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What is the distinction between a leasehold and a freehold property?


Leasehold Freehold Property. What is the definition of freehold?

The owner of a freehold property owns his own assets. As a result, the owner will live forever, may sell or give it to anybody, and make their own judgments and choices.

What is a leasehold property?

A leasehold project is one in which the developer rents the area and uses it to build the project. for people who desire to own and live in a long-term rental The buyer will only be able to lease and retain the property for a lengthy time. Most leases are for 30 years, and when that time comes to an end, the purchaser will be considered to have relinquished possession of the lease and moved into that property. What will be the next step in the project’s development? It will be determined by the landowner. Alternatively, certain homes will be offered for a longer lease duration. Real Estate, on the other hand, will not be held by people who purchased it. When the rental time ends, the customer must return the item to the project in the same condition as before.

The advantage of purchasing a freehold home is that you will always own it.

The downside is that if a project of the same level has the same location, structure, or materials utilized, the freehold purchase price is nearly twice as much as the leasehold purchase price.

However, some Thais are hesitant to purchase a leasehold property because they believe we would not own it forever. Although this value is zero at the end of the contract, leasehold purchases are typical in other countries. Leasehold is more prevalent than freehold in several nations.

Why is leasehold purchase so widespread in other countries?

Money will rise in value over time if we understand the Time Value of Money idea. We could alter our minds and realize that buying a leasehold property is sometimes preferable to buying a freehold one.

The following is an example of a simple Time Value of Money concept :

If we have an amount of money that leads to a reward over time, the sum of money will grow as a result of the return on our investment. You might not realize how much more there is at first. However, compound returns will rise over time until the total amount of money is greater than the beginning capital.

Consider purchasing a freehold or leasehold home, each with its own set of advantages and disadvantages. And I believe that many individuals will have a better grasp of both forms of property acquisitions and will be able to select the one that best suits them.

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