Leasehold vs Freehold
...  Posted on 13 ก.พ. 2567  ... 59
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Leasehold vs Freehold

Which type of investment is right for you?

What is the difference between Leasehold and Freehold ?

• Freehold refers to real estate. Where the holder owns the property completely

• Leasehold refers to real estate. Held through lease payment to obtain long-term leasehold rights within a specified period of time (not more than 30 years)

1. Leasehold?

"Condo Leasehold" refers to a condominium property where ownership is held for a specific period, and the owner must pay rent according to the specified lease terms. When the lease agreement expires, the ownership reverts to the landlord immediately. Condo Leasehold has the following characteristics:

  • The owner must enter into a lease agreement with the landlord, typically with a 30-year ownership period as per legal regulations.
  • The owner may request permission to manage construction, renovation, or decoration as deemed appropriate.
  • The owner is responsible for paying maintenance fees, annual service charges, and building insurance.
  • Rent payments must be made to the landlord according to the lease agreement.
  • The owner may be granted permission by the landlord to handle property-related matters.
  • The owner may have restrictions on their rights based on the landlord's regulations.
  • The lease agreement may be terminated if the owner fails to comply with the terms of the condo lease.

2. Freehold?

"Condo Freehold" refers to a condominium property where the ownership is held indefinitely. In other words, individuals who invest in this type of condominium will have perpetual ownership rights without any specified end date. Additionally, those who invest in a Freehold Condo receive various rights, including:

  • No obligation to pay rent according to any lease agreement.
  • Responsibility for maintaining and taking care of the building.
  • Holding ownership rights in their own name.

 

Investing in a condo, Leasehold or Freehold, which type is suitable for who?

Indeed, there is no one-size-fits-all formula for successful condominium investments, as it greatly depends on individual preferences and requirements. Comparing various aspects of Leasehold and Freehold condos can help highlight the differences that may align with the specific needs of each investor. Here are some considerations:

  • If you aim to generate substantial profits in the long term, Freehold may be an excellent option. This is because with Freehold ownership, regardless of how many decades pass, the real estate remains yours. You can explore various ways to increase profits, including selling or leasing. Importantly, as the years go by, the value of the land tends to increase, especially in economically thriving areas or prime city districts such as Sathorn and Silom. Rest assured that purchasing Freehold today can lead to significant growth in value in just a few years.
  • Leasehold is suitable for people who want to limit their budget. And focus on looking for a condominium in a central location, easy to travel to, and want to stay in for a certain period of time. Don't want to pass it on as an inheritance to others. or do not want to create a burden on their children and grandchildren You can also pay installments at a lower price.

"Foreign Ownership"

    • Leasehold can be held without restrictions.
    • Freehold condominium can be owned at a rate of 49% of the total units.

"Asset Value"

The value of Freehold condominiums is expected to trend higher in the future, following the upward trajectory of land prices. This is in contrast to Leasehold condominiums, where the appreciation may be comparatively lower.

 

 

 

 

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