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 Need advice on my first home

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nihility
post Apr 14 2022, 07:12 AM

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Property selection, the priority if according to my preference :-

1) Location

Location like what mini orchid have pointed out, it can be gauged based on the how extensive the existing infrastructure available - accessibility using road, highway, public transportation (MRT, LRT, etc). The routine trip from your house to workplace, usually the couple will select the location in between.

Location also cover the elements like the accessibility to the following:-

a) banks / finance institution - ease for financial dealing
b) commercial area - shopping mall / hypermarket / hypermarket /shop lots - for grocery, foods & place to hang out
c) education institutions - public university / private universities/ colleges - * for investment, investor often look for this element.
d) healthcare institutions - public hospital / private hospital - for medical treatment
e) tourist spots - for investment, investor will look for possible to turn the unit into AirBnB.
f) neighborhood - this one many ppl overlooked. The experience one will put this as the highest priority after their experience dealing with house break-in, neighbor from the hell, etc. We usually prefer more civilized & educated neighborhood to minimize the bad living experience. Do not be surprise if buyer inquire about the background/occupation of the unit next door.
g) recreation spots - public park, gym , etc

2) Affordability

After the location, you have to work out the affordability / budget. Usually the following need to be considered :-

a) Down payment - 10% of the property purchase price
b) Loan financing - 90% of the property purchase price. When you go to loan / borrowing, you must be clear with the following :-
i) why you want to borrow - to finance the purchase of the house
ii) how much you want to borrow? -90% of the purchase value
iii) when do you need the money?
iv) how long you want to borrow? - stretch it to the maximum tenure 30~35 years ( to minimize your monthly commitment)
v) how you intend to repay the bank? - your monthly repayment shall < 1/3 your net salary. If more than that, you cannot afford the loan / house.
c) Set aside another 5% of the cash in hand for the legal fees for the Sales & Purchase Agreement (SPA), Loan Agreement, Memorandum of Transfer (MOT), Stamping fees. A lot buyer overlooked this element.

3) Type of the property

This element usually will overlapped with location & affordability elements. You can consider the type of property from :-

a) landed terrace - Strata or Individual
b) apartment / condo - Strata

The main different between Strata & Individual Title

Strata - have house rules & maintenance of the neighborhood is by the community. The owner have to pay monthly maintenance fees & sinking fund to up keep the neighborhood.

Individual Title - there is no maintenance fee. The maintenance of the neighborhood is by the Local Council.

After that, you need to consider also land title type, either is is leasehold or it is freehold.

Leasehold - usually 99 years lease from State Government. At the end of the tenure, government can take back the land without compensation. The lease premium is usually cheaper, hence the unit is usually cheaper ( some place are equally expensive ).

Freehold - no limitation of the lease period. The lease premium is usually more expensive, hence the unit is usually more expensive. Usually developer with plantation landbanks can offer such unit like Sime Darby & KLK.

Do that note, even though title can be Lease Hold or Freehold, the title are still subjected Land Acquisition Act. If State Government want to take back the land, be it freehold or leasehold, they can take it back anytime for state development with the compensation of market rate to the owner.

Landed unit is usually more expensive vs condo / apartment with the same built up.

Landed strata is usually more expensive > individual title landed of same built up because Strata Development have common properties like club house, gym, swimming pool, gated community, etc.

 

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