Hi, if you are looking for a property for investment (purpose to rent out), I am planning to sell mine (direct owner here). Have a ready tenant (family) and will give you a net positive cash flow every month. Tenant will be renting long term, at least 2-5 years or even longer if you wish to continue collecting rental.

Property details;
Selling Price: RM700,000
Size: 888 sqf (3 bedrooms, 2 bathrooms, 1 utility room)
Location: Petaling Jaya (walking distance to Tesco, 1.5km to LRT Ara Damansara, 2km to hospital & polis, 5.5km to bomba, near shop amenities)
Type: Service Residences
Floor: High
Tenure: Freehold
Car park: 2 (right next to the lift)
Age of property: Completed and key handover at end-2018
Facilities: Open Lawn with Amphitheater, Aqua gym, Swimming pool (kids & adult), Jacuzzi, Aqua Gym, Floating cabanas, Barbeque pavilion, Jogging track, Gymnasium, Children playground, MyNews at Ground Floor

Assuming your downpayment is 10% (RM70,000), loan value would be RM630,000. With interest rate of 3.2% and loan tenure of 35 years, your monthly financing installment would be about RM2,495.42.

A quick check from iproperty, current rental range is about RM1,600 to RM2,400. Assuming you manage to rent the unit at the highest price of RM2,400 through a property agent and after deducting 1 month of property agent fees (commission) per year, your monthly rental received would only be RM2,200 (RM2,400 x 11/12).

Also, under the Strata Management Act 2013 (SMA), homeowners are liable for the maintenance fees and sinking fund. For the unit above, the current maintenance fees and sinking fund is about RM341.88.

Hence, rental collection (RM2,200) minus monthly loan commitment (RM2,495.42) minus maintenance fees and sinking fund (RM341.88) equals to negative monthly cash flow of -RM637.30.

However, for the unit that I am letting go, you do not have to pay any property agent fees (commission) as you are dealing direct with the owner. The tenant is also willing to bear the monthly maintenance fees and sinking fund as well as the utilities bill (electricity, water, internet).

The monthly rental that you will be receiving is at RM2,650, translating to a rental yield of 4.54% (which is higher than the estimated rental yield indicated from iproperty at 3.5%). The amount is also higher than the estimated monthly financing amount, which will provide you a net positive cash flow of about RM154.58 per month (after deducting your monthly loan installment of RM2,495.42). This amount could even increase to RM225.44, if you manage to secure lower interest rate, at about 3.0%.

I’m not in a hurry to sell now, let me know if you are interested for more details after you have done your surveys. Other investors reading this post are also welcome.

This post has been edited by Dreamer09: Jun 22 2021, 08:22 AM

PM. The rental is for the unit size advertised on iproperty website.

This post has been edited by Dreamer09: Jun 22 2021, 09:44 AM

PM

Im talking about the property agent fees when the buyer hires a property agent to rent out his/her unit. He/she would have to give up part of the rental as the commission to the agent. By dealing through the owner itself, the buyer would not have to cut out a slice from the rental for property agent fees and also save the hassle to find a tenant.

For example, if the buyer hires a property agent and rents out his/her unit for RM2,400 per month. Assuming 1 month rental fees as commission for the property agent, the net total rental collection for a month would be RM2,400 x 11 /12 = RM2,200. In essence, the buyer are paying RM200 as a monthly commission to the property agent (although the transactions are made from the party whom rent) and he/she will only receive a net yearly rental of RM26,400.

If we eliminate the middle man (property agent), the investor would receive a higher rental of RM2,650 and do not have to cut part of it as commission. He/she would be able to obtain RM2,650 x 12 = RM31,800 in net yearly rental.


The reason of the higher rental rate is because I will be renting it back from the buyer/investor at the price I'm willing to pay (which is higher than the market rate) over the long run and we are targeting to rent between 5-10 years with renewal option every year in case the owner wants to get it back for their own stay or sells it during that period of time. The rental rate is higher to save the hassle of moving out and finding another place.

I will be renting it back for my parents to stay. I won't mind paying a couple of hundred more each month for this issue. We are renting it back over the long run as my parents are comfortable with the current environment as well as the surroundings.

Not rushing to sell it anytime unless there is a serious investor that is willing to take up the offer price.

This post has been edited by Dreamer09: Oct 16 2021, 09:35 AM

Actually any newbie also will know.

The descriptions are all in there.

Just google 888sqf ara damansara and everything from the search engine on the first page will only point to that particular project.