Freehold or Leasehold Condo?
When you want to own a property in Singapore, it is important to note if the property you are buying a freehold or leasehold. The main difference is the legal ownership of the property.
A freehold property means that the buyer owns the condo and the title deed of it. The buyer will only pay the mortgage and not a monthly rent. Freehold condos are more expensive than leasehold ones as you own the property for as long as you want.
There are several types of leasehold properties in Singapore – 99-, 999- or 103- years. After the lease expires, the legal ownership of the property will go back to the government. However, the main advantage of this is that the price of the property is often cheaper than the freehold one.
If your intention of buying a condo is stay in it for at least ten to twenty years, you might like to consider a freehold condo. This will ensure that the value of the condo will not depreciate in value the longer you stay. You can also leave it for your children when you grow old.
If you are mainly interested in capital appreciation and will be selling off the condo in just a few years, you might be better off buying the leasehold condo since the outlay of initial capital is lesser allowing a greater leverage.
Last but not least, always plan ahead and make sure you have holding power when prices start to go south if you are starting off with a small capital.