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A lot of buyers have a firm rule: freehold or nothing. The moment leasehold comes up, they walk away. That instinct is worth double-checking.
Your situation is different? Ask me on WhatsApp. I reply myself, usually the same day.
Ask Jason on WhatsAppThe basic difference
Freehold means you own the land with no expiry. Leasehold means you hold it for a fixed term from the state, typically 99 years, after which it reverts to the state unless the lease is renewed (which usually involves paying a premium). That part is true. But it does not automatically make leasehold the worse investment.
Why leasehold can work in your favour
- Lower entry price. In my experience, comparable leasehold units are often priced 15–20% below freehold ones.
- Better rental yield. Tenants pay for location and condition, not tenure. Similar rent on a lower price means a higher yield.
- Little erosion early on. With most of a 99-year lease remaining, value is usually driven by location and demand, not by the years left.
| Illustration | Freehold | Leasehold |
|---|---|---|
| Price | RM600,000 | RM500,000 |
| Monthly rent (similar unit, same area) | RM2,000 | RM2,000 |
| Gross rental yield | 4.0% | 4.8% |
The real catch is financing
Banks want the remaining lease to outlast your loan by a comfortable buffer. If the remaining lease is too short, the bank may shorten your loan tenure, lower the margin or reject the application, and the same problem hits the next buyer when you sell. Each bank sets its own buffer, so check it before you commit.
Questions to ask before ruling it in or out
- How many years are left on the lease today?
- How many will be left when your loan ends, and when you expect to sell?
- Is the price gap to a comparable freehold unit big enough to justify it?
- Are you buying for rental yield, own stay, or long-term legacy for your children?
The real question is not freehold versus leasehold. It is whether the remaining years fit your actual loan and holding plan. If you are also weighing new launch against subsale, see New launch or subsale?
Considering a leasehold unit? Before ruling it out on principle, send it to me and we will check the numbers together.
General information, not financial advice. Lease renewal terms and bank policies differ by state and lender. By Jason Lim (REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6).