To further add on the the 50-80% of monthly instalment covered by rental: This only applies if the monthly instalment does not exceed 1.8k - 2.5k, and even then it's still far from ideal.

The idea is that you can collect rental to cover interest rate and then later a decade later you flip the property (sell it off) and get a decent chunk of profit from the subsale.

This is somewhat risky and only works if you're not financially burdened elsewhere+have healthy savings and investment to fall back on in the event you're forced to sell at far below market value/sell early/get no tenants for too long.

For something like Livista which is a high end, high price property, the subsale for that kind of price moves too slow + your comment about your salary means the monthly instalment is priced far above your affordability to make it a sensible investment.

dont waste your money!

nah...i just kidding, give TS an option to go shortcut

Let’s just say TS numbers are completely off. Somehow he’s gotten the idea that 1.5k rent is ok for a mortgage of an 800k+ property. That describes a 1k sqft property in Sqwhere. It indicates there has been a failure of some kind and people will still buy whatever.

great advices.

but are there condo with 700-800k value and still can cover at least 80% of the instalment now?

1.5k for 800k prop?

Keep in FD la don't waste time.

People in that salary bracket would not rent.
There are more homeowners in that range.

Cheap properties like apartments usually better rental base

Only if you rent to high-income expats, which are very few and far between.

90% loan of RM700k property over 35 years for 3.5% interest = around RM2.6k++ for just monthly instalment

Once the rental rate reaches RM1.7k++ usually you won't find many whole-unit renters anymore in KV, because if can afford that monthly rent, the potential tenant actually can afford to buy an affordable/first home scheme property plus maintenance fees, and there's plenty of property in the "first home" price bracket (under RM500k).

Which is what most families will do, unless they have some strange circumstances like bankruptcy or undocumented or bad credit.

i'm being prudent with the rental, just one of the worst case scenario

though i could swap to a cheaper unit less than 750k

yea this is one of my concern too

if the market is unwilling to pay for beyond 1.7k rental wouldnt that render most investment for 700k+ high rise unworthy?

This post has been edited by coconutxyz: May 31 2023, 08:09 PM

It really depends on how it's done.

Many of these expensive condos, if the location is good, are typically used for Airbnb/short stay investment, since a fancy looking unit with fancy facilities is more likely to tempt tourists (or influencers and photographers that want to use room/facilities for photos).

Just renting out 7 to 10 days a month at RM300 per night can cover instalment, after deducting cost of cleaning and Airbnb fees.

Alternatively, you subdivide a more spacious condo by building partitions with doors and added sockets built into the partitioned rooms in the living+dining areas, turning a 3 bedroom condo into a 4 bedroom or more, then rent out by room. At RM500 - RM700 per room, you can cover instalment. This is an old tactic used in bigger older condos, and it's now commonly used for "co-living" agencies like Utopia or Wetopia.

Both methods usually bring much heavier wear and tear, because both target markets tend to be less careful about maintaining unit/furniture/facilities. Partitions are a safety/fire hazard due to forcing so many people to live in one unit while the pathways are hard to navigate around, in the event of accident it really can become a death trap. AirBnBs are REALLY unpopular in condos where there are a strong own-stay owners community because Airbnb is viewed as a security hazard with the high volume of strangers accessing the place+such guests usually disregard rules in using facilities, if the owners group have enough voting power they can ban Airbnb, making the whole unit a waste if your primary investment strategy is Airbnb.

Both are also more demanding and require owner's active involvement in marketing out property and managing the stay/room rents on a per stay/per tenant basis, the complete opposite of "passive" long term renting.

Both typically also demand that the property has more accessibility to public transport and amenities, because both markets usually place much higher emphasis on convenience than typical long stay tenants.

If you buy expensive condo in a more isolated place that has little to no easy access by public transport, then cannot really target these two possible markets.

Personal preference, will not consider any unit with gross price over 800K for investment purpose.
It's too risky and you will bleed more money every month.
If you can get rental 2.5K a month, still need top up at least 1K a month.
One year bleed 12K on prudent side, 10 years already 120K.
In the next 10 years will your property appreciate for 120K?
Even if can reach that market price, who willing to buy a sub sale unit for that high value property.
You need cash for 10% deposit, lawyer fee 20K++, stamp duty 12-15K, and other miscellanous expenses.

Why not consider rent a RM1,200 or RM1,500 or RM2,000 unit, do sublet?
Gain some pocket money.
More gunho one can do partition and rent out more rooms in prime location.

This post has been edited by ck2chan: Jun 1 2023, 02:01 AM

Sublet is illegal.

once the investment need to use illegal way to earn extra income... it really not a good practice

Sure, it's illegal as per tenancy agreement.
Even your tenant go rent out your extra parking is consider illegal right?

Still they are many guru out there promoting and teaching how to do sublet or partition.
They project very good income from the sublet business but silent in that if no one rent, you still need to bear the rental cost.
They never tell you about the maintenance cost for repairs and etc
Do so much for a few hundred pocket money

Which come back to my earlier advise, 1.5k rental for 700k investment. Better put in FD and enjoy life. 😁 Why susah2

Correct.
Put in EPF, gold or stock with good dividend record is good enough.
Haha, no need so susah susah.
Managing the property and tenant is hell of a ride.

Highly suggest you to marathon Sean Tan's youtube video. And then continue to do homework by doing more research. Pretty you will equipped with better ideas and thoughts whilst searching and visiting properties, and you will find your answer.

you may want to consider who will be the next buyer that willing take over your property too, dont just focus rental only.


690 sqf - 2 bedroom 1 bathroom 1 carpark -> this type very easily rentout with no doubt, most of the single/young couple will choose for renting, but potential next buyer mostly gonna be investor, for ownstay buyer they would prefer 3 room layout.

1036 sqf - 3 bedroom 2 bathroom 2 carpark ->this type is more flexible, you can rent out by room/whole unit/make extra room, and potential next buyer would be investor/ownstay, because the room/layout is practical. and you can consider make it your ownstay unit in future when got a family. win win.

Well yea that’s location specific. So your usual suspects like MK, DPC, Bangsar South, KL city etc. A 3.5k mortgage equates to roughly 800k++ property.

Otherwise you have to reverse engineer the rent to solve for the maximum purchase price. If units in an area can only rent for 1.5k then you wouldn’t want to pay more than 500k for it. If you die die want to buy something that is 800k then buy in prime location where u can guarantee strong rental otherwise u should just buy cheaper.