Today what am I going to share with you? Many people always ask, is it better to buy a Freehold (FH) or Leasehold (LH) property in today’s market? Therefore, I decided to write this article to share with you my thoughts so that you can have a better understanding when comes to selecting your choice property. I believe most people will prefer to have a FH property if given a choice, but does it mean that all the FH property will sure make profit at the end of the day? We have witnessed many LH properties make good profit margin too. Therefore, it is always good to know how to determine the right property. Do not always think that FH property will sure make money too. For me I never believe in emotion purchase, I prefer to do research and using that to make the right judgement when comes to buying a property.
I always believe at the end of the day is all about the entry price when comes to deciding a FH or LH property to purchase.
I would like to share with you 3 important factors when choosing a FH property and they are:
The buyer took a 20 years loan, pay a 25% downpayment and subsequently rented the property out and let the tenant continue to pay for the rental and mortgage. Even whatever the shortfall in the mortgage, as the buyer will just top it up, end day the amount is going to reduce the principal too. I always take this approach as a form of force saving into the property. Just looking at the chart below, after 20 years, all the rental proceed that you are collecting will be for generation, which is why so many rich people out there choose to buy a FH property as they are leaving it as a legacy for their children.
b) Location, Location, Location
The second point will be location, if you can find a property that is FH and near to MRT will be a super plus point as property that is FH and near to MRT is only 13% in the whole Singapore. Demand vs supply, which is why FH property near MRT always hold its value and even appreciate more too.
c) Near to Good/ Renowned school
As you are reading now, may I ask you now, if you are a parent, will you also prefer to buy a property that is near to the good school that your kids can go into? I am sure you will say “YES” because we want the best for our kids too. Can you imagine this is a FH and near to good school, do you think is a super plus point?
I have witness property that is near to good school and FH, wow the profit margin is very high too. Take a look at the chart below. OMG, one of the owners make about $800,000 in profit. How you wish you own this property right? Sometime we ask ourselves, working so hard will I be able to save such kind of money? Time to work hard…
Hope you have enjoyed this article that I have shared with you, I purposely did not create a long article as I am not sure whether will you be keen to read more and I do not want to bore you for too long. In fact, I have another article which is very very very important too as I will be sharing with you on a case study on how I actually analyze whether the property is it priced right based on the one of the most important fundamental principles which is how to determine the potential upside of the asset, just the like the property mentioned above that make so much profit from that asset. I have also seen people who choose the wrong asset and end up making very little profit too, therefore I always believe in doing the right research and having the right knowledge to ensure your purchase will be a safe one (as you can see from the chart below). Of course, we can’t ensure you will make the profit you want, at least what we can do now is to ensure that your risk is at the lowest compare to other properties that are on the market.
Do not wait anymore, if you are keen to have the next article, please WhatsApp me so that I can forward to you. You should not miss this. See you soon.
PropNex Realty Pte Ltd or its salespersons will not be responsible for any errors or omissions or for the results obtained from the use of this information. All information is provided with no guarantee of accuracy. If in doubt, kindly seek appropriate advice from your financial advisors or bankers before you make any property investment decision.