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 Leasehold vs. Freehold - crossing point?

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TS3sixty
post Jul 29 2016, 07:46 AM, updated 10y ago

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Hi all

I have been offered an option for two properties:

1) Freehold, 4 bedroom, 1800sqft
2) Leasehold (99 years remaining), 4 bedroom, 2300sqft

Both are the same price, both in the same location (around 2min drive between them), similar facilities but option 2 is 1 year older (both are new and completed this year and last year)

At what point, in your guys opinion, is the crossing point where it makes leasehold more worth it?

I have always been against leasehold and opt for freehold, because of the sale price in future and also because the demand will be a lot lower when I come to sell.

This is for own stay, not for investment and I expect to stay there around 5-10 years

My question is that the RM/sqft for the Leasehold is a lot lower and the space is a lot bigger for the same price, but the downside is it is leasehold. Does the cheaper RM/sqft and bigger space make it worthwhile to go for leasehold with all the problems it has?
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....
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
TS3sixty
post Jul 30 2016, 08:27 AM

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I won't give away the names as a) unfair to owner and b) you might steal the condo away from me biggrin.gif

I can say both are high rise, low/medium density in Kuchai Lama and Taman Desa area
TS3sixty
post Jul 30 2016, 11:38 PM

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QUOTE(empatTan @ Jul 30 2016, 08:38 AM)
Tmn Desa.
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This is a question or a statement? Without considering anything else just pick Tmn Desa?

QUOTE(Jagalat @ Jul 30 2016, 09:37 AM)
Since TS mentioned about wife factor, perhaps some of the potential scenarios to assess in future ...

S1) Bought LH, if there is any unplesent neighbors / neighborhood activities / property matter happens in future, will she complain "l have already told you not to buy this property. We would have been better if staying at the FH one"?
Weightage is higher if she contributes to the purchase.

S2) Bought FH, if there is any unplesent neighbors / neighborhood activities / property matter happens in future, you reserve the right to turn the table and say "We would have been better if staying at the LH one". (You have the future arguement advantage)
She has to keep silent about this argument.
Human side to consider, wife in general, will consider sense of secured(price appreciation) and a purchase worth every ringgit spent for family.
(Not promoting/hinting anything but spend some time to discuss with her)

P/S..no show her this post.
If l were you, I will choose the FH... tongue.gif
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I thought this statements were from a very wise person... then i read this:
She has to keep silent about this argument.

Every husband know this is literally impossible wink.gif



QUOTE(BEANCOUNTER @ Jul 30 2016, 01:58 PM)
wife will always find something else to nag, if not about properties.

Wan4..its not about renewal of lease. I dun think anyone here will live til renewal of lease...be it at the end of 99 yrs or 20 years left.
its more to do with ease of selling should one moves forward in life and the perception of lishold over freehold. End of day, perception of human win over the actual laws itself bcos you cant educate your potential buyers.
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This is a great reply and is the exact reason I ask the question. I can't see any issue with LH, but people like my wife (and others on here) do - so it affects my decision as I worry abotu re-sale in 5-10 years
TS3sixty
post Jul 31 2016, 05:42 PM

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QUOTE(oxm8 @ Jul 31 2016, 09:13 AM)
Again it become FH camp vs LH camp.
still waiting for TS to give more info....
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What additional info do you need?

 

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