My colleague bought a new property recently and told me that he has a good deal. I asked him why. He said he bought it for just RM240,000 but rental can be as high as RM1,300 per month. It got me interested and I asked for the name and I did some checks online. It seems that what he said is true and for those who wants to buy to rent out, this may be a property which you may want to consider. Further checks reveal that the there is a cemetery just beside which explains why the price has not spiked like many other condos which rental are also within the rental range of RM1,300. One example, Pangsapuri Menara Manjalara. However, all other points are favourable. For example: near to KTM station, near to schools, near to hypermarkets. Then, again these days, majority of all apartments / condos are near to hypermarkets. 🙂
From the above, we can see that the price of the condo is low enough so that the rental yield should still be positive. For those who are questioning if the price would increase further, let me tell you objectively that the price will continue to increase if the rental continue to be strong or increase. In fact, the choices are not that many for properties below RM300,000 and still giving RM1,300 rental. Also, secondly, considering the price goes up by just the same inflation rate per year of 3%, if the price is RM240,000, then the yearly increment is RM7,200. Three years later, the increment would have almost equalled your 10% downpayment. This gives you a simple ROI of 30% per annum if you sell three years later. It is indeed a good buy. I agree with my colleague.
I am very sure there are other opportunities in the market. We just need to be slightly more hardworking and conduct checks online for rental and then use the information to find apartments / condos to buy. Happy buying and renting.
written on 11 Jan 2014
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