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5 Factors You Need To Consider when Buying A Property In Malaysia!
Malaysia is a wonderful place to live. Not only is it considered one of the more affordable places to live in Southeast Asia and is also the best country to retire in. This means that if you’ve started searching for houses for sale in Malaysia, you’re already on the right path to setting up a successful future! While the Malaysian property market has been up and down in recent years, the good news is that right now is a great time to buy in Malaysia. It’s a buyer’s market. But having enough money to buy a house isn’t the only thing to consider. Here's a checklist of factors you need to think about while searching for your perfect Malaysian property. 1) Make Sure You Do The Property Research Whether you’ve lived in Malaysia your entire life, or have recently moved here and are looking to buy a home, research is the most important thing you can do before jumping into the housing market. Malaysia is a big country but which location will best suit your needs? Understanding what land types are available to you will set you on the right path, as well as gaining knowledge about lending guidelines in Malaysia and how to know which one is the right developer. Whether you’re searching for a home as a young couple, a family or as an investment property, consider your needs with regards to: • Location. • Facilities • Age of the property. • Whether you want to buy a completed property, a sub-sale property, or a brand new home that is still under construction. 2) Consider Your Budget Carefully Of course, money is important and probably the defining factor for every person searching for a property in Malaysia. Malaysia’s real estate market is looking positive for 2019 and if you plan well, you could easily own your first home this year. For example, if you are a couple with a combined income of RM12,000, your monthly repayments should not be more than about RM4,000. We know that a lot of Malaysians want to buy property, but aren’t willing to change their lifestyle to afford one, so understanding what you can realistically purchase is very important. As for down payments, you'll need to ensure you have the 10% to pay upfront. Apart from this, other additional costs such as legal fees, 6% government service tax on the real estate agent’s commission, and stamp duty are all important to consider. Generally, most banks in Malaysia offer loans of around 90% of the property’s price for your first two residential properties. 3) Understand Property Types and The Risks of Your Investment Are you looking for a condominium, apartment, terrace house, semi-detached, or bungalow? Do you want to purchase a unit in an older – but potentially cheaper – building, or perhaps a sub-sale unit before it's completed? Deciding on your property type is one thing, but then you have to weigh all the pros and cons, and the average property prices, which vary significantly. Location is a key component of this. For example, if you bought a single-storey house in Bangsar 15 years ago, you might get a return of more than 200% of what you paid today. This is because the location of Bangsar has exploded in popularity – and you might not find the same capital appreciation elsewhere. Other risks include Malaysia’s typical property cycle, which dictates whether the property prices go up or down. At the moment, Malaysia is in what is called a ‘downturn’, where residential properties are abundant for sale, with many remaining unsold for a long period. So, if you’re looking to purchase now, you need to understand not just what this means, but how it can factor into your decision-making process. A few questions to consider are: • What could the long-term effects of purchasing a house during a downturn be? • If you’re looking for a rental property, what's your rental return likely to be? How easy will it be to find tenants, based on your location, nearby amenities and costs? How many repairs to the property or unforeseen costs could there be that might affect your cash flow as a homeowner? Remember, return on investment is never guaranteed, and outlooks can change year-to-year, influenced by complex factors. 4) Find an Experienced Property Guru. An experienced, engaged and friendly real estate guru can be worth their weight in gold. Not only will they work hard to find properties within your budget for you, but they’ll advocate for you, coordinate viewings and communications, and protect your interests. Because knowledge is power, we learn the necessary knowledge that we can avoid a lot of unnecessary costs. When choosing someone to help you to learn the property investment knowledge, make sure the property guru has professional knowledge by showing their students’ result to ensure you will have the same result also. They should be the best defender for you to avoid you to lose money. 5) Begin Your Property Search! While there'll still be a few other details to iron out, such as where and how you will take out your loan, and whether you'll engage an independent mortgage advisor, but the most important is TAKE ACTION. Start your property search online and offline! Have a look at what’s available and make a list of areas, bookmarking properties that seem in line with your wants and needs. Take all things into consideration and collate all your research – don’t get swayed by family or friends who tell you unsubstantiated trends or rumours about property trends. Finally, make sure you find out if what they’re telling you is true by asking people within the industry, and through reading plenty of current news about Malaysia’s property market. Happy investing!