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> Should I go ahead and buy that house, For investment purpose

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TSdeadparrot
post Aug 15 2017, 09:20 PM, updated 7y ago

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Hi folks,

Here's my situation:

I'm planning to buy a house that is worth roughly RM 100k. Here's why I think I should buy the house

1. The agent can mark up the borrowing to roughly RM 125k. That means I potentially fork out zero $$ for this investment.
2. The rental yield is decent. Minus the maintenance fee, I can (potentially) get RM 500 (which is the market rate) a month for rental. The house itself is close to factories so it shouldn't be too difficult in renting it out.
3. Potentially, the median selling price is RM 110k so I potentially bought the house 10% below market value.

Here's what made me doubt about buying the house

1. Huge amount of miscellaneous fees (lawyer fee, SPA fee and so on). I calculated using PropertyXMalaysia app and I would have spent roughly RM 117k and that is before the agent fee which would be RM 5k. That brings it up to ~125k since there could be some more fees(or I have to fix the house a bit).
2. Potential problem with tenants. I plan to mitigate this by renting my place to logistic companies which provides accommodation to workers (probably foreign ones). But if that fails, I would probably have to rent to regular tenants who might not be prompt with rental payment considering the market I'm renting to.
3. This is the cruncher. If I were to commit to this, I disqualify myself from buying any house under any sort of government assistance since they only cater to first-time house buyers. However, I'm probably disallowed from renting to other people(at least legally) under such scheme so I'm not too sure how much I'm losing from this.

As of capital appreciation potential, I'm not too sure since it's a cheap house so I can probably expect like RM 20k appreciation over the next few years but who knows?

Thanks.
AskarPerang
post Aug 15 2017, 11:30 PM

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1. agents fees 5k? no such things. and is the owner that gonna bear the agent fees. not the buyer. you only need to pay the remaining fees.

2. 100k should be a low cost house. you should expect the tenant grade as well. those agency you mentioned is subletter. meaning you rent to them and they will managed. mostly at a very very cheap rate so that they can earn as well.

3. as mentioned in the point above. low cost house can only be used as first time buying property. so either you buy this or buy those affordable government projects rumahwip rumah selangorku etc.
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post Aug 16 2017, 11:15 PM

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QUOTE(AskarPerang @ Aug 15 2017, 11:30 PM)
1. agents fees 5k? no such things. and is the owner that gonna bear the agent fees. not the buyer. you only need to pay the remaining fees.

2. 100k should be a low cost house. you should expect the tenant grade as well. those agency you mentioned is subletter. meaning you rent to them and they will managed. mostly at a very very cheap rate so that they can earn as well.

3. as mentioned in the point above. low cost house can only be used as first time buying property. so either you buy this or buy those affordable government projects rumahwip rumah selangorku etc.
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most of the time the owner will 'add' the agent fee to the purchase price. so it's the same thing. for example the owner wants 95k, agent wants 5k and therefore total will be 100k.
darkmusses
post Aug 16 2017, 11:49 PM

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Is this your first time buying ?

Why not go for govt related one like RUMAWIP or PRIMA etc
donald88
post Aug 17 2017, 07:41 AM

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If the location is swarming with people then no problem in renting out. Meaning you will be getting a steady income from little to nothing out of pocket. Money in the pocket now is better than money in the pocket later.
oxm8
post Aug 19 2017, 07:28 PM

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where is the house location?
is it low cost?
SUSweyyt
post Aug 24 2017, 05:30 PM

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QUOTE(AskarPerang @ Aug 15 2017, 11:30 PM)
1. agents fees 5k? no such things. and is the owner that gonna bear the agent fees. not the buyer. you only need to pay the remaining fees.
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Some area like JB, buyer will need to pay 1%. Different place different practice.
sonypshomer
post Sep 1 2017, 02:07 PM

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QUOTE(weyyt @ Aug 24 2017, 05:30 PM)
Some area like JB, buyer will need to pay 1%. Different place different practice.
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Some agent booking fee up to 3%, of coz buyer have to pay first then deduct from the remaining deposit but that a huge chunk of money depending on the house price.
matrix88
post Sep 1 2017, 02:11 PM

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100k for a house is very cheap. mind to share where is the location?
gooni3
post Sep 15 2017, 05:48 PM

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Am interested to know too

 

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