Because msot people don't think like that. Like 75% of people I speak to (and a few on here) all only want freehold. So when I come to sell in 10 years time, do I have a demand for my condo? Has the price not inflated in the same level as the others around? So I have to sell at a lower price, to a lesser demand market and have to negotiate even further.

Thats my question, does the extra space make up for these problems....
aspartame
post Jul 30 2016, 12:13 AM

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QUOTE(empatTan @ Jul 29 2016, 03:53 PM)
Actually, what's d problem with LH, really?! If lease is up, just renew it. In pj, that costs only $1000 for another 99 years.
A good property is a good property. LH, FH, wateva hold don't really matter. What matters is how much money are people willing to pay for it. All else can b negotiated.
(If malay rizab land, above comments is void smile.gif
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Renew the lease at RM1,000 but cannot sell. Only can stay there.
SUSbf1119
post Jul 30 2016, 12:26 AM

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so what is the conclusion ? 😆😆😆😆😆😆😆🐴😂😂😂😂😂
TS3sixty
post Jul 30 2016, 12:27 AM

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QUOTE(wkkor @ Jul 29 2016, 04:40 PM)
Perhaps just let your wife to choose... so in future she don't "mengamuk"... lol...
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Agree with this - thats why I am asking. She is against LH, but I look at RM/sqft and can't understand why she want to pay same price for less space....
TS3sixty
post Jul 30 2016, 12:28 AM

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QUOTE(bf1119 @ Jul 30 2016, 12:26 AM)
so what is the conclusion ? 😆😆😆😆😆😆😆🐴😂😂😂😂😂
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Conclusion is as the person above said... in end I am sure wife will choose. What say do I have? I am only paying the deposit and monthly payments... tongue.gif
BEANCOUNTER
post Jul 30 2016, 12:30 AM

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QUOTE(3sixty @ Jul 29 2016, 11:54 PM)

Thats my question, does the extra space make up for these problems....
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500sq is not a large space for naked eyes to feel. It ccould be just an extra bedroom or larger balcony a bit bigger in living and kitchen.

After 10yrs...the maintenance of building and access play more important part.

Beside with lease of 90yrs or sloght lower wont do any harm to fh or lh.

Thats why o said earlier if die die must buy lh..make sure there is demand in that area and the area is poised to be "ong".

Thats why i am against lh property in si beh far places bcos it takes times to develope.
BEANCOUNTER
post Jul 30 2016, 12:32 AM

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QUOTE(3sixty @ Jul 30 2016, 12:27 AM)
Agree with this - thats why I am asking. She is against LH, but I look at RM/sqft and can't understand why she want to pay same price for less space....
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Listen to wifey will get u fart dart...
Jagalat
post Jul 30 2016, 12:34 AM

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What if TS spells the project names then more feedback will be expected...lol...

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