i always wanted a freehold landed property. maybe influence by my mum. lease hold makes me feel i dun "own" it

got one low cost free hold apartment that i rent it and my own home which is lease hold...reading in this topic makes me feel i dont actually own my own home

everybody knows freehold is better. but looking at the budget ,environment, devloper and location issue, not much selection we have. for me,leasehold ok provided with strategic location and move to bigger house within 20yrs. (so i need to work very hard to earn more $$$$$) *blek*. yes resell value would be lower than freehold but still, landed property u will earn 1.. strategic location mah..

those FH too expensive and location not good,it will be so sad everyday i was like driving out from a outskirt area to town.

leasehold after 99 yrs renewal cost like re-purchase the value of the land? --sad, sorry to grandchild. haha unless i got another FH on hand.

The question is given that freehold cost 40% more in the same area, is buying a freehold better?

In penang a leasehold apartment cost RM230/sf while the freehold cost around RM330/sf which is around 40% more expensive. The extra cost can come up to 200K which means if I were to take a 25 year old loan with a 6-6.75% interest rate, at the end of the 25 years I would have paid an extra 400-500K?

Whether it's worth it or not is up to you, but the calculation behind it is not as simple as " freehold is better because I own it forever". You have to do a calculation on market price differences as well as locatioin.

This post has been edited by Drian: Feb 19 2008, 05:53 PM

Excellent point, Drian

I'd also like to add up that even if the freehold property cost 25%-40% more, both LH and FH properties with similar features within the same vicinity will command similar rental. Therefore, FREEHOLD is NOT always better

This is very true. It's calculated from the day the developer bought the land and not the day the property is completed. I heard you need to pay a couple hundreds of ringgit to renew the lease period. How much it takes to extend 10 years for example?

for me freehold or leasehold doesnt matter. so long as there are more than 85 years left on the lease, i will buy a property for its other qualities.

Just compare Kota Damansara - Tropicana area (leasehold) to say Bkt Jelutung(Freehold) or Damansara Jaya(Freehold). See how much prices have appreciated in commercial and residential in leasehold area cp to freehold. Leased hold shophouses gone up how many folds. Old buildings though freehold in not so strategic location appreciation still slower.

For condos, even freehold so what, aft 50 yrs condition, design all outdated cant expect price to rise. Landed property at least can tear down and rebuild. Main thing is good maintenance and management team important for condos. Not forgeting rental return to give you health cash flow. If buy for own stay you still have an option to rent out. Buying freehold hoping for capital appreciation but if rental incoming cannot cover loan so end up back to square one. As such location is important. Freehold/leasehold secondary.

Does anyone know how much to pay in order to extend the lease period? Is it possible to convert from leasehold to freehold? What are the procedures like?

I know recently Land Office approved a lease year extension application, the residential property location is in KL. the developer applied 13 years of extension, the land area is approx. 7500 sq metre, premium need to paid is about RM 25 per sq metre.

Total premium: RM 25 x 7500 = RM 187,500

therefore, it's about RM 14,423 per year, derived from RM 187,500/13 years.


If u r looking for strata title property, FH and LH are not a too critical issue, because when the land tenure is about to end, government will issue a notice to the property management (pm) to pay the premium for the extension of the leasing. So, the pm will utilise the sinking fund to pay for it.

Basically u can't convert a leasehold land to freehold land, except for some special cases.

Putting emotion & feeling aside, freehold or leasehold doesnt matter in certain part of the town. Wouldnt live more than 99 yrs away, so what's the concern? As long as within this period the said property can generate so much projected return to your investment, that's good enough. No emotion attach.

In condo, say 50 yrs down the road unless you are hoping for en-bloc sale like in Spore (many lucky overnight millionaires in old condos last yr), old condo generally wouldnt appreciate too much compare to newer ones. As such leasehold/freehold doesnt make much difference.

I heard the cost to extend the lease period is borne by developers but some borne by say owners (tenants). How can we determine who should pay for the cost of it?

I don't want my son to say my stupid father get a leasehold properties how stupid is him, no i have no house to stay cos is been 99years..

Don't worry. After 99 years:

- You might not live that long to be able to hear your son calling you stupid
- if you still alive by then, its "highly" unlikely to have a son , whom at 60yrs or even older, to UNABLE to secure his own property to live in, and have to blame his 100++ years old dad for that, unless he's senile of course.

This post has been edited by alanyuppie: Apr 29 2009, 05:14 PM

I don'want him to curse me when i am in heaven. Ha ha ha ha

In my opinion, i suggested that if u wont sell the house, u can but a leasehold property.
If u selling a leasehold property, u will lose a lot when ur property just less than 40 years...

i agree with pai.
in malaysian law, the concept is simple.
all land is owned by sultan.
when he or the government want to take it back, they will, no matter freehold or leasehold.
it is just, in the law stating that they will conpensate you with an amount they think sufficient.
according to law, it will be based on the land condition before taken, not according to the condition it will be.
if the land is semenyih.. a rural area, suddenly they want to develop a second putrajaya there, the compensation is based on price as semenyih. not as the second putrajaya.

base on my little research, here's the understanding/finding of LH:
1) review (by authority) happen at year 60, 30 & 0
2) authority have right to take your land without ur consent, they will then compensate according to market value
3) you may start to apply for renewal once it touch 30 years or below, however renewal will definitely incurr land premium


disclaimer:
a) regarding either the market value or land premium, they alwayz have a veto said on the so call "decent value"
b) LOW market value & HIGH land premium is alwayz the case observed

Sorry I wish I can be more helpful but i am also a rookie in property ...anyway i got to know this website and it is pinned as well in LYN...maybe you would like to take a look and see if it can help...


http://www.real-estate-investment-explained.com/

Leasehold may be fine if you're an investor or something, dealing in buying and selling property. But for normal people, for me it doesn't make sense. If you buy a house might as well get someting permanent so at least your kids get to inherit something worthwhile, from what I see, the price for leasehold and freehold not much difference.