Leasehold vs. Freehold -How are they different?

  • Select Sales Center Property by Select Sales Center Property
  • 10 months ago
  • Real Estate
  • 0

What is Leasehold?

Leasehold is partial ownership for a certain period of time through renting or buying a property. This means the property would return to the freeholder (or landlord) upon expiry unless there is a renewal. This type of rental/buying is common for investors due to cheaper prices and lower costs. However, there may be the risk of damage to the property in case of a disaster, or expropriation during your leasehold period. In that case, you will not get compensated by any means.

What is Freehold?

Freehold is permanent and complete ownership of land or property. This means you will have complete freedom regarding the renovation, decoration, and maintenance of your property or land as you would like. If there are damages caused by disasters or if your property gets expropriated at any point in time, you will get compensation in accordance with the title along with a 100% complete bank loan. Note that despite the high investment needed for the purchase, the freeholder is free to make a profit off the property in various ways such as renting out, selling, or passing it over to their children as a heritage.

Leasehold vs. Freehold: Which is more suitable?

The question of which is more appropriate for you really depends on what you want and your purpose of investment.

If you would like to make a profit for an extensive period of time, freeholding might be a more appropriate choice. This is because the property will remain yours even for a number of years into the future due to complete ownership. Moreover, you are free to make a profit off of your property through various methods such as selling it or renting it out. Most importantly, land prices have risen in the past few years, especially in economic areas or urban areas such as Sathorn or Silom. Prices are sure to increase in years to come.

If you would like to make a profit for an extensive period of time, freeholding might be a more appropriate choice. This is because the property will remain yours even for a number of years into the future due to complete ownership. Moreover, you are free to make a profit off of your property through various methods such as selling it or renting it out. Most importantly, land prices have risen in the past few years, especially in economic areas or urban areas such as Sathorn or Silom. Prices are sure to increase in years to come.

Conclusion

Whether you are looking to purchase all the way with freehold or just through leasehold, if you made it this far into the article, we hope you are well-informed of the pros and cons of each type of purchase and its limitations. If you are going for a freehold, we hope you enjoy your fully-owned property and if you are going for just a leasehold, take note of the different limitations and you should be fine in the long run.

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