Welcome Guest ( Log In | Register )

Outline · [ Standard ] · Linear+

 Rental income, Advice needed

views
     
TSwwc88
post Apr 13 2014, 02:38 AM, updated 10y ago

Getting Started
**
Junior Member
98 posts

Joined: Feb 2008
Hi people, instead of placing monies into FD, unit trusts, and etc, i'm thinking on to purchase a low cost flat/apartment at the price of RM70-100k, Cheras area, making a down payment of RM10-15k, then the rest to be funded by loan, rent it out at RM300-RM600 monthly. I don't really mind to top up another RM100-200 for the loan, says RM500-RM800 for my monthly loan installment, 10years later, the loan will be fully repaid, and i will still be getting RM300-RM600 monthly (prudence concept, assuming that the market price never goes up), and i will be owing a loan free property worth at RM70k-100k (assuming that the price never goes up as well). Is this a good idea? Is there any other area I should put into consideration?
SUS2feidei
post Apr 13 2014, 02:42 AM

Ayam tatau, ayam virgin (c)
*******
Senior Member
3,158 posts

Joined: Oct 2013

I don't think you can simply go buy any low cost flat/ apartment. You need to be qualified as low income earner and other criteria first.

Anyway, I might be wrong. Good luck
cherroy
post Apr 13 2014, 11:00 AM

20k VIP Club
Group Icon
Staff
25,759 posts

Joined: Jan 2003
From: Penang


Set aside eligible to purchase low cost apartment issue, collecting rental from low cost apartment may not as easy as one thinks sometimes. It depends on plenty of luck to get a good and prompt pay tenants.

Market price can plunge down if the low cost flat is poorly maintained, and may hard to sell.
There is no guarantee market price stay the same.


TSwwc88
post Apr 13 2014, 03:44 PM

Getting Started
**
Junior Member
98 posts

Joined: Feb 2008
QUOTE(2feidei @ Apr 13 2014, 02:42 AM)
I don't think you can simply go buy any low cost flat/ apartment. You need to be qualified as low income earner and other criteria first.

Anyway, I might be wrong. Good luck
*
Yeah, there are certain properties under controlled by local authorities, i.e. income <2.5k etc.
TSwwc88
post Apr 13 2014, 03:57 PM

Getting Started
**
Junior Member
98 posts

Joined: Feb 2008
QUOTE(cherroy @ Apr 13 2014, 11:00 AM)
Set aside eligible to purchase low cost apartment issue, collecting rental from low cost apartment may not as easy as one thinks sometimes. It depends on plenty of luck to get a good and prompt pay tenants.

Market price can plunge down if the low cost flat is poorly maintained, and may hard to sell.
There is no guarantee market price stay the same.
*
So there are three things you have highlighted here, Tenants, Market price, Maintenance.

Tenants - shall have to be careful in choosing tenants, anyway at least it was backed by 2months deposits.
Market price - not really a big deal if that's for long term investment?
Maintenance - the only thing I can think at the moment is, try not get those higher level one as I heard normally the top level has water leaking problem especially during raining.

tongue.gif
cherroy
post Apr 13 2014, 04:04 PM

20k VIP Club
Group Icon
Staff
25,759 posts

Joined: Jan 2003
From: Penang


QUOTE(wwc88 @ Apr 13 2014, 03:57 PM)
So there are three things you have highlighted here, Tenants, Market price, Maintenance.

Tenants - shall have to be careful in choosing tenants, anyway at least it was backed by 2months deposits.
Market price - not really a big deal if that's for long term investment?
Maintenance - the only thing I can think at the moment is, try not get those higher level one as I heard normally the top level has water leaking problem especially during raining.

tongue.gif
*
1. A tenant is stranger from the start, you never know what kind of tenant you are facing until the later stage.
Some can owe from months, half year, so 2 month deposit may not enough to cover as well.

2. Market price, if a poorly maintenance flat/apartment with broken lift, leaking, dirty corridor with rubbish, one may have hard time to sell, don't need to talk about the market price in the first place.

3. Water leaking can be anywhere, not limited to top floor, even mid floor water seeping from sidewall issue also have, (personally knew 2 cases in 2 different highrise) whenever rain time, the wholewall facing outside that subjected to rain become wet.
wodenus
post Apr 13 2014, 07:58 PM

Tree Octopus
********
All Stars
14,990 posts

Joined: Jan 2003
Besides what everyone else says, you might have trouble collecting the rent, and then you might have trouble evicting the tenant. And yes as people have already said, market price for low-end usually collapses in a market downturn because investors who are least affected by downturns usually buy high-end property.

This post has been edited by wodenus: Apr 16 2014, 08:09 PM
TSwwc88
post Apr 14 2014, 01:16 PM

Getting Started
**
Junior Member
98 posts

Joined: Feb 2008
QUOTE(cherroy @ Apr 13 2014, 04:04 PM)
1. A tenant is stranger from the start, you never know what kind of tenant you are facing until the later stage.
Some can owe from months, half year, so 2 month deposit may not enough to cover as well.

2. Market price, if a poorly maintenance flat/apartment with broken lift, leaking, dirty corridor with rubbish, one may have hard time to sell, don't need to talk about the market price in the first place.

3. Water leaking can be anywhere, not limited to top floor, even mid floor water seeping from sidewall issue also have, (personally knew 2 cases in 2 different highrise) whenever rain time, the wholewall facing outside that subjected to rain become wet.
*
QUOTE(wodenus @ Apr 13 2014, 07:58 PM)
Besides what everyone else says, you might have trouble collecting the rent, and then you might have trouble evicting the tenant. And yes as people have already said, market price for low-end usually collapses in a market downtown because investors who are least affected by downturns usually buy high-end property.
*
What if I go for slightly higher ended flat/apartment which cost around RM150k++? will it be better?
kaiserwulf
post Apr 14 2014, 01:25 PM

Regular
******
Senior Member
1,110 posts

Joined: Oct 2008


Poor tenants have higher chance to give problem... not necessarily intentionally...

Default payment cos not enuf money
Family problems (fighting causing door break, window break) cos not enuf money
Gangster style don't want to pay you
Secretly run away after many months no pay (and repeat same habit with new landlord to keep having free place to stay)
Ppl rent your place use for 'dark' things
Ironhide828
post Apr 15 2014, 11:07 AM

Getting Started
**
Junior Member
168 posts

Joined: Oct 2011
Bro, if your financial is okay, perhaps u can choose a mid-priced condo for investment, I think it will have more brighter side than low cost apartment.
weichong
post Apr 15 2014, 11:18 AM

Getting Started
**
Junior Member
93 posts

Joined: Nov 2007
From: Melaka


Some of my friends have the same thought as you, they brought low cost apartment and try to rent it out, i will say the rental is good for amount of money forked out, but then they have lots of problem collecting the rent.

Other than that, there are other things you need to look out for.

If you have not own any house, you might want to make use of the Skim Rumah Pertamaku (SRP) to buy the house you want.

Or if you plan to buy your own house later, you need to be aware that you might not be able to get 90% loan for your next home
1 house-90% loan
2 house-90% loan
3 house-70% loan

stickmanchong17
post Apr 15 2014, 09:22 PM

Casual
***
Junior Member
359 posts

Joined: Mar 2014


Read up Azizi Ali's book- How to become a millionaire landlord

Juz my 2 cents worth tongue.gif
enkil
post Apr 15 2014, 10:06 PM

Regular
******
Senior Member
1,752 posts

Joined: Dec 2013


Azizi now say sell all biggrin.gif

QUOTE(stickmanchong17 @ Apr 15 2014, 09:22 PM)
Read up Azizi Ali's book- How to become a millionaire landlord

Juz my 2 cents worth  tongue.gif
*
wodenus
post Apr 16 2014, 08:13 PM

Tree Octopus
********
All Stars
14,990 posts

Joined: Jan 2003
QUOTE(enkil @ Apr 15 2014, 10:06 PM)
Azizi now say sell all  biggrin.gif
*
LOL where did you read that smile.gif

enkil
post Apr 17 2014, 12:36 AM

Regular
******
Senior Member
1,752 posts

Joined: Dec 2013


A friend went to his seminar last year.

QUOTE(wodenus @ Apr 16 2014, 08:13 PM)
LOL where did you read that smile.gif
*
gs20
post Apr 17 2014, 09:27 AM

Regular
******
Senior Member
1,685 posts

Joined: Jan 2003
I have to concur with many that stating you might have a hard time collecting your rent.
Speaking from personal experience, my tenant is 4 months late on rental now.
bart80
post Apr 17 2014, 05:31 PM

Getting Started
**
Junior Member
179 posts

Joined: Jul 2008


Sorry skip into this topic with a related question... during income tax time any way to claim rebates for maintenance, agent fees etc. from you rental income?
czn
post May 9 2014, 09:25 PM

New Member
*
Junior Member
49 posts

Joined: Dec 2009
Hi, I am new in shop renting business and I just bought a new shop to rent to tenants. The prospect tenant says he is going to lay tiles, put up grills and lightings. He asks me to bear some of the costs besides giving free one month tenancy. What is the normal practice in shop renting business regarding renovation cost sharing? Some say the ground floor tenant will pay 2/3 of the Indah Water bill, is that true? Can the experienced sifus here give me some advice? Thanks a lot.
yltoh
post May 9 2014, 11:46 PM

On my way
****
Senior Member
608 posts

Joined: Apr 2012


QUOTE(stickmanchong17 @ Apr 15 2014, 10:22 PM)
Read up Azizi Ali's book- How to become a millionaire landlord

Juz my 2 cents worth  tongue.gif
*
That book is good rclxms.gif
dkk
post May 10 2014, 01:47 PM

10k Club
Group Icon
Elite
11,400 posts

Joined: Jan 2003
QUOTE(czn @ May 9 2014, 09:25 PM)
Hi, I am new in shop renting business and I just bought a new shop to rent to tenants.  The prospect tenant says he is going to lay tiles, put up grills and lightings. He asks me to bear some of the costs besides giving free one month tenancy.  What is the normal practice in shop renting business regarding renovation cost sharing? Some say the ground floor tenant will pay 2/3 of the Indah Water bill, is that true?  Can the experienced sifus here give me some advice? Thanks a lot.
*
Landlord: Nah, I don't need the tiles and grills. If you want to renovate, please make sure you return the shop in the original condition when you leave.

Tenant: But the tiles and grills will be useful for your next tenants.

Landlord: Don't know yet. He might want me to PAY to have them removed. Let me see what you plan to do. See if it's neat and good for other tenants.

.... after looking ...

Tenant: See, this will improve the value of the shop. You can rent at a higher price to the next tenant.

Landlord: How much do you think it'll be worth? I'm renting to you now for RM5000, do you think the improvements will increase the value to RM6000?

Tenant: For sure. Even RM7000 might be possible.

Landlord: OK, I'll pay for the tiles and grills. But your rental goes up to RM6000. OK?

---------

half to one month, rent free renovation period is quite common.

2/3rd of Indah Water bill for ground floor tenant, I've never heard of. Why not just share equally with however many floors/tenants there are? Most businesses will use very little water. Unless the ground floor tenant is a laundromat using so much water that it raises the Indah Water bill for everyone, I don't see any reason why the ground floor tenant should bear a greater share of the indah water bill.

2 Pages  1 2 >Top
 

Change to:
| Lo-Fi Version
0.0241sec    0.51    5 queries    GZIP Disabled
Time is now: 29th March 2024 - 07:33 PM