An old friend who just learnt that I write daily asked this question which has been asked to me around 187 times. (just joking, many times but no idea actual number of times). She asked, “Is this XXXXX area worth buying?” The question is so simple, just one line. The answer can also be simple, right? So, I answered in one line too. “If you like the area, love the design and could afford the property, then perhaps it’s a buy.” Actually, I wanted to answer with many more questions.
Many times, the answer is with us, not with some old friend or even our best friend. Come on, the one who’s buying and taking up a loan of a few hundred thousand is us. We buy based on our own WHYs. Not following what some other people think and we ended up spending a few hundred thousands of ringgit based on a one line question from us and a one line answer from them. Sorry yeah, it’s not an answer which you need. It may just be questions instead.
Are we buying a place for own stay or for renting out? Buying for own stay will usually involve a much more comprehensive understanding of the area and what are the amenities available. It involves driving around the area during peak hours to know if it will be super jammed or not. It will also include knowing where the delicious restaurants are as well as the schools if we have school-going children. These are not all, there are more yeah. Just remember that if we bought a wrong place, we are going to bear with it for many years until we could afford to upgrade to somewhere else.
Are we buying a place for continuous rental income? If so, then short-term or monthly? For short-term rental, the area should be a very convenient area to all the tourist attractions. It should be in a state or a city where the number of tourists are HUGE and never-ending. It should preferably be near some LRT / MRT stations too for ease of travelling. Do note that the competition will come from hotels nearby. So, if there are a lot of budget hotels nearby, then you will have to ensure your unit is furnished to look like a 3-4 star hotel yeah.
If we are looking at a longer term rental, then decide if it’s for the office professionals or are we targeting students? Office professionals, needless to say would have to be within a few km from an area with lots of office towers and should definitely be connected to train stations too. Greater Kuala Lumpur may be a good choice to buy as the population growth are a few hundred thousand people every year.
If we are looking at the student market, then it should be as nearby as possible to a private university. Public university also can but the rental will usually be slightly lower. If possible, try to rent out fully furnished. From my own experience, it will attract a better rental premium and the quality of tenants as they are the ones willing to pay higher than a bare unit. Here’s one earlier article for reference: I rent out fully furnished
So, there you have it. Even these answers are still considered a brief one for that one line question of “Is this XXXX area worth buying?” Since you have read this article, do start telling everyone to stop asking these one line questions and start reading, understanding and evaluating objectively instead. So, what if I intend to buy but I do not intend to stay or rent out and just wanted to enjoy it occasionally? Well, if you can AFFORD to ask this question, please go ahead and buy. Then enjoy it! Cheers.
Next suggested article: Renting without a tenancy agreement?