Malaysia and Thailand are popular choices for investors interested in Southeast Asia’s property markets. Both countries offer attractive opportunities, but Malaysia stands out for its flexibility in property management, high occupancy rates, and return on investment (ROI). With favourable foreign ownership policies, increasing demand in urban centers, and promising long-term prospects, Malaysia’s property market has proven more reliable and rewarding for investors than Thailand. This article will delve into the reasons why Malaysia excels over Thailand for property investment, supported by facts and figures.

Malaysia offers more flexibility in property management compared to Thailand

Investing in Malaysia offers several advantages, particularly in property management for foreign investors. Malaysia’s flexible policies, such as the Malaysia My Second Home (MM2H) program, allow foreigners to own freehold properties with minimal restrictions. In comparison, Thailand’s Condominium Act of 1979 imposes strict limits on foreign ownership, with only 49% of a condominium’s total floor area allowed for foreign ownership. Additionally, foreigners in Thailand cannot own land outright and must rely on long-term leaseholds or joint ventures with local Thai entities.

Foreigners can buy property in most states in Malaysia with few limitations. For instance, in Kuala Lumpur, the minimum price for foreign property purchases is set at RM 1 million (about $215,000 USD), which is considerably lower than similar thresholds in prime areas of Thailand. Furthermore, Malaysia offers various property management options for investors, including widely permitted short-term rentals like Airbnb in many urban areas. In contrast, in Thailand, short-term rentals of less than 30 days are illegal unless the property is licensed as a hotel, making property management more complicated for foreign investors.

Malaysia has more liberal property laws and less stringent leasehold requirements compared to Thailand. This makes it easier for foreign investors to manage and profit from their properties without facing excessive red tape. The flexibility in Malaysia provides a more secure investment environment, especially for those looking for long-term returns.

Occupancy rates in Malaysia show stronger growth than Thailand’s saturated market

Occupancy rates play a crucial role in determining the success of a property investment. Malaysia is experiencing stronger growth in this area than Thailand. Economic centers like Kuala Lumpur and Penang are witnessing steady increases in demand due to urbanization, infrastructure development, and a growing middle class. The latest report from the National Property Information Centre (NAPIC) indicates that the occupancy rate for residential properties in Kuala Lumpur was 78.5% in 2024. Further growth is projected as the capital city continues to attract both domestic and international residents.

Thailand is currently facing an oversupply issue in its major markets, particularly in popular tourist destinations such as Phuket and Pattaya. The Real Estate Information Center (REIC) in Thailand reports that condominium occupancy rates in Bangkok have been around 70% in recent years, making it challenging to find tenants after buying a house or condo in Bangkok. The COVID-19 pandemic has worsened the situation, leading to higher vacancy rates in previously popular areas like Chiang Mai and Phuket, as a result of the decrease in international tourism.

On the other hand, Malaysia has concentrated on diversifying its economy and infrastructure, resulting in a more sustainable property market. Ongoing projects such as the Mass Rapid Transit (MRT) lines in Kuala Lumpur and the expansion of the Penang International Airport are expected to increase occupancy rates, making Malaysia a more appealing market for property investors looking for stable, long-term returns.

Malaysia’s property market provides higher returns on investment than Thailand

When comparing return on investment (ROI) between Malaysia and Thailand, Malaysia once again emerges as the more favourable option. In Malaysia, average rental yields in prime areas like Kuala Lumpur range between 4% and 6%, according to Knight Frank’s 2023 report. In some high-demand districts, yields can even reach up to 7%, particularly for properties located near transportation hubs or within mixed-use developments. Additionally, Malaysia’s relatively low property prices compared to other Southeast Asian countries make it an affordable market for investors to enter, while still offering competitive returns.

Thailand still offers decent rental yields, but it generally lags behind Malaysia in terms of return on investment (ROI). In Bangkok, the average rental yields range from 3% to 5%, with higher yields in less saturated areas outside the capital. However, the long-term capital appreciation in Thailand has been slower due to market saturation and restrictions on foreign ownership. Specifically, areas like Phuket and Pattaya, once considered property hotspots, have experienced diminishing returns as new developments flood the market.

Furthermore, Malaysia offers a stable political environment and a solid legal framework for property ownership, providing additional security for investors. On the other hand, Thailand’s political landscape is periodically unstable, which can pose risks for property investors, especially in areas where foreign ownership laws are subject to change. Given Malaysia’s combination of favourable yields, affordable entry points, and political stability, it is the preferred choice for investors seeking consistent and high returns on investment.

The future outlook for Malaysia’s property market is more promising than Thailand’s

Looking forward, the property market in Malaysia is expected to grow more than in Thailand. Malaysia has established itself as a regional business center, drawing in multinational companies and expatriates. The government’s ongoing investments in infrastructure, such as the East Coast Rail Link (ECRL) and the Johor Bahru-Singapore Rapid Transit System (RTS), are anticipated to further drive property demand, particularly in major urban areas. These projects are projected to improve connectivity, making previously neglected areas more accessible and appealing to both local and international investors.

Thailand’s property market is at risk of stagnation due to overdevelopment in tourist-heavy areas and the country’s heavy reliance on the tourism industry. While Bangkok continues to be a thriving market, other regions like Phuket and Pattaya are dealing with oversupply and slow demand recovery. Additionally, Thailand’s aging population presents a long-term challenge, which could potentially reduce domestic demand for property in the future.

Malaysia has a younger population and proactive government policies that encourage foreign investment, creating a dynamic and resilient property market. The country’s economic diversity, focus on technology and business sectors, and commitment to sustainable development projects all indicate a bright future for its property market. For investors seeking long-term growth and stability, Malaysia holds far more promise than Thailand.

The post Why Malaysia is a better choice than Thailand for property investment: A Comparative Analysis appeared first on Rent & Returns.

Types of Loans Available

In Malaysia, term loans, semi-flexi loans, and full-flexi loans are different types of financing options that are available to individuals and businesses. Each type of loan has its own features and benefits, and it is important to understand the differences between them to make an informed decision when choosing a loan.

1. Term loans: Term loans are a type of loan where the borrower receives a lump sum of money that is repaid over a fixed period of time with interest. The interest rate is usually fixed for the entire duration of the loan, and the borrower is required to make regular repayments, usually monthly, until the loan is fully repaid. Term loans are ideal for businesses that need a specific amount of financing for a specific purpose, such as purchasing equipment or expanding their operations.
2. Semi-flexi loans: Semi-flexi loans are a type of loan that allows the borrower to make additional repayments to reduce the principal amount of the loan. This can help the borrower save on interest charges and pay off the loan faster. However, the borrower cannot withdraw any excess payments made. The interest rate for semi-flexi loans is usually variable, meaning that it can change based on market conditions. Semi-flexi loans are a good option for borrowers who want some flexibility in their loan repayments, but still want the security of a fixed repayment schedule.
3. Full-flexi loans: Full-flexi loans are a type of loan that offers the most flexibility to borrowers. With a full-flexi loan, the borrower can make additional repayments, withdraw excess payments made, and even reduce the loan tenure without any penalty. The interest rate for full-flexi loans is also usually variable. Full-flexi loans are ideal for borrowers who want complete control over their loan repayments and want the ability to make extra payments whenever they can.

Who are these different types of Residential Property Loans in Malaysia for?

1. Term loans:

• A property investor who needs to purchase a new property for their portfolio
• A homeowner who wants to renovate their property and needs a lump sum of money to pay for the renovations
• Someone who is buying their first home and needs a loan to finance the purchase

2. Semi-flexi loans:

• A homeowner who wants the flexibility to make larger loan payments when they can to pay off their loan faster without penalty
• A property investor who wants to reduce their overall interest charges by making additional loan payments
• Someone who has an irregular income and wants the flexibility to make larger loan payments during high-earning months and smaller payments during low-earning months

3. Full-flexi loans:

• A homeowner who wants complete control over their loan repayments and wants to be able to make extra payments whenever they can
• A property investor who wants to withdraw any excess payments made to their loan
• A self-employed individual or freelancer who has an irregular income and wants the flexibility to pay more on their loan during high-earning months and less during low-earning months.

It’s important to consider your individual financial situation and goals when choosing a property loan type. Each type of loan has its own benefits and drawbacks, and what works best for one person may not work as well for another.

Historical Data on Interest Rates

Historically, Malaysia’s interest rates have been relatively stable, with occasional fluctuations. The base rate, which is used by banks to calculate interest rates, stood at 3.25% in 2016. In 2018, it was raised to 3.5%, and in 2019, it was lowered to 3%. However, in 2021, due to the COVID-19 pandemic, the Overnight Policy Rate (OPR) was reduced to a record low of 1.75%.

Things have seemingly gone south since then however.

The rumbling crescendo of post-pandemic OPR hikes began on:
11 May 2022 with the first 0.25% increase which was followed by,
6 July 2022 – +0.25%
8 Sep 2022 – +0.25%
3 Nov 2022 – +0.25%

Bringing the entire hike to a total hike of 1%.

Might not seem like much but let me share why compounding though it is the magic of growth can also be a dark magic of decline.

Calculating loan repayments can seem complicated, but it’s actually a fairly straightforward process. Let’s take the example of a RM450,000 property loan in Malaysia to see how a 1% increase in OPR would affect the monthly repayments.

Seeing as how, as of February 2023, the OPR rate in Malaysia is 2.75%. If we take the example of a RM450,000 property loan and calculate how a 1% increase in OPR would affect the monthly repayments, here’s what we would find:

At the current OPR rate of 2.75%, the interest rate on a typical term loan would be around 5.15% per annum. Using this interest rate, the monthly repayments on a RM450,000 loan over a 30-year term would be approximately RM2,464.

If we compare this to pre-post-pandemic OPR hikes:
The monthly repayments based on the loan amount, interest rate, and loan tenure. For a loan amount of RM450,000 and a loan tenure of 30 years (360 months), the monthly repayment amount would be approximately RM2,186. A difference of RM278 per month.

The GOOD thing for now is that this is still relatively manageable whereas interest rates and repayments are concerned when compared to other property lending markets in the region. Also, historically, interest rates are still close to the lowest they’ve ever been. Lest we not forget that it was within most of our lifetimes that mortgage interest rates were double digits!

Why the Loan Environment is Going to Get Fugly

If the OPR rate were to increase by another 1%, the interest rate on the loan would also increase by 1%, to around 6.15% per annum. Using the new interest rate, the monthly repayments on the same loan would increase to approximately RM2,718. This is an increase of around RM254 per month, or around RM3,048 per year.

But what if the borrower had taken advantage of the 6-month moratorium on loan repayments offered by banks during the COVID-19 pandemic? In that case, the increase in monthly repayments would be even more significant. During the 6-month period, interest would have continued to accrue on the loan, but the borrower would not have been required to make any payments. This means that the outstanding balance of the loan would have increased, and the borrower would be paying interest on a higher amount.

Assuming the same loan of RM450,000 with a 30-year term and an interest rate of 5.15% per annum, the monthly repayment during the moratorium period would have been zero. However, at the end of the moratorium, the outstanding balance of the loan would have increased to around RM456,000. Using the new interest rate of 6.15% per annum, the monthly repayment on the loan would then be around RM2,997. This is an increase of around RM533 per month, or around RM6,396 per year, compared to the pre-moratorium payment of RM2,464 per month.

In conclusion, a 1% increase in OPR may not seem like a significant amount, but it can have a significant impact on monthly loan repayments, and the impact is even more pronounced if the borrower has taken a repayment moratorium. It’s important for borrowers to carefully consider the impact of potential interest rate changes when taking out a loan and to ensure that they are financially prepared for any changes that may occur in the future.

FAQs

Q: Is it better to take out a term loan or an Islamic loan?
A: It depends on your preference and beliefs. Term loans charge interest, while Islamic loans apply a profit rate. Both have their advantages and disadvantages.

Q: How can I find the right loan for my needs?
A: Do your research and compare loans from different banks. Look at the interest rates, repayment terms, and other fees.

Q: Will my interest rate go up if the OPR increases?
A: Yes, if the OPR increases, your interest rate will likely go up as well.

Conclusion

In conclusion, residential property loans in Malaysia are a complex and ever-changing landscape. With two main types of loans available, historical interest rate data, and potential OPR increases, it’s crucial to do your research and find the right loan for your needs. As interest rates are set to rise, the loan environment is set to get Fugly. Therefore, it’s important to consider the long-term impact of taking out a loan and plan accordingly.

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What is a Joint Management Body (JMB)?

A Joint Management Body (JMB) is a non-profit organization created to manage and maintain properties in Malaysia. JMBs are made up of representatives from the property owners and are responsible for managing and maintaining the common areas and facilities of the property, such as lifts, swimming pools, and security systems. JMBs also enforce the rules and regulations set by the government and the property owners.

In Malaysia, there is an organisation that supports JMBs – https://jmbmalaysia.org/

The Problems with Joint Management Bodies (JMB) in Malaysia

Joint Management Bodies (JMB) in Malaysia have faced several challenges and issues that have led to their failure to deliver effective property management. Some of these problems include:

• Lack of Professionalism and Experience
  Many JMBs lack the necessary skills and experience to effectively manage properties. This results in poor decision-making and the inability to handle complex situations, such as disputes and financial management.
• Corruption and Mismanagement
  There have been instances of corruption and mismanagement in JMBs, leading to the misappropriation of funds and poor maintenance of properties. This has resulted in a lack of trust among property owners and has contributed to the failure of JMBs.
• Inadequate Funding
  JMBs are often not provided with sufficient funding to carry out their duties effectively. This results in a lack of resources and the inability to maintain properties to a high standard.

In the lack of experience department I would really say that this is something super apparent when discussing banning Airbnb’s at their residences and why they all don’t seem to understand that this is not a good idea under most circumstances.

The Impact of Failed Joint Management Bodies (JMB) on Property Management The failure of Joint Management Bodies (JMB) in Malaysia has had a significant impact on property management in the country.

Some of these impacts include:

• Poor maintenance of properties and common areas
• Increase in property disputes
• Decrease in property values
• Inadequate security measures
• Lack of accountability and transparency

I have had many instances of dealing with these companies that have been extremely unpleasant. The average competency level of these organisational bodies is so low and widespread that if looked at on a growth map over time, it might possibly be mistaken for the ‘virus’ that brought the globe to its knees.

What Needs to be Done to Improve Joint Management Bodies (JMB) in Malaysia To improve the performance of Joint Management Bodies (JMB) in Malaysia, several changes need to be made.

These include:

• Increase in Funding
  JMBs need to be provided with sufficient funding to carry out their duties effectively. This will enable them to maintain properties to a high standard and provide adequate security measures.
• Professionalization of JMBs
  JMBs need to be professionalized to ensure that they have the necessary skills and experience to effectively manage properties. This can be achieved through training programs and the appointment of experienced professionals.
• Increased Transparency and Accountability
  JMBs need to be more transparent and accountable to property owners. This can be achieved through regular financial reports, meetings, and audits. This will increase trust and confidence among property owners and ensure that JMBs are managing properties in a responsible and effective manner.
• Government Intervention
  The government needs to provide more support and oversight for JMBs. This can be done through the creation of laws and regulations that ensure the proper functioning of JMBs and provide for consequences for mismanagement and corruption.

FAQs:

Q: What is the purpose of Joint Management Bodies (JMB) in Malaysia?
A: Joint Management Bodies (JMB) in Malaysia were established to manage and maintain properties, including condominiums, apartments, and housing estates. JMBs are responsible for managing and maintaining common areas and facilities, enforcing rules and regulations, and ensuring the efficient functioning of the property.

Q: What are some of the problems faced by Joint Management Bodies (JMB) in Malaysia?
A: Joint Management Bodies (JMB) in Malaysia have faced several challenges and issues, including lack of professionalism and experience, corruption and mismanagement, and inadequate funding. These problems have led to the failure of JMBs to deliver effective property management.

Q: What is the impact of failed Joint Management Bodies (JMB) on property management in Malaysia?
A: The failure of Joint Management Bodies (JMB) in Malaysia has had a significant impact on property management in the country, including poor maintenance of properties, increase in property disputes, decrease in property values, inadequate security measures, and lack of accountability and transparency.

Conclusion:
In conclusion, Joint Management Bodies (JMB) in Malaysia have been a failed approach to property management. This is due to the challenges and issues faced by JMBs, including lack of professionalism and experience, corruption and mismanagement, and inadequate funding. To improve the performance of JMBs, changes need to be made, including increased funding, professionalization of JMBs, increased transparency and accountability, and government intervention. It is essential that these changes are implemented to ensure that JMBs are able to provide effective property management and maintain the high standards of living in Malaysia’s residential properties.

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I’ve already talked about the new regulations that were proposed end 2019 in my post in 2020 – here.

The association is also concerned about Airbnb’s impact on the budget hospitality industry. One of the main concerns is that they say, Airbnbs are not subject to the same regulations and taxes as hotels, giving them an unfair advantage. This can make it difficult for budget hotels to compete with the low rates offered by Airbnb hosts. Furthermore, many Airbnb hosts are not registered or licensed as hotels and have the same safety and quality standards as hotels. The association argues that it is not a target for tourists and may cause concern for travelers.
Another concern of the association is that Airbnb could contribute to an oversupply of accommodations in some areas, leading to lower room rates and lower occupancy rates for budget hotels. This can make it difficult for budget hotels to operate profitably and reduce the quality of service they provide.

[Check out this post on 3 Reasons Why You Don’t Want to Ban Airbnb in your Building]

Have we not heard these same cries before however?

It sounds so reminiscent of the early days of Grab and the taxi driver crying foul.

The same rhetoric is being applied here.

The question is why?

It is a concern of services by the customer on where they can get their best value for their money and if it is shifting away from budget hotels because there is a better alternative providing more value, the market is telling us all something – one option is failing to adapt and rise to meet the changes taking place in the industry.

Isn’t this the same reason Taxi services are now so much better than they were before? I’m sure we all don’t miss pulling a taxi over to tell them your location and then see them drive off because you didn’t agree to their off-meter rate or you didn’t happen to be going where they wanted to.

If you think about your last budget hotel experience and your last Airbnb experience, which one was better? Was it like your last taxi ride before Grab came into the picture?

I’m sure majority of us would have far better memories at our Airbnb, I certainly do.

If the rise of Airbnb and Grab are paving the way for better customer experiences another option for inbound travelers into the country, it needs to be seen as something that is good. Old ways of business need to evolve and adapt to meet these new challenges in everyone’s favourite new-normal.

Why not say, “What can we do better?”, “Why are more young people keen on Airbnbs instead?”, “What can we offer to be more competitive?”. “What have guests been saying about my hotel?”

Stop thinking like a dinosaur and remember how it was when you were the radical, fighting to build your business. Look within and let the answers reveal themselves to you. Evolve and bring something new to the table. Budget hotels still do exist around the world just like Taxis. There’s enough market share for us all so long as we just keep striving to all do better for our guests.

Airbnb has revolutionized the way people travel, creating a platform that allows people to experience local
cultures and communities in unique and authentic ways. Ensuring the continued operation of Airbnb in Malaysia is a great way to boost tourism in 2023. Here are some reasons:

More lodging options: Airbnb offers lodging alternatives to traditional hotels and resorts. This allows tourists to choose from more options and cater to a wider range of budgets. This increased diversity of accommodation can attract more tourists to Malaysia.

Cheap: Airbnbs are usually cheaper than hotels or match prices close to budget travelers. This is especially attractive to the younger market, who are most likely to use Airbnb and not want to stay in a budget hotel.

Engage with locals: Airbnb gives visitors the chance to live like a local and promotes engagement with local communities. This provides tourists with a more authentic travel experience and promotes local culture and traditions.

Boosting the local economy: Enabling Airbnb to operate in Malaysia also boosts the local economy. Airbnb hosts are often locals who benefit from the extra income they earn by renting out their properties.  This will also increase employment for local residents, such as cleaners, maintenance workers, hospitality graduates and property managers.

Greater flexibility: Airbnb hosts have the flexibility to set their own rates and availability so they can adapt to market conditions and maximize profits. This allows us to offer our guests a more personalized and unique experience.

More Inbound Tourists: Airbnb is a great way to boost Malaysian tourists. Increasing the available accommodation options can attract more tourists to Malaysia. This will also be a platform for local hosts to share their culture and lifestyle with tourists.

I believe many of us are just getting back on our feet and still trying to recover from the past two years and that we are also entering a new period of recession, we should not be penalising those who are innovating and adapting to create businesses that provide new experiences for tourists in Malaysia and jobs for Malaysians. I believe all operators welcome some form of regulations so that the industry standard can improve but nobody wants anything that would impose heavy uncecessary operational expenses simply to favour budget hotels. I would hope that the new government under DSAI does not simply accede to these petty cries from people who are providing sub-standard services and refusing to admit that the first place to look when things aren’t going right, should always be – in the mirror.

The post MyBHA on STRA Regulations: Why Not Evolve Instead? appeared first on Rent & Returns.

Tan Sri Dato’ Sri Leong has been instrumental in the growth and success of the company over the years.

Tan Sri is a well-known figure in the Malaysian business community and has a wealth of experience in the property development industry. He started his career in the construction industry before venturing into property development in the early 1990s. Under his leadership, Mah Sing Group has grown to become one of the leading property developers in Malaysia, with a reputation for delivering high-quality and innovative projects. He is also a board member of various organizations such as the Malaysia-China Business Council, the Malaysia-Singapore Business Council, the Real Estate and Housing Developers’ Association (REHDA) and the Malaysia-Thailand Business Council. He holds a Bachelor of Science in Civil Engineering from the University of Western Australia.

[MyBHA on STRA Regulations: Why not Evolve Instead?]

Tan Sri is also actively involved in philanthropic activities, he has established the Mah Sing Foundation, which focuses on helping underprivileged communities and promoting education and healthcare and is also a recipient of various awards, including the prestigious Entrepreneur of the Year award by Ernst & Young in 2005 and the Most Promising Entrepreneur award by the Malaysia-China Business Council in 2000.

Throughout its history, Tan Sri Leong has made sure that Mah Sing Group has focused on developing a diverse portfolio of properties that includes residential, commercial, and industrial developments. Some of the company’s early projects include residential developments in Selangor and Kuala Lumpur. Over the years, the company has expanded its reach and has developed projects in other states in Malaysia, such as Johor, Penang, and Sabah.

The company has also been recognized for its achievements in the industry, winning multiple awards for its projects, including the Best Developer award from the Real Estate and Housing Developers’ Association (REHDA) and the Best Affordable Housing award from the Malaysia Property Awards.

In addition to its property development business, Mah Sing Group also has a strong presence in the manufacturing and construction industries. The company operates a manufacturing division that produces a range of products such as ceramic tiles, sanitary ware, and steel structures. The company also has a construction division that provides construction services for its own developments as well as for third-party clients.

Mah Sing Group is one of the leading property developers in Malaysia, with a reputation for delivering high-quality and innovative projects. The company has a diverse portfolio of properties that includes residential, commercial, and industrial developments.

We will now take a look at some of Mah Sing’s past successful projects.

[How to find below market rental properties in Malaysia?]

One of Mah Sing’s most successful past projects is the M Residence in Kuala Lumpur. This development, which was completed in 2017, comprises of two towers of serviced apartments and a retail podium. The M Residence is located in the heart of the city and offers residents easy access to a wide range of amenities and public transportation. The project was well-received by the market and the units were fully sold out.

Another successful project by Mah Sing is the Meridin East in Johor Bahru. This development, which was completed in 2018, comprises of condominiums and semi-detached houses. The Meridin East is located in the heart of Johor Bahru, and offers residents easy access to a wide range of amenities and public transportation. This project was also fully sold out.

[Comparing the developments in KL Sentral – Review of Riviera City]

Here are some of the company’s completed developments:

Residential:

• M Residence, Kuala Lumpur
• Meridin East, Johor Bahru
• Ferringhi Residence 2, Penang
• Icon Residence, Mont Kiara
• The Meridin@Medini, Johor Bahru
• The Meridin Suites, Johor Bahru
• The Meridin, Johor Bahru
• The Meridin, Kuantan
• The Meridin, Penang

Commercial:

• M City, Kuala Lumpur
• M-City Commercial Center, Kuala Lumpur
• M-City Shop Offices, Kuala Lumpur
• M-City Sky Office, Kuala Lumpur
• M-City Corporate Tower, Kuala Lumpur

Industrial:

• M-City Industrial Park, Selangor
• M-City Logistics Hub, Selangor
• M-City Industrial Park 2, Selangor

You can find out more about Mah Sing’s upcoming projects on their website – https://www.mahsing.com.my/projects/

The post Developer Focus: Mah Sing Group appeared first on Rent & Returns.

Well, it seems that its because it is somehow in our blood. Ingrained into our systems that these concrete blocks and spaces of land (or air) are symbols of wealth and prosperity.

Let’s take a look at the reasons why we feel this way.

Is it simply rooted in superstition or have the numbers proven themselves to us once again?

Malaysia has maintained a stable political and economic climate over the past 50 years, which has contributed to the steady growth of its real estate market. Additionally, the government is taking steps to encourage homeownership and stimulate the construction industry, further boosting demand for real estate. In addition, the country’s strategic position in Southeast Asia and its focus on developing industries such as tourism, manufacturing and services also attract foreign investment.

According to a National Property Information Center (NAPIC) report, the entire Malaysian property market has seen steady growth in value over the past 50 years. According to the report, the average price of residential property in Malaysia increased by an average of 6.5% annually from 1970 to 2019. Additionally, the report finds that the total transaction volume of the real estate market has steadily increased over the years.

Malaysia’s stable political and economic climate, government policies, strategic location and growing industries have contributed to the continuous growth of the real estate market over the past 50 years, making it a good investment opportunity.

Malaysia has many residential estates that have been considered excellent investments over the last 50 years. Some examples are:

Mont Kiara: An upscale neighborhood in the city of Kuala Lumpur known for its luxury condominiums and apartments. Real estate in this area has greatly increased in value over the years and remains in high demand.
Tropicana: An apartment complex in Petaling Jaya on the outskirts of Kuala Lumpur. The development consists of a mix of plots and high rise condominiums. Real estate in this area has also increased in value year by year and is still in high demand.
Penang Island: Located in the northern part of Penang, this island is known for its heritage, beaches and delicious food. Real estate in this area has also increased in value year by year and is still in high demand.
Subang Jaya: A suburb of Kuala Lumpur known for its affordable real estate, good infrastructure and easy access to public transport. Real estate in this area has also increased in value year by year and is still in high demand.

In general, the ROI for Malaysian real estate is between 5% and 10% per year, but it can be higher or lower in certain areas and for certain properties. This of course does not mean that you’re guaranteed to even see such returns immediately year on year, it often takes time as the prices go through the cycle with price increments being seen over the course of 5 – 10 years. Overall, Malaysia is a good market for property investment, with many outstanding residential developments proving its resilience.

Even though these are not phenomenal returns but it that still makes property investing here not a bad store of wealth. It’s what we as a people regard as a ‘Safe’ investment.

Many property moguls have been born over our lifetimes and they have established themselves fiercely in the industry. Some of the most successful property billionaires are listed below:

Tan Sri Lim Goh Tong (deceased) – businessman and entrepreneur, founder of Genting Group. He was known for his investments in hotel and gaming industries and real estate development. He died in 2007 at the age of 88. His estimated fortune was in the billions.

Tan Sri Lee Shin Cheng– He is the current CEO of IOI Corporation, a large multinational company based in Malaysia. He is known for his investments in real estate development and the oil palm plantation industry. He’s 84 now and has an estimated net worth in the billions

Tan Sri Dato ‘Sri Leong Hoy Kum – He is the founder and chairman of Country Heights Holdings Berhad (and Mah Sing too), one of Malaysia’s largest property developers. He is known for his investments in real estate development and hospitality. He’s in his 80s now and his estimated net worth is in the billions

Tan Sri Dato’ Sri Liew Kee Sin – He is the founder of property developer GuocoLand. He is known for his investments in the real estate development industry. He’s in his 70s now and his estimated net worth is in the billions.

It’s hard to not still be in love with property despite the on-going mass building and oversupply and being knee-deep in a depression of modern times but we see what can be achieved by others and that is success for the best of the best. Surely the average property investor can carve out a nest egg for themselves at the very least.

That’s what I believe and that’s what’s the truth as far as I can tell.

Property investing still is within reach to us in the M40.

Owning real estate is considered important to many Malaysians for many reasons. First, cultural values play an important role in this regard. In many Asian cultures, owning a home is seen as a sign of stability and success, and is often seen as an important life goal. As Malaysian’s we see property ownership as a symbol of achievement and also as a way to pass wealth on to future generations.

Second, owning real estate gives you financial security. Real estate is considered a tangible asset that increases in value over time and can be sold or rented for additional income. It is also seen as a form of saving and investment for the future. In this way, owning property helps bring financial stability and security to the owner and their families.

Third, owning property also provides emotional and psychological benefits. It can instill a sense of belonging and pride in ownership, and it can instill a sense of security, peace of mind, and a sense of control over one’s living environment. Overall, property ownership is considered important to us for its cultural value, financial security, and emotional benefits.

I guess that means that it’s a little bit of superstition on the back of some decent facts and figures.

The post Why are Malaysians Hooked on Property Investing? appeared first on Rent & Returns.

Deposits and Recurring Costs

When renting a property in Malaysia, there are several costs to consider, including deposits and recurring costs. The deposit, also known as the security deposit, is typically one month’s rent and is used to cover any damages to the property at the end of the tenancy. In addition to the deposit, renters will also be responsible for paying recurring costs such as utilities (electricity, water, and internet) and any maintenance fees.

It’s important to note that the deposit and recurring costs may vary depending on the type of property and location. For example, a luxury apartment in a prime location may have a higher deposit and recurring costs compared to a basic apartment in a less desirable area.

When calculating the deposit and recurring costs, it’s important to factor in any additional expenses such as parking and storage fees. In addition, renters should also be prepared for additional costs such as moving expenses and furniture rental.

To ensure that you have enough money for the deposit and recurring costs, it’s important to budget accordingly. This includes setting aside money for the deposit and recurring costs as well as any additional expenses.

[Find out more about Property Taxes in Malaysia here]

Tenancy Agreements and Responsibilities

Before moving into a rental property, renters will be required to sign a tenancy agreement. This document outlines the terms of the tenancy, including the rental amount, deposit, and recurring costs. It also outlines the responsibilities of the tenant and the landlord.

As a tenant, it is important to fully understand the terms of the tenancy agreement before signing. This includes understanding your responsibilities as a tenant, such as keeping the property in good condition and paying rent and bills on time. It’s also important to note that in Malaysia, tenancy agreements are typically for a fixed term of 12 months. After the initial 12 months, the agreement may be renewed for another fixed term or converted to a month-to-month tenancy.

It’s also important to be aware of your rights as a tenant. This includes the right to a safe and habitable living space, the right to privacy, and the right to receive proper notice before the landlord enters the property.

When signing a tenancy agreement, it’s important to review the document carefully and ask any questions that you may have. This includes reviewing the terms of the agreement, such as the length of the tenancy, the rental amount, and any additional fees.

Maintenance and Repairs

As a tenant, it’s important to keep the rental property in good condition. This includes regular cleaning and maintenance, as well as reporting any repairs that are needed.

The landlord is responsible for making any repairs that are needed to keep the property in a safe and habitable condition. This includes repairs to appliances, plumbing, and electrical systems.

If repairs are needed, it’s important to contact the landlord as soon as possible. The landlord is required to make the repairs in a timely manner and should provide an estimated completion date.

If the landlord fails to make the repairs, the tenant has the right to file a complaint with the local housing authority. The housing authority will then investigate the complaint and take appropriate action.

Ending the Tenancy

When the tenancy comes to an end, the tenant is responsible for vacating the property. This includes removing all personal belongings and cleaning the property.

The tenant should also provide the landlord with a forwarding address so that the deposit can be returned. Before vacating the property, the tenant should also arrange for a final inspection with the landlord. This is to ensure that the property is in the same condition as when the tenant first moved in.

The landlord will then conduct a final inspection and determine if any damages were done to the property. If damages were found, the landlord has the right to deduct the cost of repairs from the deposit. The deposit will then be returned to the tenant minus any deductions.

It’s important for the tenant to understand the terms of the tenancy agreement regarding the return of the deposit. This includes understanding any deductions that may be made and the time frame for the return of the deposit.

In addition to vacating the property, the tenant should also cancel any utilities and services that were set up in their name. This includes electricity, water, internet, and cable services.

Conclusion

Renting a property in Malaysia can be a complex process with many legal requirements and costs to consider. However, by understanding deposits and recurring costs, tenancy agreements and responsibilities, maintenance and repairs, and ending the tenancy, renters can navigate the process with ease.

[Find out how to Terminate your TNB here]

It’s important for renters to budget accordingly, fully understand the terms of the tenancy agreement, maintain the property, and understand their rights as a tenant. By following these guidelines, renters can ensure a smooth rental experience and secure the return of their deposit at the end of the tenancy.

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The Importance of Property Defect Checking

When you purchase a new home, it is important to have it inspected for any defects that may have been missed during construction. These defects can range from minor cosmetic issues to serious structural problems that could impact the safety and stability of your home. If left unchecked, these issues can cause major headaches down the road, such as costly repairs and even potential safety hazards.

That’s why many experts believe that private residential property defect checking is a necessity, not a scam. By having your home inspected, you can ensure that all the necessary repairs are made before you move in, giving you peace of mind and saving you time and money in the long run.

But are they really right?

Is it such a technical job that can’t be done by oneself?

[See what I think about MyBHA’s statement on STRA Regulations]

The Risks of Skipping Property Defect Checking

While some people may see private residential property defect checking as an unnecessary expense, it should not be a consideration to proceed with skipping this step. For example, if you move into a home without having it inspected, you may not be aware of any hidden defects that could cause major problems down the road. This could result in costly repairs, safety hazards, and even potential lawsuits if someone is injured as a result of a defect that you should have been aware of.

But within reason…

There is NO need to be obsessive about your defects and check everything with a magnifying glass and litmus paper. Doing this is a recipe for disaster and will incur you thousands of ringgit in losses as you wait patiently for the developer to work on your defect list which may be up to 2 months in some cases.

Look out for things that the developer can attend to quickly and that is high cost. If you can resolve something more quickly on your own, think about how much money you can save by getting to work on your cheaper defect issues yourself and getting a tenant in a month earlier.

Doing Your Own Property Defect Checking

If you are on a tight budget or you feel like you are a capable individual who can take care of things on his own, you can still take steps to ensure that your new home is free of defects. One way to do this is by following a simple property defect checking checklist. This checklist will help you identify any potential issues that need to be fixed, giving you peace of mind and helping you avoid any major problems down the road.

[How much does renovation and maintenance cost in Malaysia?]

Property Defect Checking Checklist

To help you get started with your own property defect checking, here is a simple checklist that you can use:

1. Check the walls, ceilings, and floors for any cracks, holes, or other signs of damage.
2. Inspect the electrical and plumbing systems, looking for any signs of leaks, damage, or other issues.
3. Check the windows and doors for proper operation, including the locks and hinges.
4. Look for any signs of water damage, such as water stains on the walls or ceiling.
5. Inspect the roof, looking for any signs of damage or leaks.
6. Check the foundation and walls for any cracks or damage.
7. Inspect the air conditioning and heating systems, making sure they are functioning properly.

By following this simple checklist, you can ensure that your new home is free of any major defects, giving you peace of mind and saving you time and money in the long run.

Conclusion

In conclusion, private residential property defect checking can be a scam or a necessity, depending on the situation. On one hand, the process may seem like a waste of money, as it only delays the handover of the property and causes you to pay back your housing loan without income. On the other hand, it is essential to ensure that the property is free from defects and is in a good condition before you make a significant investment.

The best way to ensure that your property is free from defects is to do the defect checking yourself by following a simple checklist. This will give you peace of mind and ensure that you do not fall victim to unscrupulous contractors who may try to scam you. The checklist should cover all the important areas of the property, such as the electrical system, plumbing, flooring, and walls..

So, instead of relying on private property defect checking companies, it is best to take matters into your own hands and do your own inspection. By following the simple checklist mentioned above, you can ensure that your property is free from defects and is in a good condition before you rent it out.

The post Property Defect Checking: Scam or Necessity? appeared first on Rent & Returns.

The History of Homestays in Malaysia

Homestays have been a traditional form of accommodation in Malaysia for many many years. They are a great way to immerse oneself in the local culture, experience the way of life in a different country, and make new friends. In the past, homestays were usually arranged through local travel agencies or by word of mouth, but in recent years, they have evolved into a more sophisticated form of accommodation.

The Rise of Vacation Rentals in Malaysia

The advent of platforms like Airbnb has modernized the homestay industry in Malaysia, providing travelers with a wider range of options for their accommodation needs. Today, there are hundreds of vacation rental properties available in Malaysia, from luxurious apartments in the city center to cozy homes in the countryside. Vacation rentals provide travelers with the comfort and convenience of home, as well as the privacy and independence that are not available in a hotel.

How Airbnb has Modernized the Industry

Airbnb has played a significant role in modernizing the vacation rental industry in Malaysia. The platform has made it easier for travelers to find and book properties, and for property owners to rent out their homes. Airbnb has also introduced new standards for quality and safety, which has helped to improve the reputation of the vacation rental industry.

The Impact of Airbnb on the Property Overhang in Malaysia

One of the biggest challenges facing the property market in Malaysia is the overhang of unsold properties. However, the rise of vacation rentals has helped to alleviate this problem by providing a new source of income for property owners. Airbnb has provided property owners with an opportunity to rent out their unused properties, thereby generating additional revenue that can help to offset the cost of ownership.

The Future of Vacation Rentals in Malaysia

The vacation rental industry in Malaysia is thriving, and it is only going to continue to grow in the years to come. With the help of platforms like Airbnb, vacation rentals have become a popular and convenient option for travelers, and it has provided property owners with a new source of income. The future of vacation rentals in Malaysia is bright, and it will continue to evolve to meet the changing needs of travelers and property owners alike.

The post Vacation Rentals in Malaysia: The Modern Homestay appeared first on Rent & Returns.

Step 1: Research the Market

Before you dive into buying an auction property in Malaysia, it is crucial to research the market. This includes understanding the types of properties that are being auctioned, their locations, and the prices. You should also research the companies that carry out property auctions in Malaysia and the websites that list auction properties. Some popular websites to keep in mind include Auction.com.my and iBid.my.

Step 2: Register for the Auction

Once you have identified the property you are interested in, the next step is to register for the auction. During the registration process, you will be required to provide your personal and financial information and make a deposit to secure your participation in the auction. The deposit is usually non-refundable and is intended to show that you are serious about bidding on the property.

Step 3: Inspect the Property

Before the auction day, it is essential to inspect the property to determine its condition and value. This will help you make an informed decision about your bidding strategy and determine how much you are willing to spend. If you prefer, you can also hire a professional inspector to evaluate the property and provide you with a report on its condition. Do take note that you are normally unable to access the auction property prior to owning it. It is somewhat of a lucky draw. Unlike with new properties whereby you are able to do a defect check yourself.

Step 4: Prepare Your Bid

Before the auction, it is important to prepare your bid by determining the maximum amount you are willing to spend on the property. This should take into consideration any additional costs that may be associated with purchasing the property, such as legal fees, stamp duty, and transfer fees. It is also crucial to consider the hidden costs, including repairs and maintenance. You will need to submit the down payment for the property you are intending to bid at when you go for these auctions.

Step 5: Attend the Auction

On the day of the auction, it is crucial to attend the event and bid on the property. The bidding process can be intense, so it is important to stay focused and be prepared to make quick decisions. Keep in mind that you will be bidding against other buyers, so you need to be confident in your bidding strategy.

Step 6: Complete the Purchase

If you are successful in winning the auction, the next step is to complete the purchase by paying the full purchase price and any additional costs. You will also need to sign the contract and transfer the property into your name.

Real-life Example

Suppose you have found a property that you are interested in bidding on in an auction in Malaysia. After conducting research, you have determined that the property is a three-bedroom apartment located in Kuala Lumpur and the estimated market value is MYR 500,000. During the auction, you successfully win the bid with a bid of MYR 450,000. To complete the purchase, you will need to pay MYR 450,000 as the purchase price, plus approximately MYR 10,000 in legal fees, MYR 10,000 in stamp duty, and MYR 5,000 in transfer fees, bringing the total cost to MYR 475,000.

Conclusion

In conclusion, buying an auction property in Malaysia can be a great opportunity for buyers looking for a good deal. By following the steps outlined in this guide, you can increase your chances of success and find the perfect property to meet your needs. Remember to conduct thorough research, prepare your bid, and be prepared for any additional costs. Good luck!

The post How to Buy an Auction Property in Malaysia: A Brief Guide appeared first on Rent & Returns.