5 Things To Consider When Buying Property In Malaysia
Table of Contents
Singapore and Malaysia are two different markets offering different prospects to real estate investors. For example, Singapore has significant barriers to entry, especially for foreigners. High housing prices are one of these barriers to entry. Another one is the robust value of the Singaporean dollar versus other major currencies. In contrast, the ringgit is a bit weak when compared to other currencies. The housing market in Malaysia is also booming. This confluence of factors makes it a lucrative market for many investors.
Here are couple of things before you invest into real estate in Malaysia.
Select a Strategic Location
Malaysia has a surface area of 330,803 square kilometers as compared to Singapore’s 721.5 square kilometers. This large surface area gives you an ample choice when it comes to selecting a strategic location. However, you cannot choose any place. Instead, you have to target an area that has a high population. Properties in this area would have a high resell value. You can choose Johor Bahru, Kuala Lumpur, Penang, Malacca. These cities have a population of 424,648, 1.589 million and 1.746 million respectively. Locations that are close to malls, supermarkets, restaurants, and highways are an excellent idea as well.
Opt For Under-Developed Housing Schemes or Properties for Resale
The completion of under-developed properties is a top priority by local and national authorities. Consequently, these authorities offer various incentives to see the end of these projects. These incentives include rebates, free legal fees, and free stamp duties. The final cost of these houses is low giving you a high margin of profit when you sell the completed property. Considering finished apartments for resale to new owners is a brilliant idea as well.
In most cases, the cost of renovating these homes is low. Well-done renovations increase the resale value of such properties exponentially. You would make a handsome profit off them with little effort put into it except moving capital and hiring a renovator.
Examine the Reputation of the Developer
Developers are different. Some of them build incredible houses while others construct substandard homes. Select a property developed by reputable developers. These developers have a proven record of accomplishment. They have constructions that you can see and evaluate. Check with local authorities to determine if relevant authorities have condemned any of their buildings. Establish whether they are part of their local or national builders associations including the Master Builders Association Malaysia.
Consider Your Finances Situation
In 2017, the average price for a house in Kuala Lumpur, Selangor, and Sabah was RM773, 109, RM456, 817, and RM418, 712 respectively. Select a home that is in an affordable location. For example, go for a property in Sabah if you cannot afford one in Kuala Lumpur. Alternatively, you can opt for homes in other areas of Malaysia including Penang and Sarawak. You can go outside these locations as well. Remember, the average price of houses in Malaysia is RM397, 190.
Engage a Professional in the Industry
Succeeding in the real estate market in Malaysia is difficult if you do not have expert help in this field. You have to understand the growth prospects of the market. These prospects include analyzing the property values of the industry in addition to evaluating rental yields. Understanding the dynamics of this market is only possible if you engage an expert to help you interpret these indicators. Talk to an real estate expert so that you can make the right decision.