Rent to Own scheme to be financed by foreign investors

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If buyer is not able to buy a unit, it’s still a great option to consider Rent-to-Own (RTO) units instead of just renting and paying for nothing. I am serious with this suggestion yeah. Perhaps the only issue would be the availability of these units because most of the time, the developer will be the one offering it. Thus, it may not be viable for the number of units to be very high and may be units which are not that popular.

If the government is the one offering it, they will need to find the funds to fund this scheme. I am also worried with the collection of these rentals and the financial risks involved because at the end of the day, the government or even the ministry may not have the right people or team to handle it. Perhaps it’s best to engage external parties to assist in this instead.

Article in themalaysianreserve.com Housing and Local Government Minister Zuraida Kamaruddin said Putrajaya is in talks with a few foreign agencies to secure new financiers for the housing scheme by year-end. “We are currently talking to foreign investors to see whether they want to come into the RTO scheme and assist us by being the financier,” said Zuraida. Zuraida said she may join Prime Minister Tun Dr Mahathir Mohamad’s visit to Beijing scheduled at the end of April and engage with prospective parties from the country to get three to four RTO financiers.

She further said the RTO financing agreements are targeted to be signed this year, but will be implemented early 2021 as the first housing project under the new National Housing Policy would be completed in the next three years. She said the RTO financing scheme may be expanded and offered to current existing units. According to Zuraida, big data technology will play key roles in determining the right supply and demand, pricing and demographics of the locations. Article in themalaysianreserve.com

Let’s wait for more detailed announcements after the China visit. What is sure is that the more players we have for RTO schemes, the better it will be for Malaysians needing a home. Let’s not have a situation where there are not many choices and there’s no competition amongst these RTO financiers. Just like many, I believe fair competition will bring the best out of all stakeholders. With good experience, these financiers may also be able to handle the many issues that may come with RTO schemes yeah. Including the refusal to pay rental for example… Happy understanding that it’s not just lowering the standards for buyers to get their loans approved. It could actually be RTO scheme which gives all the buyers a chance to get the ‘trust’ they need from banks before the banks lend to them a few years later.

written on 22 April 2019

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

Next suggested article: Renting is fine, make plans to get your own

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