The question of whether a freehold property is indeed better than a leasehold property has been the subject of a long-standing debate that does not seem to end anytime soon. If anything, the persistence of the comparison is indicative of how there isn’t an unequivocal answer, nor is there a hard-and-fast rule that posits one to be better than the other.
What then, should you be looking at, when you decide between a freehold property and a leasehold property?
If you intend to pass down your property to the next generation, or reap greater capital appreciation in the long run, freehold properties may appear more attractive. That said, freehold properties can still be taken back by the government, should the site be part of an upcoming development. Freehold properties can also be sold through en bloc, if the majority of the residents agree to the sale.
Investors may be inclined to purchase 99-year leasehold properties, which could have a better entry price than a freehold counterpart. As lease balance would not be a consideration for people looking to rent properties, a leasehold property which offers residents an attractive lifestyle, may be able to fetch high rental yield. This, coupled with a potentially better entry price, could therefore render a leasehold property a worthwhile investment.
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