U dun have primary income... so bank won't layan, unless u have huge cash reserve put in bank.

I have explained many times and in many ways. But they still prefer to interpret it in their own ways

Bank needs to mitigate the risk... it's a challenging time now, can't blame them..

you borrow housing loan 30 years....

your rental income can consistent 30 years?

logic tell you not.

During the great ol’ days, post subprime crisis trauma (2009-ish to 2012/13). U just need to pledge your geran, and bank can grant a 60% loan and no 70%LTV imposed on 3rd housing loan.

That makes the public think that Banks work that way all the time. Which is untrue

Let’s be honest , who pay taxes on rental in Malaysia ? After all the allowed deduction it’s prob very little left to pay …

RM5k net profit or not yet deduct maintenance, tax, repair etc? In fact, RM5k is low to acquire 2nd loan.

Also unlike salary which has record, if tenant left half way, bank wouldn't know so dang risky.

This post has been edited by TrialGone: Aug 22 2021, 09:47 AM

Paying taxes is to make the money earned legal. So many ahlongs would like to pay taxes if given a choice.

Would the bank know a borrower has lost his job half way ?

The jobless can find another job and so is landlord another tenant.

Income from Job is a lot stable than rental. Rental is a lot less stable either they left halfway or defer/cannot pay at all. Also there is no documentation proof unlike income via EPF. It's also based based on statistic.

Anyway just the info I head from loan officer since I also curious about it when I ask loan for house anyway. And TS testimony seems to be in line with I heard.

This post has been edited by TrialGone: Aug 22 2021, 10:27 AM

All property investment companies would have closed shop and go into manufacturing.

This post has been edited by mini orchard: Aug 22 2021, 10:32 AM

I beg to differ. Its actually the other way round. You pay taxes on the money you earned legally. You don't pay it to make it legal, that's money laundering. Hence why your second statement about AhLong actually contradicts your first. If taxes are created to make money earned legal, why is AhLong not allowed to pay taxes on their illegal money?

Also, you are looking at this issue from a very simple lense. You are making a simple comparison between a person who can find a new job after losing one vs a landlord who can also find replacement tenant. That's a single lense view.

We always talk about bank risk appetite, that appetite is derived from a number of factors not just 1 factor.

Age, income, or even health all contributes to that calculation. Hence, the key word is PROBABILITY.

Using your example above, What is the probability that a person, at a age of xx years, who loses a job at that age, aren't able to find a replacement job, vs what is the probability of that landlord at the age of xx years, relying solely on rental income, to find a replacement tenant? Bear in mind, if a landlord relies solely on rental income, most likely he or she is at advanced age, and also whether the property is fully owned or mortgaged.. Etc

Again, this is just very basic view. The calculations are more complex and comprehensive depending on what risk factors the bank apply.

This post has been edited by adrianteo: Aug 22 2021, 10:40 AM

On what basis is the statement ?

I do. After deducting all costs I still have to pay taxes for 80% of my rental income.

I already know most people avoid paying taxes but somehow I'm still disappointed to read this.

I am giving an example which may or may not be accurate. The key here is looking at the risk profile of every individuals and the market.

There might be individuals who are very successful at their early years, fully owning all their properties and retire early by relying solely on rental income. Then again, how many of these individuals are in the market vs how many of individuals who are actually, say, relying on owning heavily leveraged properties? Would the particular bank want to set a general policy to accept young successful applicants when they know in the market, it consist of generally normal individuals as opposed to high net worth individuals.

Again, all these are risk factors that the bank set themselves. Its all about probability. And that's the reason why normal home loans are targeted to normal borrowers whereas you have banks dedicating private banking or High net worth customers seperately.

If you have no primary income, the RM5K rental income isn't nett income. You still have to pay your living expenses from the rent so banks will take that into account.

That should be the correct statement.

There is a saying ....

Accountant can never be businessman and vice versa.

This post has been edited by mini orchard: Aug 22 2021, 11:05 AM

Those are different lah.

Different in what ?

And just to add on, it's not about risk assessments. It's also about the strategy the bank is embarking. For example, they may have a vision on just targeting specific customer segments. So those risk factors and ultimately risk appetite are tweak to be aligned to those customer sectors.

There are so many banks to submit an application. If the final aim is to get the loan, paying a slightly higher interest shouldnt be a concern.

Credit leasing companies are major lenders to higher risk borrowers.

This post has been edited by mini orchard: Aug 22 2021, 11:14 AM