How to Invest in a Property in Malaysia

If you are to invest in 2020 what will you bank your cash on? There are various investment opportunities out there, including individual stocks, Forex trading, mutual funds, Index Funds or Exchange Traded Funds (ETFs) and bonds. However, all these would have been lucrative and minimal-risk investments if Coronavirus was not in existence.

After the world has been hit by the financial crisis and other catastrophes caused by this pandemic, it’s obvious that there will be consequences. So this is one reason you must invest. The advent of the pandemic has changed world systems, streamlining investment opportunities in Malaysia and other parts of the world. In 2020, the slowdown of the global economy has sprouted recession fears amidst all other concerns. So far, investing in real estate seems to be a major lucrative option for prospective investors. Why?

A lot is happening in the current property market in Malaysia. Prime Minister Muhyiddin recently announced RPGT (Real Property Gains Tax) exemptions. The RPGT will be exempted for the disposal of residential properties by Malaysian individuals from June 1, 2020 to December 2021. This means that anyone can purchase an entire property in Malaysia by paying a portion of the total cost upfront, then overtime paying off the balance and interest. Aspiring property owners can leverage this opportunity to buy a property with as little as 5% down payments.

You may wonder; why invest in property? Is buying and selling real estate risk-free? Well, like any other business, there are pros and cons. When it comes to buying and selling property in Malaysia, you have to deal with residential property overhang. However, there is little to worry about. The fact that the value of the property appreciates each year (all over the world) ensures you will get at least (if not more than) your ROI (Return On Investment) as you bought from the right property developers.

So how do you invest in a property in Malaysia? Highlighted below are five property investment tips for property investors in Malaysia.

 

1. Consider the property type you want to invest in

Basically, there are two types of properties available in Malaysia. They are residential property and commercial property.

Residential Property

This includes bungalows, terraced houses, semi-detached houses and strata residential properties such as apartments, condominiums and serviced residences. Residential property in Malaysia has grown over the years so there is a guarantee that it will continue to appreciate each year.

Commercial Property

Commercial units are comprised of office space and shops. In recent years, commercial real estate has proven to be a lucrative investment in Malaysia. Start-ups and SME’s are constantly looking for space to run their business so you cannot run out of tenants or sales. Moreover, if you decide to start your own business in the future, you will no longer need to look for a space for business operations.

 

2. Consider the location

Investment is sweet when it yields more than the ROI. It is vital to consider location before purchasing a property. Of course, there are states and cities in Malaysia where properties are highly-priced. You may consider Melaka or other location that has a property for sale.

Look for a location that has affordable properties, easy access for transportation, hospitals, banks, schools, supermarkets and other essential areas. For example, it’s a good idea to locate a property developer in Melaka to show you thousands of exclusive local listings, including undervalued properties.

Taman Bukit Cheng - double storey link house

3. Are you planning on short-term investment or long-term investment?

Indeed, many overseas and local buyers are looking for properties. Before purchasing, ask yourself if you wish to cash out in the first 5 years or do you want it to be a long-term investment? The choice is yours! However, remember that, the longer a property stays, the higher the value.

 

4. Verify the property

Ensure that you do not make a decision hurriedly when buying a property. Low prices are attractive but that does not mean you should jump to purchase property without verification. Check whether it has a land title, unpaid or overdue taxes, amongst other things. Knowing this information ahead of time will save you a lot of trouble and money.

 

5. How you can make money from real estate

You can make money after buying a property by:

  • Online Real Estate Investment Platforms
  • Renting out the property (become a landlord) if you have the time and knowledge to manage tenants
  • Real Estate Trading (a.k.a. House Flipping)

 

The Bottom Line

A good property investment plan will provide guidelines to help you organize your thoughts and actions. If you have been looking for an opportunity to become a property owner in Malaysia, this is the best time.

With the rising demand for property in Malaysia and the unending support of the government in the property market, anyone can become a real estate owner. You just need to pay a relatively small part of a property’s total value upfront to get started.

For more information, feel free to get in touch with us.

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