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 Residential vs Commercial Title, Everything about it

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michaellee
post Mar 20 2011, 01:55 PM

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QUOTE(kelvin_tan @ Mar 20 2011, 12:01 PM)
@christiano7mu
hahaha smile.gif 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?
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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.
michaellee
post Mar 21 2011, 10:42 AM

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QUOTE(kelvin_tan @ Mar 21 2011, 10:00 AM)
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"
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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
post Mar 21 2011, 08:26 PM

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QUOTE(kelvin_tan @ Mar 21 2011, 07:58 PM)
@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).
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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.
michaellee
post Mar 21 2011, 11:47 PM

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QUOTE(1ullaby @ Mar 21 2011, 11:02 PM)
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=  wink.gif
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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.
michaellee
post Mar 22 2011, 12:31 AM

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QUOTE(1ullaby @ Mar 22 2011, 12:03 AM)
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.
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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. wink.gif
michaellee
post Mar 22 2011, 08:23 AM

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QUOTE(kelvin_tan @ Mar 22 2011, 08:17 AM)
I think I have gotten most of the required information I need. Thank you all smile.gif 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 ?
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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
post Mar 22 2011, 11:05 AM

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QUOTE(kelvin_tan @ Mar 22 2011, 10:59 AM)
@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%)
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Actually come to think of it, even mah sing does it. So I guess it is no difference if residential or commercial.

 

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