Malaysia has been an attractive destination for property investment due to its strong economic growth, stable political environment, and low cost of living.
Unlike other high-return investment tools such as the stock market, real estate in Malaysia tends to be more stable and does not fluctuate wildly. This stability can be attributed to several factors, such as the consistent demand for housing and limited supply, which helps to maintain property values.
In this video, Ewen Sim shares her tips on property investment in Malaysia. Continue reading to learn more!
1. Invest within your budget
To invest in a suitable property, one should first understand the demographic of his future tenant. Non-local tenants tend to rent high rises instead of landed houses due to the degree of safety and lifestyle elements offered. However, it has lower capital appreciation than landed property, which also means it has a lower resale value.
On the other hand, local tenants prefer to live in a landed property that possessed higher capital appreciation. Although landed property is more expensive than the high rise, it is still an attractive investment option as it benefits more in the long run with the escalating prices in the past decade.
Although so to say, a high rise is also not a worthless property to invest in if one chooses an affordable apartment. While the total value of rent may be lower due to the desirability of the rental property, the rental yield could be far more favorable. Hence, it is important to understand target market and invest within your budget to ensure having a healthy cash flow.
2. Freehold ownership > leasehold ownership
Generally, people prefer freehold ownership over leasehold, in which the land allocated to the owner indefinitely instead of having a limited term (usually not exceeding 99 years). Although it is expensive, however, it is still not more expensive than renewing expired lease ownership.
Property investment is usually considered a medium to long-term investment, and needs at least 5 years to achieve a considerable return on capital appreciation; thus, it is not suitable for those who are looking for a quick return.
In addition, one should ensure that the property that wish to invest in, is not only attractive to oneself; but should also include appealing qualities such as attractive amenities, safe streets, and quality schools which will bring more benefits for investment.
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