Been considering for awhile now..
Since I'm studying in tar college setapak now, and I'm going to move out with a group of my friends, is it worth buying an apartment, and rent the other rooms out to my friends..?
I might be continuing to UTAR afterwards, so I can keep living there and renting the rooms out..
When I leave the place the next 4 years, I can sell it and earn (if it appreciates)..
You guys think there's opportunity for this in ss2 wangsa maju..?

I thought you've asked the same question before.
I would say yes provided you have planned properly.
Another point for consideration, how are you going to repay the monthly loan repayment?
I would reckon that your rental wouldn't be able to cover it.
But if it's possible, than bravo!

Also, I wouldn't suggest selling after you've moved out of the area if you really did bought a property there.
Rental yield is quite good in the surrounding area.

Buying, maintaining, renting and later disposing of a piece of property can be very tedious. Are you prepared to commit the time, effort... and money upfront?

BTW do check out this simple calculator... to determine if its worth to rent or buy a property...

http://forum.lowyat.net/index.php?showtopic=470478&hl=

IMHO honestly for just 4 years you might as well rent and save yourself the trouble...

Alternatively you could rent a house and sublet it to enough ppl so you don't have to fork out any money for rent or utilities... Why fork over so much money to buy ??

This post has been edited by aaronpang: Sep 18 2007, 02:51 PM

This is a good idea.
That's what I did also in my study days. Though it does not let me stay for free, but it eased a lot of my expenses and burdens.
But there would be unavoidable risk in the sense that you'll need to pay the whole rental amount if someone decided to back out from renting. But hey, that's the same even if one decided to buy 1 property and let off certain rooms.
That's the dangerous part and risk regarding rental income.

This post has been edited by b00n: Sep 18 2007, 02:56 PM

Jordy mate,

whats the selling price and the rental for this particular property u r looking at? That way we can see if its really wort ur while.

Numbers dont lie

Well, the apartments there cost between 90k-120k..
They are 3r2b, so can fit in 6 people comfortably..
Most of my friends are living there, so I guess that's one of the hottest area for KTAR students..
Rental for one lot is between 500-600 I see..
So that works out to around 7%..

If I buy it, I might be able to sell out at the current price or a bit of premium..
Not sure about property though, just starting to understand it..

IMO 7% rental yield is too low... after deducting the maintenance fee and misc expenses, the net is very little only. All you can hope is the land appreciation. But rmb its apartment, not landed house.... Not worth it IMO.

Come come we go BRJ yam cha.

What does this mean..?
Misc expenses like what..?
One thing that I'm worried about is that UTAR is shifting to Kampar soon..
So will that affect the market price for properties there..?

im with ejleemy on this, at 7% gross yield not really worth the effort. This is before UTAR shifts to Kampar.

however, if you can get a unit below 80k (9% yield) then its definitely worth looking at

Great..
Looks like I have to really look for other opportunities..
Thanks to those that replied..

But someone mentioned that I can rent the property for myself, and re-rent it out to my friends..
How does this actually work..?
Normally would this end up as gain..?

Meaning you rent the unit directly from the landlord.
Then sub-lease the rooms to your friends.
Collect rental(inclusive of water, electricity & maybe Streamyx) from them.
Assuming you rented every available room out, the collected rental should be able to cover the rental you're paying the landlord, ie. you stay for free.

Of course, collecting rental & paying utilities bill would be your job & responsibility.

Then no need agreements between me and my friends..?
The agreement is only between me and the landlord la..?

yup, and that will be a major headache for you.

TS just have to be smart about it... take the same contingencies as any good landlord would...

Put everything in writing...(even if its not legally binding) also think smart collect deposit 2months at least... put deadlines for rental collection and screen/background check potential house mates.

Get their parents/guardian contacts if anyone doesn't pay a friendly phone call should typically resolve the matter.

He can get the parents contact under the guise of emergency contact in case of emergencies bla bla bla...

Since he's renting and not servicing a loan the risks and liabilities are smaller and easier to manage IMHO.

Wow, very detailed indeed..
So with that apartment I was talking about, how much do you think I could sub-lease the rooms for..?
If I do too high, they might go to other landlords..?

that, you have to survey yourself right?
Try asking around how much others are paying for their room. (plus their utilities fee etc)

Easier said than done. When it comes to frens, usually involves emotional attachment. He'll be better off renting to complete strangers, IMO

Yeah, IMHO it's better to rent to complete stranger cos if anything happens maybe will affect friendship.

which apartment ni wangsa maju that cost that price nowdays ?

The flats here costs around there, i.e. Wangsa Maju. But the terrace link house in Desa Setapak had grow substantially in recent years where it's selling prices are over 120k. Almost 100% increase if one is to buy it 10-15 years earlier.
But pls be remember that most properties in Wangsa Maju is leased hold which I think had gone through 20-30 years (not so sure about it). So living the tenor of 60+ odd years.

This post has been edited by b00n: Sep 22 2007, 02:08 AM

UTAR setapak won't be shifting to kampar.... i mean utar setapak only been there for about a yr... why build when they got plans to shift? extension for tarc perhaps?

as i known only UTAR sg long and PJ will be shift to kampar

It won't affect the market price... if Utar setapak happens to shift... it will be foolish to left empty over there... the average numbers of student will remain unchange...

out of topic : since when ur studying in tarc? i just finish my resit paper over there.. haha

Please be very careful about the agreement stuffs... if something happens it will be very messy....

It happens to my friend before... and we had to consult our LAW lecturer for guidance... i can't even tell u what was the situation at that time because itz just too confusing to fully understand...

How come u are so sure that the campus wil not shift?

Well.. the reason is in my previous reply...

IF their planning to shift why they wanna set up UTAR in setapak in the 1st place?

the rumor of all the UTAR shifting to kampar has been around for almost 2 yrs...

and if i'm not mistaken utar setapak is complete somewhere around between 2005-2006??

It they really shift... the building there will be served on a different purpose.. extension of tarc?

if i may allow to add some points here..

1. rental income is a very good source of passive income. make sure you start with a +ve rental income properties.. it depends on the calculation model.. if you can make a profit with 10 month's collection to cover all the cost for the whole year.. that's a good model to start with (basically, the 2 month is the vacancy gap cost)

2. renting to students may not be the most ideal tenants to choose.. you'll get a whole lot of damage and may have to spend alot of time to coordinate rental collection.

3. and if those students are your friends.. it will even cloud the situation further.. you've to be certain that everybody understood their contribution/obligations.. "friends are friends but business is business" if you can't make the call, be prepared for leakages to your profit..

4. have you been a RA(residence assistance) before? that would certainly help to run such a setup.. student rental (with stay-in landlord) properties.

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Added on September 24, 2007, 3:05 pmbecareful with sub-leasing.. it's not a given, if you rent a place.
some tenancy agreement forbids sub-leasing.. (i have such clause with the tenancy agreement that i conduct with my tenant and i explicitly voice this as pre-agreement to lease)

if you're the leasor.. you wouldn't want a sub-lease on your rental properties as it complicates responsibility and accountability.. and to some extend, collection.

This post has been edited by lwb: Sep 24 2007, 03:05 PM