Freehold vs. Leasehold? This comparison almost always comes to the minds of prospective property owners in developed countries with limited land such as Singapore. Property prices there are not cheap so any decision taken must have passed some mature considerations. For those of you who want to invest or just buy property to be occupied, knowing the characteristics of both platforms before stepping is recommended.
Freehold Properties Several Benefits
Freehold is a general term given to all types of property that can be owned indefinitely. But it must be noted that this is not completely free of government interference because when the government needs your land for the public interest, the freehold does not make a big difference. If your house is on a public highway then you have to give up the house when the government wants it to expand the highway. You also can’t avoid when the most votes from your neighborhood approve the construction of new blocks. You still have to move. However freehold gives you several benefits, as follows:
– Property on your behalf
– Annual rent is something you don’t need to worry about
– You can resell your property at a higher price
– Failing to maintain the building is something that rarely happens
Leasehold Property Entitled to Only 99 Years
At the leasehold scheme you are only entitled to use your property for the agreed rental period. Some rentals can reach up to 99 years, but most only reach a few years. You have certain limitations and when you want to manage a part (of the property) you must ask for approval from the freeholder. One of the striking shortcomings of this platform is that you can pay annual rental fees, monthly maintenance costs, building insurance and so on, all of which are certainly enough to drain your budget. But if there is a disaster or unforeseen incidents that might reduce the value of your property, you don’t need to worry as the freeholder guarantees it all. One of the more popular freehold properties will be Meyerhouse by UOL which is a freehold development that is the former Nanak Mansions.
Final comparison for Leasehold and Freehold Properties
Which is the best one? 99 years of ownership or full ownership rights? In fact, nothing better than another one as Freehold and Leasehold have their advantages and disadvantages. It all depends on how you plan to use the property. If you need the property to run a short-term business, freehold should not be your best option. But if you plan to run a business for decades, the freehold option seems cheaper. Whatever option you take, it is best to go through some mature considerations and a third party consultation session is highly recommended.