Hi guys

Im a foreigner living here in MY and I have a foreigner friend (from UK) with a capital of 1M MYR and he's considering investing in Malaysia's property market. his main objective is to generate a rental income or possibly use it for ABNB. However, he's unsure if this is a good idea or not ?

If it is a good idea, what kind of property should he invest in? Should he focus on residential or commercial properties? And where would be the best location to buy in terms of zoning and area?

we are aware that foreigners have a minimum threshold of 1M MYR for property investment. Ideally, he would like to purchase two properties with this amount, but I understand that may not be possible.

Your contribution can make a big difference guys

Thank you guys in advance for your advice and insights.

This post has been edited by MBCH: May 15 2023, 06:14 AM

keep in FD

Thanks bro

This is what we were talking about too, as now the FD's % are high and 0 risk. but he argue with the launch of CBDC's and the obligation of having something illiquid. "out of banks"

This post has been edited by MBCH: May 15 2023, 06:23 AM

The laws vary from state to state and there’s even projects that have exemptions from these rules perhaps in tourist zones.

The 1M limit as I know it applies in KL and it goes up to 2M for Selangor. So you do need to zoom in on where he’d like to buy to meet his goals. Then the other side of the question is does he realise how tepid the market is and even locals with a better understanding of the market can also fail in this venture. I suspect expectations need to be reined in and the reality of what he’s after won’t materialise for a while if at all.

I’ve given my glass half empty 2 cents. Now there will be plenty of agents who will give you the overflowing glass version.

At best, the way MM2H retirees view Malaysia is bang for buck. As they will get a much better lifestyle for a given budget depending on which country you’re from. Then you add the relatively low cost of living plus easy access to fly around the Asian region then it’s all gold.

PS. Judging from your other posts you seem more local than a foreigner. Unless you gave up your citizenship.

This post has been edited by Cavatzu: May 15 2023, 10:27 AM

Please don't spoil our property market.

Nah, guide for your friend, scroll down to item 3 "Minimum property price for foreign investment in 2023" in the link and read onwards from there:

https://www.iproperty.com.my/guides/foreign...ete-guide-12332

My dua sen for investment:

The high price restrictions for foreigners buying Malaysian property makes investing via direct purchase in market very difficult to sustain.

The main market for that price point will be high-income executives, of which local execs will be more likely to just buy their own property or rent from locals at a much more favorable price (since current market for both buying and renting is already a bit soft), while foreign execs do not consider Malaysia a very attractive destination to stay/work in relative to other countries in SEA, because we're neither the cheapest to live in nor are we the most developed, on top of being relatively not as foreigner/non-Muslim friendly. At least for the near future lah.

Whether or not this improves, who can say, but we're still poor in competition to attract/retain high-pay execs.

That’s why the MM2H rules were nonsense. Malaysia was by and large seen by expats as a good place for retirement particularly those from the Commonwealth sphere and East Asian countries. Not for high flyers - that would be Singapore.

At least they are learning the error of their ways. Malaysia now has the loosest digital nomad visa.

This post has been edited by Cavatzu: May 15 2023, 12:34 PM

No, fyi i'm not a local, but i have already 5 years here.

Thank you guys for sharing your thoughts we think Malaysia does still offer many advantages, and the rentability is good. but yeah it's essential to consider some of the concerns raised.

One of the prominent issues he mentioned and we all know is the visa situation. It's true that Malaysia's MM2H program make no sense at all compared to other countries in the region. various countries in Southeast Asia offer long-term visas without requiring huge substantial investments making them more attractive.

Additionally, the cost of living in Malaysia is relatively higher compared to countries like Indonesia, Cambodia, Vietnam, and Thailand. This factor should be taken into account when evaluating the overall affordability of living in Malaysia.

But my friend highlighted the rental market in Malaysia, and he says there's good demand with a RM 4-5k / month he believe that Malaysia's real estate market may benefit from future growth, considering the rise of China and emerging countries in Asia. The development activities initiated by the Chinese in Cambodia serve as an example of the transformative potential in the region, attracting people from around the world.

Personally i prefer (FDs) were previously discussed as a viable choice. However, my friend is concerned about keeping cash in the bank beyond 2027, thats why he is exploring property investments as an alternative to diversify and not keeping cash

There are other ways to roll that money given the large amount and his foreigner status. Money market, ETFs etc.

Property in Malaysia has not quite come down from the 2014 high and is still relatively high, which keeps instalment payment on the high end compared to the rental average which is still soft/weak.

Whether Malaysia is able to attract China investment is a big question mark given China's culture being very not Muslim friendly and Malaysia politics still heavily cater to Muslim culture. We have people who complain about having alcohol in convenience stores (there's another ethics discussion about easily accessible alcohol but that's a separate issue), or having a "pig" zodiac year....

This post has been edited by DragonReine: May 16 2023, 12:04 PM

If you think KL has good potential then Bangkok at this point trumps it. The upper end of the rental market pretty much caters to only foreigners on a good income as units half the price are plentiful and readily available.

The only property that will give you the breakeven point are some of the blue chip areas in KL. Even then, it’s no guarantee and you need to be spot on with your micro location dynamics. Now your friend is from the UK, plonking 200k quid on some unit in Liverpool would be safer. People buy in Malaysia if they think that they will live there eventually. As a pure investment it is questionable.

I am also a foreigner and just signed SPA of the Viia Residences that is located KL Eco City,
You can search that property online and calculate the return in abnb

Another couple of things for consideration (pessimistic ones):

1) AirBnB originally developed as a "stay with host that will show you around/give a friendly neighborhood feel", but has become a short-term stay platform that end up cater to travellers that travel in groups, but cannot afford (or don't feel it's worth) to book suites/multiple rooms in hotels. This kind of also means that the target market has shifted to the budget conscious, which pushes down asking prices to compete against budget hotels that also offer similarly low prices with the benefits of a concierge & other services that AirBnBs usually don't have.

The result is that there is a perception of Airbnb attracting "lower class" people that don't care for and will be inconsiderate of facilities (because they don't stay there long term and want to squeeze as much as they can out of facilities use), like what happened with Arte Mont Kiara or many other "investment grade" projects.

Those that have higher percentage of own-stay owners will often move to block/restrict Airbnb, while those that have higher percentage of investor owners will show wear and tear after several years. Investors also notoriously will not pay much for maintenance and/or flip the property early, so maintenance fund often have shortage which causes even more breakdowns.

2) Foreign execs who come here to stay because of work reasons are often subsidized by their company. If accomodations are subsidized, usually the company will choose to deal with hotels and "proper" service apartments run by hospitality groups that offer long term stay packages, because they are more confident in paying corporate-managed fees (which are more transparent about pricing with proper invoicing) than dealing with privately owned Airbnb/rental.

Co-working/digital nomad spaces have become a moderately popular business thing in recent years, so you have places like Komune Living/Komune Wellness and Living (managed by UOA's hospitality arm) and JL Co-Living that offer all the comforts of a hotel at prices that compete with the higher end rentals, with the benefit of "free" utilities, cleaning services, laundry etc.

Personally I've stayed for short term rental at some of these places for work reasons, and with the convenience offered I find it very hard from a business perspective to justify dealing with a nebulous landlord of questionable reputation vs dealing with a company that is easily held accountable if things go wrong, when prices offered are similar or better.

Your chances of losing money as a foreigner investing in properties in Malaysia is much higher than making money.

yaka, but how come your language is so manglish one

Yea some of the written English by these “expats” seem awful. My 10 yo could do better.

But everything is a learning experience Sean is going to UK to buy property and the Poms are doing likewise in Malaysia. See who does better.

Well not all expats are from English speaking countries 😅😅😅

Could easily be Singaporean, or Malaysian descent but family had migrated so not citizen dy LMAO but expat doesn't mean good @ English lah, maybe they're also just good at code-switching

Regardless, unless rajin² background check on forumer, just take at face value n stick to topic.

This post has been edited by DragonReine: May 17 2023, 11:00 AM