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malaysia property investment guide

  • Auther Image by Bappy
  • December 12, 2017
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    The Complete Guide to Investing In Malaysia Property

    The Complete Guide to Investing In Malaysia Property

    MALAYSIA PROPERTY INVESTMENT GUIDE

    Securing your future from a financial point of view means to invest your money into assets that can multiply them as years go by, investing in real estate is the best example in this case.

     

    Don’t you agree with this? This is how most rich people made their fortunes and now it is time for you to do the same.

     

    Although it sounds like an easy task to do, investing in properties is not a straightforward procedure, as you need to have a few aspects in mind before closing a deal.

     

    You need to know the market’s current conditions and be able to envision your future at the same time.

     

    When it comes to investing in a Malaysia property, you came to the right place.

     

    What you are about to read is a comprehensive guide on how to make such an investment in a smart and profitable manner, keeping risks to a minimum.

    WHY INVEST IN A MALAYSIA PROPERTY?

    property investment calculator malaysia

    Malaysia started to attract a lot of investors lately, a phenomenon that is happening due to a variety of good reasons.

     

    If you know why it is right to invest in a Malaysia property, here are all the reasons you need for making such a choice.

     

    • Malaysia has a very favorable geographical position

     

    Located on the Asia-Pacific region and a member of the ASEAN, or The Association of South-east Asian Nations, which is an organization that supports and facilitates the economy, education, politics, and other important aspects of the member countries, Malaysia has a very bright future.

    With all the support the country receives from ASEAN, it is expected for it to enjoy great economic growth and become the next hot spot of the area in the real estate domain.

     

    • It has a great business environment

     

    According to the World Bank, Malaysia is not ranked the 6th more favorable and friendly country when it comes to the business sector, jumping to this current position from the 16th rank, where it was situation last year.

     

    This proves that the country is depositing a lot of effort in triggering the desired growth and becoming a prosperous country with great living standards.

     

    • The affordable property prices are attracting more and more investors into the area

     

    In comparison with neighboring countries, Malaysia still has great property prices that make property investments here very desirable.

     

    In other words, you don’t need large amounts of money to start a business in the real estate market in Malaysia.

     

    • The country is evolving in the desired direction

     

    Malaysia is doing everything it can to evolve and this can be seen already.

     

    The political environment is calm and stable, it enjoys steady economic growth, and is on track with its Economic Transformation Program.

     

    • Property prices are on the rise, in spite of the slow developing economy

     

    While the economy of Malaysia is growing slow, but steady, prices in Malaysia property market are increasing at a faster pace. This means that there is sufficient demand in this market that needs to be met.

     

    In the last 2 years only, the increase in property prices went from 5% to 10%, and it is estimated that this trend will continue to go up in the coming 5 to 10 years.

     

    • The rental yield is stable

     

    If you rent a property in Malaysia, you could easily obtain a rental yield of 4 or 5% every year, an aspect that remained stable for the past years and is still the same in present times.

     

     Although, if the demand for residential properties continues to increase, so will the rental yield.

    CAN FOREIGNERS INVEST IN MALAYSIA REAL ESTATE?

    Business concept vector illustration. Investing, real estate, investment opportunity concept. Elements are layered separately in vector file.

    In case you checked out other countries in the Asian region for potential property investments, you probably know that it is very difficult to own land there as a foreigner.

     

    Well, when it comes to Malaysia, things are very different, as it is the only country where you can actually buy and own land as a foreign investor.

     

    So, there’s no need to invest in a condominium only, when you can also purchase townhouses, villas, and land as well.

     

    But, even so, there are a few rules when it comes to owning land, as it is considered a different category than the ones including condos and houses.

     

    One of the first rules applied when it comes to purchasing land in Malaysia is that you can only do this kind of purchase if you meet the minimum purchase requirements.

     

    This means that there is a minimum threshold in this sector, pushing foreign investors toward the mid and high-end sector of the market.

     

    This was made this way so that the prices for ordinary houses, affordable to Malaysians with an average income, won’t increase and go out of their reach.

     

    Thus, in 2017, the minimum price was RM 1 million or approximately $225,000. But, there is an exception when it comes to the State of Selagor, where the minimum threshold is RM 2 million and foreign investors can purchase land in gated communities only.

     

    In addition to this, foreign investors will not be able to buy land that is reserved for the Muslim Malaysians, which are an ethnic group in Malaysia. The land for this ethnic group is known as “Bumiputra”.

     

    It also not allows for expats to buy agricultural land or properties that are assessed as being part of the low and mid-range by the local government.

    REASONS FOR A FOREIGNER TO INVEST IN MALAYSIA

    property investment in malaysia
    • You can take advantage of the MM2H program

     

    The MM2H program was specially developed to stimulate property investments in Malaysia, including of foreign investors.

     

    It offers quite a few advantages, such as the removal of tax on capital gains in the case of properties that are owned for at least 5 years.

     

    • Newly developed residential units bring a good rental yield

     

    Malaysians love newly built units and they are willing to pay the price to rent them. Thus, the new units can bring a rental yield of up to 10%, which is great in comparison with older units.

     

    • The capital appreciation in some states is great

     

    Some states in Malaysia provide great capital appreciation, of even 35%, which is much higher than the national average of 25 to 30%.

     

    And things are expected to remain the same in the following years, which is good news for investors that are looking for long-term deals.

     

    • There is a wide range of options when it comes to financing services

     

    If you need finances to launch yourself in the Malaysian real estate market, by buying property in Malaysia, there are quite a few options to choose from.

     

    There are both local and western banks that provide the traditional mortgage or you can opt for the mortgage services provided by the Islamic banks, which are mostly preferred by expat investors.

     

    • The overnight policy rate (OPR) remains unchanged

     

    The economic stability of the country can also be seen through the fact that the Bank Negara Malaysia managed to keep its overnight policy rate stable, at only 3%, over the past 10 meetings.

     

    • Foreigners can buy land at affordable prices

     

    Not only are foreigners capable of buying land and freehold properties in Malaysia, but they are also able to get them are very accessible prices, in comparison with the properties available in neighboring countries.

     

    • Luxury properties along the seafront are very attractive in terms of price

     

    One of the main reasons foreign investors choose Malaysia is because they can afford high-end, luxury properties with a gorgeous view of the seafront here.

     

    The prices are accessible, which enables them to get the kind of properties that they could not afford back in their home country.

    HOW MUCH ARE PROPERTY TAXES IN MALAYSIA?

    malaysia property investment blog

    The advantage of enjoying small property prices in Malaysia comes with the disadvantage of having to face rather high taxes.

     

    Residents, for example, have to pay a rental income tax of 20%, while non-residents have to manage a higher rental income tax, of 25%.

     

    If you want to sell a property, you will have to pay the Real Property Gains Tax, which is 20% if you owned the property for less than 5 years in a row, but only 5% if you were the owner of the property for more than 5 years.

     

    So, owning a property in this country, like a Malaysia house, is a much better deal than buying and reselling the property.

     

    This measure was taken to prevent short-term buyers’ speculation, which may affect the property prices to the detriment of the locals.

     

    You will also have to pay an annual property tax, which ranges between 1 sen or $0.002 and 2 sen or $ 0.004, for every square foot you own. But, as you can see, this is not a large tax at all.

     

    In case you want to stop renting a property, there is the “quit rent” tax, which is again small, of approximately 100 Ringgit or $25.

     

    If you own a property on a landed community or a unit in a condominium, you will have to face a maintenance, which depends on various factors, such as location, standards, density, size, and so on. But, this fee usually ranges from RM 4 or $1, per square foot.

    IS BUYING PROPERTY IN MALAYSIA SAFE?

    malaysia property investment guide

    If you want to invest in a property market that is safe and has all the support of the local government, then Malaysia property market is the one to choose.

     

    The system is extremely safe and you’ll hardly encounter any issues.

     

    If you will encounter any problems, they will usually come from your unit’s developer or builder, and not from the local authorities.

     

    To avoid such issues, you should opt for working with a reputable company that has experience in the constructions sector.

     

    Also, do know that all newly built constructions must come with a warranty, provided by the developer, which gives you the certainty that standards are respected.

     

    How to check if a developer is reliable? Take a look at the Bursa Malaysia, which is the local stock exchange.

     

    The company names listed there are trustworthy, the country having 12 different companies listed on this stock exchange in present times.

    MALAYSIA MY SECOND HOME (MM2H)

    property investment in malaysia

    The MM2H program or Malaysia My Second Home was created with the purpose of erasing some of the obstacles foreign investors had to face when it came to investing in Malaysia properties.

     

    Thus, a foreign investor can now obtain a visa for a longer term, for themselves and their families as well, if they plan on investing in Malaysia.

     

    The visa can be issued for a 10-year period and renewed unlimitedly.

     

    Still, there are some rules that come along with this program. While it offers a permanent residency, you cannot work in Malaysia, unless you’re 50 years old or older, as the government seems to prefer retirees.

     

    If you don’t fit in this age group, then there are certain requirements you need to meet:

    • You need to have purchased a property that has a value of at least RM1,000,000;
    • You need to have evidence that you paid the property and you are its owner;
    • The purchase must be done within 5 years since you applied for obtaining the MM2H visa;
    • You will need to make a Fix Deposit in a Malaysian bank of RM150,000 if your age is under 50 years old and RM100,000 if you have 50 years old or above.

    IS MALAYSIA PROPERTY A GOOD INVESTMENT?

    Close up of young broker showing contract for buying house

    Considering that Malaysia is located in the busiest shipping lane in the area, which indicates a great position for its economic development, yes, investing in Malaysia property is a good thing to do.

     

    The country is also home to one of the strongest Islamic bank in the world, while also enjoying great capital coming from the Middle East, so it has all the support it needs to develop successfully.

     

    Even though this is the moment to start buying property in Malaysia, not very many investors know about this opportunity.

     

    So, if you want to make a move that will push you ahead of everyone else, you need to consider investing in Malaysia.

    WHY INVEST IN MALAYSIA NOW?

    property investment market malaysia

    After a period in which property prices in Malaysia decreased, starting with the last quarter of the previous year and the first quarter of the current year, they started to record increases.

     

    Considering that the trends are starting to go up, now it’s the time to start investing in Malaysia, so you will already own properties when prices will enjoy considerable price increases.

     

    At the moment, the average marginal increase in Malaysia is of 0.2%. Of course, this increase is different from one location to another, some cities enjoying a larger increase than others.

     

    One thing is for sure and that is the fact that prices are going to increase in the coming years, as shown by statistic and existent trends.

     

    So, if you want to invest small amounts of money and enjoy great profits in the future, this is the best time to do it.

    PROJECTS TO INVEST IN PHNOM PENH MALAYSIA

    OXLEY TOWERS KLCC

    After a period in which property prices in Malaysia decreased, starting with the last quarter of the previous year and the first quarter of the current year, they started to record increases.

     

    Considering that the trends are starting to go up, now it’s the time to start investing in Malaysia, so you will already own properties when prices will enjoy considerable price increases.

     

    At the moment, the average marginal increase in Malaysia is of 0.2%. Of course, this increase is different from one location to another, some cities enjoying a larger increase than others.

     

    One thing is for sure and that is the fact that prices are going to increase in the coming years, as shown by statistic and existent trends.

     

    So, if you want to invest small amounts of money and enjoy great profits in the future, this is the best time to do it.

    WHY INVEST IN OXLEY TOWERS KLCC

    • Freehold tenure in Kuala Lumpur prime area.
    • Built by Singapore based Oxley Group.
    • Beside Petronas Twin Towers, the most key site in the whole Kuala Lumpur.
    • Special style and facade design, one of its kind in Kuala Lumpur.
    • Luxurious hotels and residential operated by world’s renowned Jumeriah Group.
    • Kuala Lumpur is the most popular property investment desination in Malaysia.

     

    Click Here To View More Details On Oxley Towers KLCC

    THE COLONY INFINITUM

    The Colony by Infinitum is a FREEHOLD mixed development located along Jalan Sultna Sulaiman, just next to Quill City Mall and Medan Tuanku LRT which connects The Colony with Bukit Bintang shopping malls such Lot 10 and Pavilion. Petronas Twin Tower and Suria mall is also within 5 minutes drive. The Colony by Infinitum (or Wisma Infinitum) is a project by two renowned Singapore developers, Macly Group and Roxy­Pacific, to make an iconic skyscraper with total 723 units of SOHO and 31 units of commercial shop lots.

    The Colony is surrounded with amenities that are both good for business and SOHO unit owners. Shopping malls, restaurants, banks, supermarts, schools, and public transportation are easily accessible as they are only a stone’s throw away from Wisma Infinitum. Shopping malls nearby include Maju Junction Mall, Fahrrenheit 88, Starhill Gallery, Quill City Mall, Pavillon KL, Berjaya Times Square, Kuala Lumpur City Centre (KLCC), and Bukit Bintang Shopping District. Prestigious schools and universities are also in close proximity, including Open University Malaysia, Asia School of Business, Universiti Kuala Lumpur, International Modern Arabic School (IMAS), SJK (C) Chung Kwok, and Universiti Malaya Kampus Kota.

    Every unit is Dual-Keys in nature! The Dual-Keys a very popular, new housing concept in Singapore, as it provides great flexibility for the buyer on how to use the space, i.e a homeowner can stay in one side of the unit, while renting out the other for passive income. Or the space can be used as an office.

    The units will be spread across two towers. Tower A is 33 storeys with 423 units, while Tower B will have 43-storeys with 300 units. The target market are investors and young working adults in their 30s who do not have a family yet and likes living in the city. The Tower A units range from 705 sq ft to 1,155 sq ft, with a majority of them in the 705 sq ft and 945 sq ft range.

    WHY INVEST IN THE COLONY INFINITUM

    • One of the Tallest 43-storey high buildings in KL that will change the KL skyline
    • Luxurious facilities spread over 2 skydecks, including the Infinity pool at very high 35th floor, offering unblocked views of the KLCC Petronas Twin Towers
    • High-End Mixed Development with 3-storey Shopping Retail mall
    • Popular & successful DUAL KEY design for 1-bedroom & 2-bedroom units for greater flexibility, higher rentability and higher rental yield
    • Established & Reputable Singapore Developers, Roxy-Pacific Holdings and Macly Group with over 20 years good track record
    • Financing Supported by banks in Singapore (UOB & Maybank) or from several banks in Malaysia
    • Comprehensive range of facilities — a Swimming Pool that overlooks the Petronas Twin Towers, as well as a Steam/Sauna Room, Gym, Wet Deck, Jacuzzi and Internet/KTV Room
    • Located right beside the latest lifestyle destination in Kuala Lumpur — Quill City Mall, which has an impressive lineup of stores including major International labels and other lifestyle necessities (partly managed by CapitaLand)
    • Within 5 minutes drive to Kuala Lumpur City Centre (KLCC), Bukit Bintang and Kuala Lumpur’s major attractions
    • Short walk to the monorail station in front of Quill City Mall allows for seamless access to Kuala Lumpur Sentral Interchange and Kuala Lumpur International Airport
    • A stone’s throw away from Asian Heritage Row and shopping belt Bukit Bintang (the “Orchard Road of KL”)

     

    Click Here To View More Details On The Colony Infinitum

    SUASANA MALAYSIA

    Suasana is the newest and most exciting integrated development to grace the Johor Bahru City Centre (JBCC) skyline. The development will integrate serviced residences, an entertainment and retail hub, as well as feature the first of Amari’s hotel line in the country. Slated for completion in 2017, Suasana is poised to become the most exciting spot to live and work in the southern city.

    Within the 36-storey tower is the serviced residences of Suasana, where its wide range of unit types are sure to meet the requirements of every homeowner or investor. The Type A collection is made up of 1-bedroom and 1-bathroom units, with 7 different layout to choose from. The cozy residences come in built-up sizes of between 644 sf to 707 sf, ample for an individual or married couple. The Type B units offer 2-bedrooms and 2-bathrooms, with sizes of 823 sf to 988 sf, where the 4 layouts are suited for any small family. For those who want a little more space, the Type C range comprises 3-bedrooms and 2-bathrooms units, with the 2 layout choices offering 1,115 sf and 1,235 sf of space respectively.

    The serviced residences of Suasana come complete with air-conditioning, and are semi-furnished with an equipped kitchen, as well as bathroom with quality vanity fittings. Buyers will also have a choice of buying a unit fully furnished. Every unit is equipped with Samsung’s SMART HOME system, and comes with a 1GB Fibre-To-Home internet service. Residents will also have access to facilities like a swimming pool and gymnasium for some leisurely unwinding, as well as a sky deck which enables enchanting views of the city below. Services like a 24/7 concierge is also at hand, while a retail service akin to “room service” is also ready to take food orders and deliver them to residents.

    The retail podium houses the commercial component of Suasana, comprising 20 double-storey retail lots which are undeniably functional and flexible, with a range of sizes to suit all business needs. From compact units of 206 sf for ventures like newsstands and juice bars to gargantuan spaces of 13,323 sf for a grocery store and boulevard-side shops with spaces for alfresco dining, Suasana has it all. Catering to the population of the serviced residence while appealing to visitors who stay at the hotel, the commercial lots at Suasana holds much potential, and will be a sound investment as Johor Bahru continues to move forward.

    WHY INVEST IN SUASANA MALAYSIA

    Suasana Iskandar cements itself as the only residential property in the shopping district of JB city center. With an Integrated Transport and Transit Hub as well as an MRT/LRT system, commuting around the city and even to Singapore will be a breeze. Being just a stone’s throw away from the CIQ and the ‘Orchard Road’ of JB, Suasana promises ease of access and convenience all around.

    Nestled at the heart of Johor Bahru City CentreSuasana prides itself as the only integrated residence development closet to the Johor CIQ to Singapore.

    Centralized within Jalan Wong Ah FookCity Square Shopping Center, JB Sentral, PERSADA International Convention Center and a myriad of new retail and office developments, residents will enjoy a host of benefits within the locale.

     

    Click Here To View More Details On Suasana Malaysia

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