I plan to buy a second freehold property for RM400K. The monthly installments including maintenance fees is goes up to about RM2,500. My question is more on what I should do with my first property as I plan to stay at the second property.

I bought my first property 5 years ago for RM180K. Monthly installment around RM850 and maintenance fees is about RM180. Balance loan amount around RM150K. The property is leasehold.

I cannot afford to pay for both properties at the same time. What should I do with my first property?

1) Sell the first property? I think if I sell now it could fetch a price around RM400K. If I sell at RM400K, I think I made a good profit of RM250K. Should I pump this RM250K into my second property?

2) Rent out the first property? I think the rental should be around RM1,200 only so not going to help much unless I withdraw from EPF account 2 to service the loan. I have about RM100K in my account 2. Not enough to fully settle the loan yet but enough to service monthly installment.

What is the average occupancy rate at the area of first property?
How much interest are you paying for the current first property?
When do you need to make payment for your second property ?
How long would you take to sell off your first property?
What type of bank loan has been approved for your second property? e.g. flexi, fixed, variable, bank, ING or AIA.
Are you a government servant?

This post has been edited by powerlinkers: Oct 3 2018, 10:36 AM

Sell or rent on the first property has pro and cons.
Whether to sell or rent is much depended on cashflow and financial situation.

As if cashflow is indeed stretched due to having second property, the obvious solution is to sell the first house.

My personal advice.

1.Sell off your first property.
2.Use the money to top up for 2nd property.
3.Get a fixed rate loan with AIA or ING. Fixed rate loan will shield you off from interest rate fluctuation for long term. You do not need to worry every time US Federal Reserve increase their interest rates.

4.DO NOT WITHDRAW from your EPF: they pay you high interest whereas housing loan interest are lower.

5.If you become richer in the future : try to buy a condo to rent out.

This post has been edited by powerlinkers: Oct 3 2018, 11:04 AM