Investing in Malaysian property may seem like risky business, especially for first-timers. Before you invest, you have to think wisely about what can be the best property investment to buy in Malaysia.
To your rescue, Ewen Sim has attempted to make you take the best decision about the best property investment by justifying many angles and factors in her video. Read more here!
Property Investment Strategies in Malaysia
1. How to define the ‘best property investment’
In general, the best one is obviously the property that can give us the maximum amount of income.
This income is measured by rental yield and highest capital growth in a long term.
These two matrixes are very subjective and depend heavily on market conditions and surrounding developments.
When it comes to rental yield, typically, properties with a low entry point will offer the highest rental yield returns.
As for capital appreciation, a residential investment property which fits the following criteria will have higher capital appreciation potential:
- Within walking distance to public transportation nodes (MRT, LRT)
- Abundance of amenities located nearby (shops for groceries, eateries, etc.)
- Plenty of available jobs and close to business centers, universities, and hospitals
Arguably, the residential properties tend to perform resiliently during challenging times.
It may have a good chance of flourishing in the future when the market has recovered over commercial properties which are subject to economic cycles.
This is one of the considerable reasons why people invest into housing properties more.
2. Types of properties to invest in
If you are looking to invest in Kuala Lumpur, for instance, housing estates that have received the most investment interest are those that have a lot of modern lifestyle amenities like shopping malls, cinemas, retails, and F&B outlets nearby.
Investors are also looking to capitalize on a promising rental market because of the influx of workers and students in KL.
Specific areas with cosmopolitan landscapes of upscale eateries and entertainment outlets catering to the expatriate community have also grasped the interest of the investor.
Bukit Jalil and Mont Kiara fit the bill in this regard.
Bukit Jalil provides some high-rise properties with decent rental yields and a strong potential for future capital growth.
Mont Kiara’s condominiums continue to command high prices, generate good capital appreciation, and provide attractive rental yields.
Damansara in Selangor is a popular choice among property investors as well.
It has excellent infrastructure and amenities nearby, so it offers attractive rental yields and capital appreciation, which bodes well for a long-term investment strategy.
Get an expert to help you with your property investment, especially if it’s your first time. Choose a good real estate agent to work with. How to know if your agent is skillful you can check this guide for REN checking.
3. Expected returns on investment
Rental yields vary uncontrollably by property type, location, and area.
However, in general terms, a rental yield of 4% per annum or more would be considered good in Malaysia.
It is important to remember that the fundamental support for price growth for housing property in the long run would be:
- land scarcity
- growing population with inflation
High housing prices are often attributed to the cost of land.
This phenomenon leads to an increase in land prices because the price developers are willing to pay for new land increases with the increase in housing market prices due to inflation.
Real estate is considered as a viable way to generate income by many people. One way, of course, is through housing property appreciation – the strategy of ‘buying low and selling high’.
But this strategy involves a lot of tasks and a keen understanding of the housing property market.
On the other hand, collecting rental income is also an appropriate strategy; this usually is used as a means for the asset to pay for itself – offsetting the loan taken for the purchase (if any).
Both strategies have their advantages and disadvantages, followed by inherent risks.
Point to be noted, the first strategy of buying low and selling high would only work well during a bull market. It would be a bad decision in a weak property market like now.
You would probably find yourself stuck with it longer than expected, having no buyers in sight.
Conclusion
This is how one should define and measure best property investment.
Step by step, if every new investor gets to understand the other criteria of the property investments, it will be easier for them when investing and finding out the best property for them in the Malaysian housing market.
>> Continue reading part 2 here! <<
Frequently Asked Questions
1. What is the most profitable property investment?
The most profitable property investment depends on factors like location, property type, and market conditions. Generally, high-growth areas and well-managed rental properties yield better returns.
2. What are the available investment opportunities?
Aside from real estate, diverse investment opportunities exist across categories such as stocks, bonds, alternative investments, savings, education, small businesses, collectibles, digital assets, and socially responsible investments. Consider your financial goals and risk tolerance when choosing.
3. Key factors to consider when purchasing a rental property
Key factors when buying a rental property include location, financing options, property management choices, legal compliance, insurance, operating expenses, market research, investment goals, partnerships, property type, and a long-term perspective. These factors are essential for a successful and profitable rental property investment.
4. What are Real Estate Investment Trusts (REITs) in Malaysia?
REITs are like stocks but focus on real estate. They’re often traded on stock markets. In Malaysia and globally, they get tax benefits and often pay better dividends than regular companies.
Still confused about investing in Malaysian property? Not to fret, IQI has a number of real estate professionals ready to help you solve your confusions. Submit your details below to get connected to an expert today!
