If you're looking to invest in property in Malaysia, you've probably come across both freehold and leasehold listings. While freehold may sound like the obvious choice, leasehold properties are often cheaper, newer, and even sometimes locatedn prime urban areas.
So, the big question is: Are leasehold properties actually a smart investment—or are they too risky to be worth it? Let’s explore the pros, cons, and what every investor should know.
Pros of Investing in a Leasehold Property
Despite common concerns, leasehold properties can offer real advantages—especially for investors who know how to play it smart.
1. Lower Entry Cost
- Leasehold units are typically 5%–30% cheaper than comparable freehold properties.
- This allows for better rental yield or easier entry for investors
2. Strategic Urban Locations
- Many government-planned developments sit on leasehold land.
- If location is of interest, leasehold might offer access to high-demand, city-edge areas with accessible public transportation.
3. Newer Facilities & Modern Builds
- Leasehold condos and landed homes are often built with up-to-date amenities: security systems, clubhouses, eco-design, etc.
- Easier to attract renters or young buyers.
Cons of Investing in a Leasehold Property
However, leasehold investment comes with real risks that can affect your long-term profit and exit strategy.
1. Depreciation as Lease Shortens
- The property value typically drops as the lease approaches expiry.
- Buyers and banks become more cautious—hurting resale value and financing.
2. Higher Renewal Costs
- Renewal costs that can run into hundreds of thousands of ringgit
3. Uncertainty in Lease Renewal
- While most renewals are granted, there’s no guarantee—especially if the land is earmarked for development or infrastructure projects.
- Investors must plan well before the expiry approaches.
Who Should Invest in Leasehold Property?
Leasehold can be a solid investment if you:
- Plan to hold the property for a shorter number of years, before lease length becomes an issue.
- Target rental income in high-demand areas.
- Understand the legal and renewal process—or work with an expert.
- Have a long-term strategy that includes renewing the lease.
Final Verdict: Worth It or Risky?
Verdict: It depends on your investment horizon and risk appetite.
| Investment Goal | Leasehold Property Fit? |
| Short-term rental income | Often ideal |
| First-time property investor | Affordable entry |
| Long-term capital growth | Choose carefully (make sure the lease has been renewed or can be renewed) |
| Buy-and-hold retirement asset | Risky without renewal |
| Flip/resale in 10+ years | Check lease balance now |
How Sambung Nyawa Can Help
If you’re investing in a leasehold unit—or already own one—it’s important to have a lease strategy in place. We help Malaysian homeowners:
- Understand lease terms
- Renew before the value drops
- Navigate land office procedures with ease
Disclaimer: The information above is based on current data and regulations as of the date of publication. Leasehold property laws, procedures, and policies may change over time.