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Education and Property Investment can be the same theme.

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Tertiary education is compulsory

Could we afford NOT to graduate with a tertiary qualification today and in the future? When I started my career in 1998, I had a basic Degree. I joined a Japanese multinational company and was immediately given a job grade which was 2 levels above my senior who had just a diploma. My senior colleague had joined the organization 4 years before me but he will never be an assistant manager before me. That was in 1998 when Malaysians with a degree were far fewer than today. Today, many jobs are not available to Malaysians without tertiary qualifications. In some companies, promotion opportunities are limited due to the tertiary qualification requirements too.

Statistically speaking

Look at the tertiary school enrollment in Malaysia from 1979 until 2016. During my time, the total enrolment was slightly above 10%. Today it’s already over 40%, perhaps even higher. I could not imagine what happens in the future if someone does not have a tertiary education.

Source: https://www.theglobaleconomy.com/Malaysia/Tertiary_school_enrollment/

By the way, enrolment does not mean one will graduate. Nevertheless, assuming 50 percent of those enrolled actually graduate, then the percentage gets lower. In 2016, this enrollment had reached 45 percent. Using the same calculation, the total graduates with a minimum Diploma in Malaysia will be easily close to 30% today.

Education is evergreen

As a parent to two young kids, I know I will have to ensure they have the best possible start in their career lives and the foundation is a basic degree, just like me. As a working professional, I continued with my MBA because I know that competition will always keep growing. This is why education will be an evergreen industry. How do we take advantage of this fact?

Investing into education

When I was still a student, I stayed in a purpose-renovated double storey landed home. There were no fewer than 10-12 students in that home which we share with the owner and his family. So, one landed home could fit 20 people or more. Is this legal? That’s another story. How about looking at 4 key aspects when it comes to investment into a development with education element today?

  1. Proper University Suites – we could definitely still buy into a double-storey landed home and renovate it extensively so that it could fit 20 people or more. However, why not invest into proper university suites instead? Purpose-built accommodation for students of today.
  • Parents – I am not sure about other parents but if my kids are in the university, I will not feel they are safe if they are to stay in one home with 20 other kids. The probability for unfortunate incidents or accidents is certainly higher.
  • Authorities – When there are insufficient number of accommodation for students, the enforcement will take a little more time. However, as soon as there are now proper accommodation for students, we can rest assured that any existing regulations must be enforced.
  • University itself – How many universities love to go to an education fair and when asked about accommodation replies this, “students in our universities could stay in a landed property with 20 plus other students.” Or would they prefer this, “Our students are housed in proper student suites with access to facilities and within less than 1km away from the university.”

Choosing the better universities as a foundation

When we scan the market for developments with education elements, we could find many such projects. Many provide attractive returns but actually one major decision must be on the university itself. Is the university recognized as a industry leading one? Or is it just another small college? Or is the university very new and we are not sure if it will be around for the next 10 years?

It’s good to look at some rankings as a quick guide. For example, if we refer to the Times Higher Education World University Ranking (THE), we could see that among the top 8 universities in Malaysia, three are private universities. Namely Universiti Tunku Abdul Rahman or also known as UTAR (ranked 2nd), Universiti of Petronas (ranked 3rd) and Universiti Tenaga National (ranked 8th). A ranking of 501 – 600 in the world for UTAR is an achievement. This is recognized as top 2% of all universities worldwide.   

As a parent, I will definitely want my children to graduate from a good university. UTAR is qualified as one.

UTAR as a campus

From its humble beginnings, UTAR is now a university for 24,000 students. It is now attracting good students from all over Malaysia and this is a testament that students are choosing it because of quality instead of loving to study in a small town like Kampar.

UniSuites Kampar as a choice

Buyers will get to enjoy top notch facilities and the development is managed by Rahim & Co which is a famous project management company. UniSuites is 750m away from UTAR campus. Beyond these, the buyers will be buying a unit with move-in condition. No more hassle of getting it renovated for example. All the units are based on suites design which meant that the target tenants; students will find it comfortable while offering privacy. Last but not least, the whole development will be covered by FREE WI-FI too.

Continuous Return on Investment and Potential Capital Appreciation

With the increasing student population, the rental income will continue with each passing year. Due to the low entry property price of just RM87,200 the total downpayment needed may only be RM18,000 (20% of price).  Assuming a price increase of just RM1,800 per year already gives buyers a return of 10% based on their investment. RM1,800 (return) / RM18,000 (investment). Property investment is always a slow process but the returns over many years will likely be very attractive because the capital appreciation is based on the property price and not based on the down payment a buyer paid.

Interest buyers should drop by the UniSuites KL Sales Gallery to understand more. It’s a must to do proper due diligence before buying. Else, drop your contact below for further explanation. Cheers.

    written in collaboration with UniSuites Kampar.

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    <Featured Image is courtesy of Stock Photos from Kwang Chun Gan>

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