Hi All,

I am pretty new towards property investment and I would like to understand the pros and cons of Residential vs Commercial title in Malaysia. Would anyone care to share some pointers out please? Thank you

Kinda tired at the moment. To keep it short, residential=capital appreciation for landed and rental yield for condo, commercial=capital appreciation and rental yield. Residential are for beginners, commercial are for advanced(aside from service apartment). Will continue after i sleep. Have a lot of documents to go through at the moment

Looking cyberjaya property?

@christiano7mu
hahaha yes. However, would really like to learn more.

I learnt something yesterday which requires confirmation. According to my aunt (which has been in property investment for 20 years), she mentioned that utilities rates in "commercial" title are higher most of the time.

Any1 can clarify and provide me more advices on this?

Utilities, assessments are more expensive for commercial rather than for residentials. Each asset class has its own merits and there is no hard and fix rules as to which is better. Otherwise most people would only invest in one type of property. I don't think we can summarise residentials are for beginners and commercials for advance.

at the end is Making Money whether it is leasehold, freehold, landed, condo, residential, commercial...

+1

an agent told me that for SOHO that comes with commercial title: if the owner register water & electricity bill under an individual's name (rather than a company name), then the water & electricity bill will be charged at residential rate, anyone can verify this?

Pretty hard to confirm! You have to wait until you got strata title for your unit and you got individual meter registered to syabas. Then only you know how long this will taking to be ready!

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Added on March 20, 2011, 3:41 pmPretty hard to confirm! You have to wait until you got strata title for your unit and you got individual meter registered to syabas. Then only you know how long this will taking to be ready! Otherwise under bulk meter, pretty hard to devide all the bills payable. Also need to pay for the bills charged under common areas. How the rate will be?

This post has been edited by kh8668: Mar 20 2011, 03:41 PM

There are some comments from residence in Saville Residences which indicates its possible.
Check it out :
http://saville.49.forumer.com/viewtopic.php?f=3&t=17

great, seems like it is really possible, then the utilities bill issue wouldnt be a big hoohaa anymore. i wonder what would be the actual variables that decide whether commercial title will be charged at residential rate or vice versa.
anyway thanks a lot

Viva Residency at Jalan Ipoh had done that long time ago.... and other service apt are following the trend as well..

http://biz.thestar.com.my/news/story.asp?f...36&sec=business

Haha.. the purpose of this thread is not to find which is better actually but to "know" what am I investing in.

Any other pointers that could be shared? I'm pretty sure there should be difference in "Residential" vs "Commercial"

Even residential there are quite a fair few subclasses - apartment, condo, low costs, terrace, semi-d, bungalow, land and Commercial - office space, retail lots, shophouses, land. Every single one has its own pros and cons. Not least the difference in prices.

Dealing with tenants again quite different over the different class. Chances of a low class tenant in a low costs property compared with educated people in higher class properties. One would stupidly avoid paying you rent while the other, even run away with 4 months unpaid rent, you will still say, that's one hell of a good tenant.

What exactly are you looking at the difference between the two?

@michaellee
I'm trying to understand the difference in the title thats all. Why the need to seperate Residential vs commercial? Because I do see places where it is holding Commercial title but it is actually deemed as Residential in my opinion (Condo, apartments, etc).

Residential title property = the property only for residential use. specific use stated in the title.

commercial title property = the property only for commercial use. specific use stated in the title.

so...hahaha

This is a rather new thing. Commercial land actually attracts a higher land premium. For every township, the town planner will always proportionate their land to certain percentage. However, as some owners who bought commercial land find that perhaps office space or shopping centre might not fetch as much profit (possibly due to oversupply) they will build service apartment which essentially is residential built on commercial land.

Commercial title somewhat favors the developers when they are doing projects that raises the density ratio in that area substantially.

As well, some commercial titled projects chooses not to give / sell / rent out their parking space, that is not an option in residential titled.

Note that higher utility bills aside, your maintenance fees are higher too?

But, on the other hand, commercial titled properties favors the investors WHEN the location has all the ingredient for commercial success,
it'll give your residential unit a =Boost=

This post has been edited by 1ullaby: Mar 21 2011, 11:10 PM

Commercial utilities rates are higher than residential.

Those are called service apartments or SOHO

Those under commercial title are not obliged to offer parking space. If u got then , if didn have,

I disagree slightly. The plot ratio of each land has already been predetermined by the relevant council so it does not matter if it is residential or commercial. In town planning there are also plots of lands which are designated high density residential. You are right about the car parking space.

I see, I was under the notion of commercial titled will always be able to support a high plot ratio, no?

Hence, when market favors residential dwellings, it makes good sense for developers to go high density residential for their commercial land.

still not too understand what the benefit of purchase commercial title property...

Of course this is Malaysia.. there are many reasons to allow higher plot ratios. But somehow I don't think commercial is one of them. Look at Mont Kiara, pretty good plot ratio there.

Different target of tenants for different purpose in property investment!

Both complement each other...

I think I have gotten most of the required information I need. Thank you all Able to understand better with regards to commercial vs residential.

Let me contribute another part I recently found out (requires some clarification, maybe some other forumers can help?). Downpayment to purchase a property under commercial title is higher than residential ?

Not necessarily true. Mayland had been launching some of its "commercial" service apartment and it has zero downpayment scheme especially for its Johor projects.

@michaellee
Sorry maybe I should provide slightly more details.

This is based on market average and it is not necessarily right if we go into specifics.

Normally, down payment is 10/90... but for commercial it is 15/85.. how true is this?

For Mayland, it could be that they are giving 15% discount which is why its 0% down payment. The same is applicable for Suria Jelutong, 15% downpayment and 15% discount given (during the early stages, now its 12%)

Hmmm .. commercial - residential use to be full 90% as far as I know as I am vested in some studios / serviced apts,

The recent trend could be due to the 70% LTV effect whereby the projects of these nature became fuzzy.
Anyway, better for someone in the know to comment.

Actually come to think of it, even mah sing does it. So I guess it is no difference if residential or commercial.

Buying Commercial tittle like Soho,Serviced Apartment need to folk out DownPayment 20% ,right?

Anyone can clarify on this :

Pindaan Nilaian Harta by any majlis bandaraya for commercial land title? Besides diff rate for water supply and elec bill, this nilaian harta also bit higher?

can a developer build double storey terrace houses on commercial title?

A double storey house would be consider as dwelling units which falls under residential. Developer would have to convt the land title into residential title unless they are building town house or SOHO or service apartment. If it is for dwelling units, it is much more better to build o residential land than commercial.

can we say only malaysia goverment allow commercial title property for permanent residential use?

Not really. I can see similar mixed developments sprouting up in Singapore where downstairs is a shopping mall and the upper levels are SOHOs, condos etc. These are all built on commercial titled land too.


Imho, buying a "residential dwelling" on a commercial development:

Pros
- Retail shops conveniently located downstairs. Anytime you want to makan, buy stuff, just go downstairs.
- Buzz and activities happening most of the time around your living place. Nice for ppl who like to live in a "happening area".
- More strategic location. Commercial titled areas could be located in a more strategic/convenient location compared to a residential titled area.


Cons
- Less privacy due to increased traffic/buzz/noise/activities spillover from retail shops downstairs.
- "less security"? because public can access the commercial portion of the retail shops and can potentially tailgate any residents heading to their own service apartments upstairs. Not that this can't happen in condos but the tailgating in condos would be more obviously noted.
- Higher quit rent/assessment charges/utility tariffs? (dont have personal experience but heard this before)
- Less number of carparks alloted to residents? Due to a need to reserve lots for retail shop owners too.
- Used to be the standard HDA SPA contract doesnt cover residential units on commercial titles. That should not be the case now, so just need to ensure that the relevant Schedule H or J is used for your SPA when buying from developer.

This post has been edited by Kokwm: Jan 6 2012, 09:25 AM

what if there is no mall?

Commercial title is meant for retail units etc. The developers work around this by having residential dwellings on top of the retail units and term these SOHO, service apartments etc.

At the end of the day, the developers are supposed to build only commercial units. So I am pretty sure there would be retail units there else the commercial title cannot be used.

those shops in apartment/condo, commercial or residential title?

sorry, tumpang thread... any idea if commercial water tariffs are fixed or it differs depending on location?

i have never stayed in a condo before but i have a serviced apartment and my tenant is curious to know how much the tariff is compared to other locations

This post has been edited by kenji1903: Jan 6 2012, 10:25 AM

Residential titled developments have at most one/two shops only, whereas the commercial titled developments have the entire lower levels filled with retail shops.


I found this on TNB website.

http://www.tnb.com.my/business/for-commercial.html

http://www.tnb.com.my/residential/pricing-...riff-rates.html


Personally, I was told by serviced apartment Management Manager (Endah Promenade) that the serviced apartments are charged commercial rates.

This post has been edited by Kokwm: Jan 6 2012, 11:13 AM

electricity wise, mine's residential rate, they made it clear upon purchase

Good to know that this can happen on a case by case basis. Guess this needs to be clarified upfront before committing to purchase. Thanks for sharing

who told u? got confirmed with TnB?

developer and condo management...
my tenant compared with another friend whose living in a residential condo, rates are the same

so no b&w... one day they realise and charge u back with interest ...

not sure if its stated in S&P or any formal doc, should bother me much since i'm not staying there...
but good point... i'd better find the docs for reference

hi want check is service aparment
is the rate for commercial higher or can convert to residential for the following?
•utilities – TNB, JBA, Indah Water and telephone
•Assessment (twice a year)
•Quit rent (annually)
anyone have some info to share?

The rate is damn high... Next year hike will make it worse...
Anyone know if the commercial rate can convert to residential...since most of the apartment is under commercial title these days....

hi all,

can anyone help me on how to identify commercial title vs residential title? how do I check and ensure my property is residential title before I buy it?
thanks.

I just read this:
"Commercial Title is not covered by housing Act. You can't sue the developer if anything goes wrong. "
i read it from this blog

Is this true? Can someone clarify?

This is what I call "know abit only but he think he know it all"

if im mistaken, service apartment is covered by hda since 2009 I think. SOHO, SOFO and all those other SO im not sure

^^^^

Any1 have any answer to this? I have been searching for any info on this for over a week. As the property is under construction, how to know this rates? My SA said its based on residential, but I dont want to rely on his word only without b/w. I dont think these stuff are stated in snp. Do pejabat tanah, TNB, syabas/indah water have info on this for properties under construction?

Depends on the developer. When you buy a SOHO, if u sign SPA with Schedule G / Schedule H. They are protected under HDA smile.gif

https://forum.lowyat.net/topic/1403625/+120

its 2007.. SOHO yes.. other than that (SOXO) no..

Hi,

Anyone could share with me in terms of the different in loan for commercial title property?

What are the major difference between the residential title property loan? Any specific things that I need to take note on the loan for commercial property?

Hope to get more feedback on this. Thank you in advance.

Have anyone get answer for above question? Would be good if can share it out...

I once remember a LYN forumer did mentioned that as long as the project is under HDA Schedule H, it is confirmed that residential rate will apply despite the commercial title. However, he did not specify what are the reason so.

The Schedule H does not provide much clue that support his statement thou. A Gray area perhaps?

Come and share your thought on this interesting topic

Spoken with a Property Sales Team Leader for Kepong 5/ Kepong Square..

She mentioned that as long as the high rise are under HDA protection, utilities rate will be under residential automatically despite the commercial title.

She suggest that i check with TNB and Syabas to confirm her statement which she confidently vouch that it is true.

if i remember correct,

The utility bill can convert to residence,
but all residence have to sign a letter to apply for that,
content like verify that the unit is for residence use.
then TNB and syabas will convert to residence rate.

Which means the residences can only do it after the JMB has formed?

I'm not too sure about whether the developer is responsible for the conversion. But if they did not take action, it will be up to the residence to take it upon themselves then

mine developer do it for us,

when all owner sign SPA sign together

Great! And how do you and the rest of the home owners go about with this?

it is some form of petition letter to get all owners to sign to get the dev to do the conversion?

Please enlighten us on the process

you need ALL residence to sign together and summit to TNB,
if your house is current charge commercial rate,
then you might need to done it on AGM

I assume the same process goes for syabas too.

How about the local authority for quit rent and assessment?

If i'm not mistaken, they too have both commercial and residential rate.

hi all, want to check why my service apartment need to charge as commercial tnb rate? anyone can share how to change to residential rate?

Because the muscle of the developer is weak .....

boss this topic just discuss in recent page and previous page only lah

Hi all, I'm planning on buying a property, as per the agent, the property is on a commercial land but with a residential SPA, what does this means? Does it means it will be treated as residential? In the case if it is being treated as commercial, other than the electricity and water bill, what are other things that I might need to pay more in comparison to residential property?

2.5 times of residentil assessment tax and quit rent..

nowadays a lot of condo are commercial title

May i know buying service resident is handover with strata title? Or with master title?

Strate title

I m looking to buy a service apartment ,
I will take residential loan , but the developer staff say is under a commercial land, but is under service apartment,

Can I know will I able to convert my TNB bill to residential rate?
Or water bill residential rate? Or quit rent / assessment ?
Anyone own a service apartment here could give some advice?

Strata title, under residential or commercial?

Serviced apartment, commercial title under HDA.
TNB - Domestic tariff (A-013)
Water - as charged by the management. Initially we were charged minimum RM30 per month, later on reduced to RM15.
Assessment rate - 5% of nilai tahunan, not sure this is residential or commercial rate. Mine amounts to RM261 per year.

Hope this helps.

This post has been edited by davkong: Apr 9 2017, 12:26 PM

Wow thanks for the information,

Assessment - 5% of NILAI tahunan ? Hmmmmm how u count your rm261?

How much is the difference Residential rate vs commercial rate for TNB? I m more concern about this

Btw how much is your usage for TNB?

The amount is from the bill sent. RM130.50 every half yearly.

My TNB bill is around RM70 per month.

Ada air conditioner tak? I assume tak Ada?

Is assessment count with property market value or? Area?

With AC, daily AC usage 1HP about 4-5 hours only. Mine is 1100sqft apartment under MPSJ.

tq so much, hope dbkl one is not much of difference
thanks so much for sharing

For this case, the loan is residential or commercial?

95% loan as under DIBS 5/95 back then.

If under DBKL
commercial title is charge by commercial TNB tariff
assessment is 7%
water is commercial too
RM 2.07

Anyone have KL area example? The one I m looking at is zone under DBKL?
Mind share ?

Hi Dav,

Can you tell the developer of your service apartment?

I'm looking to buy KLTS service apartment, its land is commercial title, under HDA. I'm kinda worry about water bill, electric bill, quit rent and assessment that might charge in commercial rate...

Or maybe any advice you can provide?

First time home buyer here.....

It's SP Setia project.