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This post has been edited by 47100: Mar 28 2021, 11:32 PM

Lakefield Boleh ?

Is it feasible to buy commercial leasehold individual shoplot? From what i have checked with land office, the premium to renew is 75% of market value of the land as compared to the residential leasehold which is 25% of market value of the land. (as per guideline in Selangor State Government)

If we bought leasehold shoplot at RM2 mil now, Assuming after 30 years, the market value of shoplot is RM6 mil and the market value of land is RM3 mil (assume half of market value of the shoplot).

If we extend it for 30 years back to it original 99 years, the premium we need to pay is almost RM477k (calculated based on formula : 75% x RM3 mil / 99 years x 30 years [no of extension years] x 70% [assuming we have discount 30% if we made full payment in lump sum])

If we divide RM477,000 / 30 years, it gives premium of RM15,900 per year or RM1,325 per month.

Basically, if leasehold commercial land is appreciate more, the more premium we need to pay.

If my calculation is not correct, please do comments

This post has been edited by scongi: Apr 2 2024, 03:59 PM

Big hassle.

gomen policy could change; discount may not be available e.g umno regime.


This post has been edited by icemanfx: Apr 2 2024, 05:13 PM

leasehold does not matters for commercial . 15 years is more than enough to pay off the investment + interest. Rest is just pure profit the longer you can hold. If flipping also concern more if the bull comes or not. Resident is the opposite. After 15 years occupation, value at most holding inflation, let alone growth. Even bull comes also lags freehold when comes to margin.

I will think leasehold commercial will affect more our 2nd or 3th successor (let says after 60-70 years) as the lease may less than 30 years when the property transferred to them...There is big money to pay for the extension..

It also depends if you purchase the leasehold commercial, the pricing is really cheaper compare to surrounding freehold and also the location also an important...

Leasehold, if not mistaken, there are option that you do not need to pay premium now to extend the lease, only need to profit sharing with the state govt/local council upon selling.

As for leasehold commercial, if its decent location and generating rental profit stably, there are no need to sell it, hence leasehold, in most cases, make more sense for commercial rather then residential.

Residential is for ppl to live, you might want to sell it in 30/40 years due to the condition of the property....for commercial, no matter what the condition, if its at right place/right sizes, its always got demand.

Is true we dun need to sell it for leasehold commercial for decent location and good rental, just there is still a big money to pay to extend the lease when it expires...of course as what I say it only affect our 2nd or 3rd successor after 60-70 years..

Of course this is up to personal choice because some may not think too far as future is very hard to predict.....But based on current law and policy, there is disadvantage of leasehold commercial as compared with freehold commercial in long term

You missed my 1st paragraph. There are option to extend the lease without paying any $$, its by profit sharing with the govt when you sell the property.... Technically you do no need to outlay any$$ to extend the lease.

But of course the actual procedure might varies, and might have many restriction therefore this is just for education purposes lol

This post has been edited by Rinth: Apr 3 2024, 10:34 AM

Noted. Do you know how much profit sharing they offered?

Btw, I would think if we sell the leasehold commercial with short lease left, the market value wont be high as the buyer will factor in the extension premium and they must buy in cash as the bank won't finance leasehold less than 30 years. This will affect the selling price. Just my opinion.



This post has been edited by scongi: Apr 3 2024, 11:27 AM

Went to land office last year. I learned that it is possible to renew the lease at minimal fee but we cannot sell it, good for own stay. When you want to sell it after that then need to pay according to market price including the years that you enjoyed the minimal fee.

Also, sometimes land office have special promotion (lower rate..etc). The only problem is they don't advertise it.

From what I have checked they normally give 30% on the lump sum payment...It means also they offer instalment but I no sure as I didn't ask more details on how long the instalment...

This post has been edited by scongi: Apr 3 2024, 11:25 AM

leasehold selling is hard..

nowadays many new launching landed property also leasehold

If you comparing apple to apple, that means same location, of course FH always better than LH , but FH need to pay extra premium on top of the selling price, worth it or not is very subjective to different group of people.

If compare apple and orange , both different location is not about the FH and LH only , it will more to comparing the town planning, amenities, public transportation, and population etc.

Conclusion, LH property is not a monster, you can buy it after you done the study on this property.

Yes...most new launched landed and commercial in klang valley is leasehold... if we still want freehold landed and commercial, we can only look for subsale...On the pricing, the commercial is future price which is super crazy...

This post has been edited by scongi: Apr 3 2024, 04:33 PM

well you can argue about freehold > leasehold all day and at the end of the day you can't buy anything because you are waiting for the perfect freehold property. ]

Is true, is based on investor own analysis and strategy.... there is no right or wrong...

Demography change over decades. street or area popular or in demand now, may not be in 20 or 30 years time.

so called "profit sharing" also mean need to pay higher premium later.

The higher the rental, the higher premium for lease extension.