17 July 2020 Malaysia

Have you ever heard that going into the real estate market could help you gain and secure your wealth? Well, that's likely to be true if you have the capital, financially stable, knowledgable and also with a bit of luck. The property field is almost like a game if you have ever played Monopoly, you can imagine that property buying for investment could either make you rich or let you lose a hefty amount of capital. It's a risk that every property investor has to take so for those who are planning to go into property investing, make sure you have knowledge and study because it'll be your loss if you don't. There are a few types of property investment here in Malaysia but what I aim to share in this post is for those looking into Residential Investment as this is the most suitable type for those who want to start in the industry. Why I say? Well, some people may not yet afford to buy a home hence they will have to look into renting and that is where an investor comes in. What an investor has to do is identify a location with a possible high rental demand but require a lower capital as you'll want to gain more from your investment. This sounds tricky but fret not, all you need is a little highlight and exposure on this and you'll be ready to go. Keep on reading to prepare yourself as a Property Investor.

Real estate is a popular option for aspiring investors. Admittedly, the property market has its own fair of challenges, but if you buy the right real estate product which fits your purchasing power and needs, it could provide a healthy return on investment (ROI), either in terms of rental revenue or capital gain. According to the National Property Information Centre (NAPIC), the value of homes continues to appreciate each year:

So how to start looking for a property?

1. Determine how much money you can afford for an investment property

The first step is to determine how much capital you can afford for property investment. This is important for you to secure a home loan. The right way is to determine your purchasing power via the Debt to Service Ratio (DSR).

DSR = Debt/Net Income (after EPF, SOCSO and Income Tax deductions)

DSR is a measure of your debt against your net income and the main rule is that your debt should not exceed 70% of your net income. All the banks in Malaysia use this DSR rule to ascertain if you are able to repay your monthly loan installments.

2. Decide which property type to invest in

What are the different types of properties available in Malaysia? There are a few but for this post, I'll be focusing on residential property.
Under this sub-category, the 4 popular options are: 
  • Terrace house, 
  • Semi-Detach House, 
  • Detach house (bungalows) 
  • High Rise 

3. What are the available investment opportunities and ways to make money?

There are various ways you can make money based on your investment goals either buying a property to resell or for a rental return which is a long term investment.

Renting out your property for income is the default option for most property investors. A rental property is a great start for investment as you can enjoy positive cash flows while leveraging on the potential capital growth from property appreciation which you could choose to resell afterward.

4. Key factors to consider when purchasing a rental property

When purchasing a rental property, it is important that you conduct sufficient research beforehand to ascertain that your property will be highly tenantable. 
The main key is location, location and LOCATION!

To ease you out, start with an area you are familiar with, preferably a location nearby as this facilitates maintenance of property and management of tenants easily for you. Research all the properties within the area and keep it under your radar for constant monitoring. Take your time but make sure you purchase at the right time.

Also, find the gap between supply and demand. 
Properties in areas with robust economic activities will always do well. 
Is there a hospital nearby? 
Nurses and doctors prefer to rent a place nearby to minimize their daily commute. 
Or is there a university/college in the neighborhood? 
You can depend on the steady stream of students as your target tenants.

When buying a property, the neighborhood matters. Your target tenants will be families or young couples, so look for a unit in a friendly and secure neighborhood with good primary and secondary schools nearby.

Shah Alam's suburbs have now become a favored place for people who want to live in a greener, quieter surroundings and yet still have easy access to amenities. Apart from the Federal Highway, Shah Alam is accessible via the New Klang Valley Expressway (NKVE), North-South Expressway Central Link (ELITE), Guthrie Corridor Expressway (GCE) and Shah Alam Expressway (KESAS), and there will be a new highway coming soon too (DASH).

Shah Alam is also an international and local education hub with several prominent public and private schools, and colleges such as:
  • UiTM (Main campus and Puncak Alam campus)
  • MAZ International School
  • Greenview Islamic International School
  • Tenby Schools Setia Eco Park
  • Dwi Emas International School.
Prime spots are of course expensive, so many real estate investors instead look for potential locations with upcoming developments.

So this is where I'm stepping in to help you with. 
What if I say I have a new development project in Shah Alam that contains all these key factors such as:
  • Robust economic activities
  • Easy access to 5 major highways
  • Nearby Government Schools
  • Nearby International Schools
  • Nearby Government Clinic
  • Nearby Government University 
  • Nearby University Hospital
  • Surrounded by Top Developers in Malaysia
This location will soon be a new redeveloped City once it's completed. Since it's still considered and the suburbs of Shah Alam, you'll find the pricing of the homes here still way cheaper than the city center of Shah Alam. There are various types of homes you could choose from, either high-rise or even landed property.

To know more, just click my name below. It'll direct you to my Whatsapp. I'll share more details through there, so don't be shy and just say Hi!

Post a comment

Thanks for leaving your thoughts, message me on Facebook for quick responses.