Pai,

1) The house that you live in is NOT an asset.  It is a liability.  It takes money away from you every month.

2) At around 6% annual interest and assuming that you take a loan of 400K, you are paying 24K in interest aka 2K per month in interest to stay in this house.  This is a HUGE expenditure for a couple earning 10K per month. 20% of monthly income goes to paying interest.

3) This is a young couple (20+) and unless they come from rich family, they have minimum amount of asset at this moment.  Is it wise to commit all if not most of their cash flow into a single house?

I wish them best of luck.

yewkhuay,

I been through a few recessions in USA and one recession in Malaysia.  Every time, the house price at the high end crashes.  And,usually is the people that has more than 33% of their monthly salary tied up in loan payment that got killed  in the process.

P.S.: Maybe, Kepong is a better place than Klang.  Klang's house price has been going down for the past 2 to 3 years.  And, we are not in a recession yet.

Pai,


1) Who say if you rent, you should rent a house at $2.5K or $2K per month?? Who say you must spend that much on housing?

2) You are assuming they do not have any other loan repayment such as car, PTPTN and so on.  House alone is 25%.    It is highly likely that they have other loan repayment that push beyond 33%.

3) So what??  It does not change a simple fact that they commit a large part of their income to housing.

4) They may have a baby and the wife may decide to stay home.  This option will be out of consideration due to commitment on the house.

5) IMHO, time with family is MORE IMPORTANT than a fancy house.

5) When you buy a house to live, besides whether it is a good deal, you need to ask yourself a simple question.  Do you really want to spend that much on a house?

Since there is this topic, I would like to tumpang tanya opinion regarding property for own use from you guys

Me and wife's net income is > RM10k

Our age is 28

Our breakdown of monthly expense:-
Food: Home Cook (Free) & RM500 (Weekend - Optional)
My Car Loan: RM800 Hers is paid
Our Car Insurance & Road Tax: RM400
Parents: RM1000 (My side) + RM1200 (Her side)
Personal & Wife Insurance: RM600
Annual Vacation: RM1000
Entertainment/Wife Shopping: RM500
Car Petrol & Maintenance & Parking & Toll: Claim Company
Telephone: Claim Company
Internet (3G Unlimited): Claim Company
Whatever left goes into investment (FD & UT)

We are currently staying in her place (my parents is at johor). In return paying RM1200 to her parents (consider this as rental / commitment to her family). Home cook food is inclusive

She is the youngest in her family. So the house is left with her parents and us.

My job requires to travel outstation a lot. I'm usually back during the weekends

If her parents is on vacation and I'm not around. Her parents will ask my wife's sister to stay with her cause don't want her to be alone

Q: I have not bought a property for my own use because of the reason above (me traveling and her parents won't let her alone in house). So if you are me, what would you do?

That is the problem
1) Finding a good property
2) Getting a loan
3) Finding a good tenant

I'm always not around, it is not easy to do all the mention 3 above. That is why I've to resolve to other types of investments

@dzi921,
Just keep an 'active' look out for something that interests you in the papers - when you see something you like you can reconsider your options.  No point rushing into purchasing something just for the sake of satisfying your wife or whoever else it might be

Visited Amelia, latest launch of Desa Park City starting price at 78Xk for 24XX sqft. 50% sold out.  Can't believe people do have money to spend and people are rich. Wonder wat they be will doing to transac such amount of money and buy properties.  Most of the visitors age group between 37-45.

I just don't belong in that community.

I know. I'm Kepong mali also mar

Just curious whether they DPC is under KL or PJ

Like BU last time is supposed to be KL, but then they managed to change it to PJ (according to my auntie who stayed there)

@Pai,
Actually, by keeping an active lookout for properties, you're just giving yourself more options:-
1) You'll have sufficient time to see / look into the area you're purchasing
2) You'll know what you want in a house
3) You'll be able to ensure the house is suitable to your need
4) You may have more choices to choose from only because you now can afford something you couldn't afford 3 years ago? *grins*

but these are not ordinary supply here.. exorbitantly priced supplies.. at rm2K/sqf.. it's difficult to imagine how many expartriates can the place take in..

rental has not moved so much in sri hartamas.. (abeit a slight improvement on capital appreciation)

they're 2 type of property investment category (that i know of).. forgive my simplicity.

1. investment depended on capital appreciation.
2. investment depended on rental yield.

those exorbitantly priced link houses are usually targeted for capital appreciation folks.. which, imho.. is the most riskiest form of property investment.. i mean, at rm 800k.. the monthly outflow is like a monsoon drain.

until someone realized that it's just crazy to sell it for more.. then the whole scheme will start to crumble..

(the bank has already done the appreciation for you, if you know what i mean)

boon got it right..    refer to  Post #82

I think get a small unit condo by Sunrise @ Mont Kiara. Good security, good maintainence & good price appreciation.

But how well is the demand for rental in that area? I'm not sure, anyone familiar with the areas in MK and SH?

But if to buy it for own stay, with the same amount; one can probably get a bigger unit elsewhere.
I'm not against it totally, it's just that I do not like condos maybe because I am sort of a "kampung boy" who prefers lands and gardens. When the amount to purchase a condo can get me a anded property for own stay; that's when I felt that it's not worth it to buy the condo.
I would think of Condo as a tool for investment, but than again; high priced condo usually does not return good rental income.
So left capital gain. But property appreciation is always based on demands, and a bigger risk I might say.

Hi, all.

Me and my bf are planning to get married in 2010. We are both 24 this year. I would like to purchase a house before our marriage but my bf insisted that we should just rent. We kind of have some disagreement because of that. Since you all have so much experience in property, can you pls. help me to analyze whether we should rent / buy with our situation. If we were to buy, how much is the property appropriate based on our financial situation.

*We planned to stay about 15 years the most starting 2010 cos we will be moving to the US once our PR status is approved. (Applied PR status through his brother - a US citizen)

*Now, my bf is looking for opportunities to work in overseas but there's no guarantee that he can secure a job in overseas before our marriage. If we are still in Malaysia by then, we still have to look for a place to stay.

*As for financial status, we don't expect our family can help us on that. So my prediction by the year 2010, our savings should be enough for:

1) Wedding (Budget RM40K)
2) House purchase legal fees/simple renovation/furnitures and etc (Budget RM60K)
3) 10% of the house purchase will get from our EPF

*My prediction for our combined salary by that time should be around RM8K monthly.

The problem is, due to financial constraint, we can only manage to buy a completed home in that year. I'm sure the house pricing will go up very high by that time. I know the right thing is to put a large downpayment, but I'm afraid we can't. We'll have to take the longest period loan from the bank.
Is this wise? Or should we just rent? 

property goes up "every year"?

gee... go tell that to the poor developer about it..
he was forced to sell me a condo unit 30% of his listed price..

you think with a retail mind.. that's how you see it.. i'm not even talking about retail discount here.
the listed price was what the developer sold to itself.. and transaction over an official S&P.. (it's like the left hand selling to the right hand) however, the price of the units were similar to the price i saw in the S&P (1st owner)

to see how much the developer take a hit.. i feel humbled by it.. it was a calculated-risk gone awry..

i doubt you'd understand what i've said here.. maybe you're so used to seeing large discount on shopping malls..
but i rather spend time, sweat, effort to comb for large discount on my purchases differently..

if the unit(or entire building) has problem.. i wouldn't be enjoying a good rental income for the past 2 years (how many people can i fool, and for how long, right?)

perhaps you don't really know what is an S&P.. (you talked as though its some brochures from pcfair or something)
fyi.. the last transacted price(not a bid price.. understand the difference?) of this unit is inching closer back to it's developer's price again.
that 30% discount will soon become a 30% profit.. this is something that i'm pondering.. to liquidate or to go with the rental income.

i'm greatful/thankful of the real-estate agent that bridge this deal for me.. almost 3 years ago. i still deal with this agent and we're friends. it's not easy to meet good agents.. if you do, cherish it.

hahaa.. you're getting way silly on your assumptions.. it's flawed by the way. you think like a retail consumer.. that's why you write the way you do.

then again.. why waste time on you?