Property investment: Is it still worth it?June 26, 2020
Most property buyers have the same question on their mind – is this the right time to buy it? Let’s get this clear first, any time is a good time if you are talking about buying a property to stay in yourself. For investment purposes, however, it is a little different. Before we move on about answering the big question, let’s take a look at the different types of property investments first.
Usually, property investment commonly falls down to either residential or commercial properties. The main difference between both is the type of property title that they hold. Residential properties include units like terrace houses, apartments, condominiums and what not while commercial properties include shop lots, office buildings and retail lots.
Mainly, investing in either residential or commercial properties are divided into rental gains and appreciation value. Through rental gains, you earn a small portion of the total property as rentals. Commercial properties usually benefit more from this as it is common to have multi-year leases and contracts. Commercial property tenants are also less likely to change regularly as businesses stay rooted.
For residential properties, the main advantage over here is better financing options of up to 90%. Commercial properties require higher capital investment as financing is usually around 70% to 80% only.
Going back to the question of is it worth it, property investment in Malaysia is a bit different. As opposed to timing, location seems to play a bigger factor. While everyone keeps on saying that the property bubble is going to burst soon, it has not happened. So rather than waiting while prices keep on increasing, the best time to invest is always now. The answer is “Yes” if you are asking whether it is still worth it.
A few things to keep in mind, however, it depends on rental yields as the main ROI is not as feasible anymore. As property supplies increase, rental yields have been stagnant or even decreased in some areas. Major cities like Kuala Lumpur, Georgetown and Johor Bahru are your best bet when it comes to location.
These major cities are the ones that have the highest potential for appreciation value. However, risks are always present in any form of investment. Just like picking your stocks, you should be careful in choosing your investment property in Malaysia. Do your homework and check not just the property that you are eyeing, but also the surrounding development.
Property investment nowadays is a little bit more complex with plenty of factors to consider. However, making the right choice often depends on whether you have done enough research on your part. With the market constantly being supplied with new projects, buyers will almost never run out on good investment opportunities.
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