Freehold vs Leasehold

The bolded and centrally-placed words of “FREEHOLD” is commonly seen on everything from billboards and brochures to website banners promoting new developments. But why do developers think it’s so important that you know the property they are selling is freehold? Why do people scramble to get their hands on freehold properties?

Well that’s because one of the first things we learn about property is to only buy freehold. We’ve heard the same advice from others ranging from your parents to co-workers, real estate negotiators to bank officers or even read articles online about how important it is to buy freehold. With so much emphasis paced on this status, the idea that freehold tenure is an essential trait for a property worthy of our hard-earned money is truly reinforced.

Understanding Freehold and Leasehold Tenure

Freehold

In simple terms, freehold tenure is where you have the right to ownership of a property until the end of time. This means that you could pass on the property to your children or anyone else after your death and they can pass it on to their children, and then their children, followed by their children or whoever they choose and then their… you get the point.

Leasehold

Leasehold on the other hand, means that technically, you are not the owner of a property/land. You are merely leasing it for an amount of time (in Malaysia, it is commonly the maximum of 99 years when the property is new). That amount of time could also be less if you buy a pre-owned property (e.g.: 20 years ago, the tenure for a property was 99 years, when you buy it this year, you are left with 79 years).

When you reach the end of the tenure, an application to extend the lease will then have to be submitted to the state government, where if approved, you will have to pay a fee (based on the market value of that property/land at the time).

Five Common Assumptions About Freehold and Leasehold Property/Land

But is it a fact that freehold property/land are more worth buying? Or is it just a myth conjured from assumptions or optimistic ideals?

Take a look at some of the common assumptions about freehold and leasehold properties and sift out the fact from fiction.

1. You own a freehold property/land forever

Status: Denied (kind of)

Though perpetual ownership is entitled to freehold land/property owners, the fact is that ALL freehold lands/properties are subject to the Land Acquisition Act 1960, which gives the government the right to acquire them if deemed necessary (as seen in the case of land acquisition for the MRT project here).

The owner will then be compensated an amount depending on the market value of the land/property. So NO, freehold does not equal guaranteed ownership forever.

2. Freehold properties/lands are higher in value than those of leasehold

Status: Plausible

Not all leasehold properties/lands will be cheaper than freehold ones. Other factors such as location, property type, built-up area etc. will have to be taken into account. However, if 2 properties, one leasehold and the other freehold are similar in every single aspect, the leasehold one will typically be priced 20% lower than the other freehold property.

Apart from that, the price of properties are also affected by the principle of supply and demand. Hence, if freehold properties are more in demand by buyers, it is without question that their value will be higher, be it in the short or long term.

So there’s no saying that leasehold properties will definitely be cheaper than freehold ones in price.

3. Freehold property/land enjoys better appreciation over time

Status: Confirmed

Although there have been accounts evidencing that both freehold and leasehold properties/lands experience appreciation at comparable rates, this is only applicable for the first 20 to 30 years of the leasehold tenure. After that, the value of those leasehold properties/lands remain stagnant before deteriorating as the end of the tenure inches closer.

For that reason, freehold properties are a better bet if you’re looking for a property which can appreciate or remain in value over the long run.

4. Financing for freehold property/land is easier to obtain than leasehold ones

Status: Confirmed

Banks are less than willing to finance buyers who want to purchase leasehold properties, more so those with few years (even decades) left on their tenure. But if you do mange to secure a bank loan for a leasehold property, the loan amount can be significantly lower than the maximum 90% margin of financing.

5. Leasehold properties are harder to sell

Status: Confirmed

Leasehold properties, especially those which are older and are nearing the end of their tenure, are harder to sell. This is due to the fact that the renewal of the lease is uncertain, where its extension is determined solely by the local authorities. Hence, not too many buyers are keen to take the risk of buying a leasehold property and not be able to renew the lease- few potential buyers equals harder sale.

The Verdict: Buy Freehold When You Can

Given that all other aspects of property type, size, location, facilities etc. are equal, it is always better to opt for those which are freehold.

Leasehold Properties Come With Their Perks

Freehold status is a highly attractive feature for new developments. With that, developers see the need to make leasehold projects more attractive to buyers. Hence, most new developments which are leasehold will offer more value-for-money benefits in terms of facilities, design themes, finishings etc. than freehold ones.

Location is also an important factor in the property market. For instance, there are large parts of coveted locations like Bandar Sunway, (the older parts of) Petaling Jaya, Tropicana, Seputeh and even Georgetown which are leasehold.

Future Prospect: Affordability Over Freehold Status

As the price of homes become increasingly expensive, the determining factor of whether a property is worth buying may no longer weigh solely on its tenure status. This may be especially true for first-time homebuyers, where affordability is the first hurdle to tackle when buying a home.

Given the high demand for freehold properties, the supply may be limited and could even reach a point in time when buyers may not have much of a choice. By then, the factor of freehold or leasehold could even be rendered meaningless.

Conclusion

To put it simply, it is always better to buy freehold over leasehold properties (given that all other factors of locations, price, type, size etc.). In the end, it depends on individual buyers on whether it is worth compromising on freehold status for other factors like affordability and location

source:  https://www.propsocial.my/topic/900/5-common-myths-in-the-freehold-vs-leasehold-dilemma-posted-by-propsocial-editor?utm_campaign=website&utm_source=sendgrid.com&utm_medium=email

Things You Need To Know Selling Your Property

Selling Your Property

The main objective of property investors is to reap the benefits of capital appreciation on 

properties invested. After all, the effort, time and hard-earned money spent should 

amount to something, right? When you are ready to sell your property, it is important to

 extend that effort, time and money a little more to complete this final step.

How much is it worth now?

The current value of the property should not be based on its purchase price. It should be higher and 

do take into account the costs that would be incurred in the course of selling a property. 

CheckiProperty.com.my and gauge the price that most sellers are going for, and see if it matches the 

minimum return-on-investment that you are expecting.

source: https://www.iproperty.com.my/resources/sell-your-property.aspx

Get it appraised

Get a property appraisal done by a certified valuer from a real estate agency as well before inviting

 potential buyers to view the property. This will provide you with a more accurate indication of what 

the selling price in the area is and also details of other recent transactions involving similar properties

 within the vicinity.

Make it look good!

First impressions matter. Be sure that your property is in a good shape by fixing everything that needs 

to be fixed, giving the place a solid spring-cleaning and throwing a fresh coat of paint on the walls. 

Don't underestimate the power of aesthetic appeal as they attract the attention of potential buyers. 

More importantly, these buyers will remember your property! Make potential buyers want to live there!

Advertise

Put an ad in iProperty.com.my. Alternatively, use the services of a reputed property agent to cut down

 on the time and work involved on your part. These agents will advertise the property for you, vet

 through potential buyers, negotiate with them, and complete the paperwork on your behalf, once

 the sale is concluded.

Legal advise

You could appoint a lawyer at the same time as your agent. In most instances, sellers only appoint a

 lawyer when they have secured an offer. Appointing a lawyer right from the beginning could help

 avoid delays and allow time for the collection of necessary documentation involved in transferring

 ownership of your property to the new buyer. 

Let the viewing begin!

Viewings are usually conducted in the evenings and on weekends as this is the time when prospective

 buyers are available. 

Accepting an offer

If a buyer is interested, he/she will make an offer to buy it. This is normally done through negotiations

 with your estate agent; if you are handling it yourself, then the offer will be made to you directly. The

 buyer does not necessarily have to offer the asking price. If you get a private offer but you have

 signed a contract with an estate agent, you may still have to pay professional fees, depending on

 the kind of contract you have. Many buyers will make an initial offer below the asking price, so you

 should expect to negotiate. However, when there is a lot of demand, some properties may eventually

 sell for more than the original asking price.

The price you are likely to get usually depends on:

• Whether the asking price is realistic compared to similar properties

• How quickly the buyer wants to move

• Whether property prices are rising

• Whether your property is in a popular area

Letter of Offer

Some real estate agents will ask the buyer to pay an earnest deposit of between 2-3% of the

 offered sum when they make an offer and signs a 'Letter of Offer to Purchase' or an 'Agreement

 To Purchase'. The real estate agent normally keeps the earnest deposit in their client's account as

 stakeholders from the date the offer is made until the execution of the Sales & Purchase Agreement.

Sale & Purchase Agreement (SPA)

After accepting an offer, you or your estate agent will need to give your lawyer certain information 

to begin the legal preparations for the sale. When the buyer executes the SPA, the buyer will pay

 the balance of the first 10% of the purchase price (less than the earnest deposit). The documents

 will then be forwarded to you for execution and then stamped. This must be done within 14 days

 of the date of the signing of the 'Letter of Offer to Purchase'.

Based on the standard terms in SPA, the remaining 90% will be payable to you within three months

 from when the SPA or three months from the SPA becomes unconditional.

Sold!

Once all payments have been made and all documents are finalised, the property will successfully 

be transferred to the buyer. Do note that you might need to pay Real Property Gains Tax (RPGT). 

Effective 1 January 2013, gains from the disposal of residential and commercial properties are taxed

 depending on the holding period of properties.

source: https://www.iproperty.com.my/resources/sell-your-property.aspx

MRT Phase 2 almost 95% completed

PETALING JAYA (Dec 14): Progress-wise, the second and final phase of the Mass Rapid Transit (MRT) project involving the Semantan-Kajang line is almost 95% completed.

MRT Sungai Buloh-Kajang (MRT SBK) project director, Marcus Karakashian said progress includes all station structure works, rail systems and trains.  

"We expect the MRT test run for the Phase Two to take place as early as January 2017 before its operation in July the same year," he told a media briefing here yesterday.

The 30km Phase Two involves 19 stations between Semantan to Kajang and part of the RM23 billion MRT project which spans 51km with 31 stations.

Meanwhile, Feeder Bus and Infrastructure Development chief Rudyanto Azhar said 112 feeder buses would begin operating on 25 routes from the 12 stations for the phase one, Sungai Buloh-Semantan line this Friday.

He said the buses would run on a frequency of between 10 minutes and 15 minutes with the routes designed to serve residential and commercial areas within 3 km of an MRT station.

source: http://www.theedgeproperty.com.my/content/1006121/mrt-phase-2-almost-95-completed

Malaysia, Singapore ink deal on high-speed rail link

PUTRAJAYA (Dec 13): The agreement on the Kuala Lumpur-Singapore High-Speed Rail (HSR) was signed between Malaysia and Singapore today.

When completed, the HSR will slash travel time between KL and the island republic from over five hours by road to 90 minutes.

The 350km bullet-train line will "transform" the way the two do business, the countries' leaders said at the deal signing in Putrajaya, AFP reported today.

"I know people are excited about it," Malaysia Prime Minister Datuk Seri Najib Tun Razak said, adding the project would "open a new landscape in terms of bilateral relations".

Singapore Prime Minister Lee Hsien Loong described the rail link as a "marquee project" that will "transform the way we do business".

The deal was signed by Minister in the Prime Minister's Department Datuk Abdul Rahman Dahlan and Singapore Transport Minister Khaw Boon Wan.

Najib and Lee, who were attending the 7th Malaysia-Singapore Leaders’ Retreat here, witnessed the signing ceremony.

The price tag of the mega project is estimated to be as high as US$15 billion (RM67 billion) and is expected to be completed in 2026.

The trains will run at a top speed of more than 300kph.

The rail proposal has already sparked interest among major Chinese, Japanese, and South Korean rail firms.

Meanwhile, Bernama reported that the leaders of the two countries will not compromise on border security aspects in relation to the KL-Singapore HSR.

Najib said both countries had found ways to strike the right balance between being passenger friendly without overlooking security issues for the HSR.

"We have found the proper solutions. There will be three common customs, immigration and quarantine (CIQ) facilities. These will monitor movement of people.

"We believe it is a solution which is workable. It is passenger-friendly and at the same time does not compromise on the security aspects. I think we have found the right balance between the two," he said at a joint press conference with Lee here today.

Lee said there was a need to make the Malaysia-Singapore border safe and secure, Bernama reported.

"There is no need to close down the Malaysia-Singapore border due to security problems. We need to manage the problem with close cooperation from agencies on both sides,” he said at the same event.

Both governments will take responsibility for developing, constructing and maintaining the civil infrastructure and stations located in their respective countries.

The two countries have also agreed that the HSR will have eight stations, with terminals in Bandar Malaysia (Kuala Lumpur) and Singapore, and six intermediate stations in Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Iskandar Puteri.

All stations will be designed to integrate with the local public transport systems to ensure seamless connectivity.

To facilitate swift and seamless travel, both governments also agreed to co-locate the CIQ facilities at three locations, namely Singapore, Iskandar Puteri and Kuala Lumpur, so that international-bound passengers will only need to undergo CIQ clearance by both Malaysia and Singapore authorities at the point of departure

source: http://www.theedgeproperty.com.my/content/1005606/malaysia-singapore-ink-deal-high-speed-rail-link

Remote, secluded, and inconvenient?

“It is too secluded!”, “Why would you want to stay somewhere so inconvenient?”, “I’d rather stay in Bandar Mahkota Cheras”… These are among the most common responses we hear whenever Bandar Sungai Long is mentioned, while some have not even heard of the township before. Over the years, the impression formed of Bandar Sungai Long is remote, inconvenient, distant, and all things negative. But, is that really the case?

Originally a rubber estate, Bandar Sungai Long was developed into a township in 1989, which was only about 500 acres in size. Now, it covers about 690 acres! Due to changing market demands, new real estate projects have also been cropping up within the township, a telling sign of Bandar Sungai Long’s potential for growth.

Connectivity the catalyst for growth

Don’t be fooled by the expansive greenery surrounding Bandar Sungai Long - though it may feel like it’s miles away from the city, the township is in fact within easy connectivity to KL and other parts of the Klang Valley.

Highways connecting to this township include the Cheras-Kajang Expressway and the SILK highway, as well as a connecting road from the SILK highway that links directly to the residential area of ​​Bandar Sungai Long (via Persiaran Bukit Sungai Long 1). Forget the hectic traffic of Bandar Mahkota Cheras, Bandar Sungai Long is accessible without having to brave through the crawl throughout the neighbouring towns during peak hours.

With these two connecting highways, heading to downtown KL will also be a breeze, with the SILK highway easily connecting to the SMART Tunnel, leading to KLCC within a few minutes. Under smooth traffic, residents can reach KLCC in approximately 25-30 minutes. Other than that, Semenyih is also within a 15-minute drive away via the SILK highway.

Connectivity to the region will further be improved with the East Klang Valley Expressway (EKVE) will be built and is slated for completion in 2019. By then, this 36.16 kilometers long highway will connect to Bandar Sungai Long, Bandar Mahkota Cheras, Hulu Langat, Ampang and Ukay Perdana, close to KL city. Apart from that, the EKVE will also enable easier connectivity to the Middle Ring Road 2 (MRR2) and DUKE highway. The upcoming EKVE is also set to bring a new facelift to Bandar Sungai Long.

In addition, Bandar Sungai Long is also included in the government's grand scheme for an improved and even more extensive public transportation system, with a total of four MRT stations planned within a 4km radius of the township. A combination of roadways and rail will enable increased connectivity from Bandar Sungai Long, with just a convenient hop onto the MRT which will bring commuters straight into the city centre. Rapid KL busses also serve the township of Bandar Sungai Long, providing ample accessibility within the town itself and to KL city for those without their own means of transportation.

Connectivity is the most essential element of urban living, which is not a difficult criteria for Bandar Sungai Long to fulfill.

Convenient living close to amenities

Though seemingly secluded from the world thanks to its peaceful environment,Bandar Sungai Long is a self-sustainable township, with residential and commercial developments within, complemented by commercial hubs and a great number of amenities necessary for convenient urban living.

Anchored by the exclusive Sungai Long Golf and Country Club (SLGCC), Bandar Sungai Long retains a quiet and peaceful surrounding, with acres of green turf and quaint lakes. SLGCC is aesthetically-appealing, however, given its world-class status, it may not be an easily affordable place for all to play. The course is the preferred spot for the Sultan of Selangor to enjoy a round of golf, as well as expatriates.

Amenities which can be found within Bandar Sungai Long are the basics like hospitals, petrol stations, markets, fitness centres and such, all within the township. Residents will not have to brave traffic or waste time driving too far in order to reach these much needed amenities.

Just 5 minutes from Bandar Sungai Long, is Bandar Mahkota Cheras, which provides a wide array of eateries, and entertainment spots. There is also an AEON Big hypermarket there, making it evermore convenient for residents of Bandar Sungai Long to acquire their daily necessities. There is also a night market every Tuesday along Persiaran Sungai Long 1, offering scrumptious street eats, drawing even those from nearby Bandar Mahkota Cheras and Kajang.

The nearest mall to Bandar Sungai Long is The Mines located in Seri Kembangan, just about 15 minutes away. The much larger IOI City Mall in Putrajaya is also only about 20 minutes away from the SILK highway that leads to the MEX highway before connecting to IOI City Mall.

As for educational institutions, aside from an existing secondary school, a brand new SJK (C) Bandar Sungai Long primary school has also begun recruiting students for the coming year. Since the establishment of the first block of Tunku Abdul Rahman University (UTAR) in August 2002, the university is now a 2-block campus in Sungai Long to accommodate more students and provide more facilities.

Variety of real-estate for a continuously booming community

The community of Bandar Sungai Long is a diverse one, ranging from families to single working professionals, to students, lecturers and staff of nearby UTAR, in addition to expats. As such, the property scene is a varied one, with residential developments of luxurious gated and guarded communities closer to the green fairways of the SLGCC to mid-range high-rise condominiums as well as semi-detached homes and terraces along with some commercial shop lots.

Most of the households in Bandar Sungai Long fall within the middle to high income group, with signs of gentrification as seen in the upgrading of security in the neighbourhoods. These older housing estates which were initially without security, are willing to pay for the construction of high-quality perimeter fencing and the employment of strict security teams to monitor their neighbourhoods. As such, most of the residential phases in Bandar Sungai Long has its own security.

Several high-rise residential developments are currently ongoing in the town, preparing to cater to the growing population of Bandar Sungai Long, set to change the skyline of the township by the time they are completed.

Untapped property market

According to data collected, it shows that most of the homebuyers who can afford to buy houses at Bandar Sungai Long belong to the middle to high income earning group, while buyers of newly-launched condominium projects in the area are mostly long-term residents currently living in the township itself.

Given the UTAR campus in the township, most of of the buyers are also those looking to buy to rent to students, and even staff and lecturers of the university. As such, these groups, both investors and renters, will provide a steady demand for properties in the township.

Properties in Bandar Sungai Long have relatively appreciated in value over the years. A standard double-storey terrace house which was RM550,000 ten years ago, can now fetch around RM1.3 million on the market, which is more than 100% of appreciation in value!

At present stage, the market demand for terrace units and apartments is considerably high, making it a great time to invest in these property types within the township; conversely, semi-detached and bungalow units are in lower demand, giving buyers a slight upper-hand. Thus, families or those who intend to settle down in Bandar Sungai Long should strongly consider buying a home now, so as not to miss out on the opportunity.

Bandar Sungai Long is also expected to be the second Petaling Jaya, given its proximity to the city and expanding population. Completion of the EKVE highway is also anticipated to spur more residential and commercial projects in the township.

Conclusion

By taking a closer look at Bandar Sungai Long, you may conclude that the general consensus of Bandar Sungai Long being “remote, faraway, and inconvenient” is a far cry from its strategic location. On the contrary, Bandar Sungai Long is close to several other established townships and enjoys direct access to major highways.

A unique township where you can be at one with nature while remaining close to the city, Bandar Sungai Long is a highly liveable township with a good choice of residential types where amenities and conveniences are just at your doorstep, while accessibility is a certainty given its strategic location.

Bandar Sungai Long is also a developing town, with future development plans for infrastructure and connectivity. As such, investors should keep an eye out on the area, where future developments will give potential for real-estate within the township to steadily rise.

source: https://www.propsocial.my/topic/871/bandar-sungai-long-hidden-gem-clouded-by-misconception-posted-by-propsocial-editor?utm_campaign=website&utm_source=sendgrid.com&utm_medium=email

Come watch this short video of Bandar Sungai Long: