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Property downpayment – own stay (updated)

When a colleague and I had lunch recently, she said she is saving money for a property. I asked her, what kind of property. She said, I am not sure yet. Once I have enough savings I will then look. I asked her how much is enough. She said she has yet to identify. Actually, if you are saving for a property, always determine the purpose. If it is for your own stay, try to save as fast as you can. My personal opinion. Your savings may increase by 10% or more per year and property prices may only increase 3% per year but your 10% is very little compared to 3% of the overall property price!
As long as your finance is healthy and you are buying the property for your own stay, buy it as soon as you can and not when you think you have saved enough. If you are paying a rental of RM600 per month, that’s RM7,200 per year. Do you know how much savings you need to earn RM7,200 in interest? Based on current FD rate of 3%, you will need to save RM240,000.  If you have RM240,000 cash, would you even be renting?
There are some who have started to advocate that since property prices are so high, you might as well rent. Let me tell you that the time is not now. There would be a time in the future, when Malaysia becomes a fully developed nation. There will be a time when ageing population becomes a norm in Malaysia. At that time, maybe this argument has some valid points. As of now, no. It is better to buy than to rent except for very special circumstances such as there is you are only going to be there for less than one year.
Paying for mortgage is totally different from paying for rental even if mortgage payments are typically higher because at the end of the day, the place is YOURS. If you can’t afford a big place, why not start with a smaller one? Rent one room out if you must. There are lots of websites that you can use to rent it out. One example or If you are looking to buy and compare, there’s and which are two prominent property sites in Malaysia today.
written on 29 nov 2013
Next suggested article: Penang Property Potential

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0 Responses

  1. I did it twice… but with some cash back up. Since the mid 90’s, I tried the 1st stunt by purchasing 2 units of semi detached for my family house side by side; renovated 1 to stay & sold the unrenovated unit to pay for the renovated unit after 3 years. The house prices doubled and I just need to pay the holding cost for 3 years.
    Subsequently, I purchased 1 or 2 extra smaller properties to sync the uptrend of the property market, sell the extra property to payoff those units I want.
    I am in the last stage of my property investment; need to sell the last unwanted tiny piece of land (purchased 4&half years ago– awaiting for it to turn 5 years for exemption of RPGT) to payoff a my last housing loan. Ended up with 2 prewar houses & a terrace corner fully paid.
    As I aged, I will opt for the stock market where liquidity is there just in case I need cash for healthcare.

    1. SB, I like your plan. 🙂 In fact what majority lack is just a workable plan. I do not believe everyone should follow just one way or just what ONE property guru say. In fact if everyone said the same thing, I would turn cautious!

  2. Hi SB,
    Bravo with you strategy investment, however, you mentioned that in mid of 90, you had purchased 2 units of 2 units of semi detached side by side; renovated 1 to stay & sold the non renovated one unit to pay for the renovated unit after 3 years with holding cost.
    Next, you bought another smaller units of 2 property, sold the extra property in uptrend market and payoff those units I want (I assumed that you sold of all your small property and offset your semi-d housing loan).
    Next, you had a tiny piece of land to be sold in next 1 year after exemption of RPGT.
    Current, you have 2 prewar houses & a terrace corner fully paid (I guess you terrace corner property,it should be the last semi-d as mentioned above)
    The question is… where are those 2 prewar houses came about? it was not indicated.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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