News & Articles How to Make Money in the Malaysian Property Market

How to Make Money in the Malaysian Property Market


13 Jul 2017
How to Make Money in the Malaysian Property Market
There is actually not 1 or 2 several interesting strategies by which you can make money through real estate investments in Malaysia. The trick lies in finding your niche and then excelling at it. My advice to you is to specialize in two or three strategies that suit your unique investment profile. The following is a brief overview of some strategies that you can use to create wealth.

1.Buy from Developers : Many people have made money using this simple strategy as property prices tend to rise 20% to 30% by the time the property is handed over a few years later. To succeed using this strategy, it's extremely important to buy from the right developer, the right product type, in the right location and at the right time or price.

2. Invest for Rental Returns : Your best bet is to go for medium to low cost apartments near railway stations, factories or colleges where there is a pool of ready tenants. It's fairly easy to get returns of 7% - 9% p.a. and it's even possible to buy such properties with zero or little money down and with positive cashflow.

3. Invest for Capital Appreciation : The properties that give the highest potential for appreciation are landed properties .Unfortunately, the rental yields are not great and if you take the maximum possible loan ,you will usually end up with negative cash flow. This is high risk in case something happens to your earning ability. Hence it's extremely important to get your timing right when buying such properties.

4. Buy Commercial Properties : If your budget is above RM 1 million, you can shift your focus away from the residential to the commercial property market . You have many choices ranging from landed shop-lots, retail shop-lots in shopping centers, offices and industrial properties such as factories or warehouses. Depending on the property type and location, it's possible to get zero monthly cash flow with a minimum down payment.

5. Buy Foreclosures or Auction Properties : There are many properties being put up for auction these days. Many are being sold below developer's prices and some even below construction cost ! It's important for a potential buyer to physically inspect the property for any problems or hostile occupiers and understand the detailed terms and conditions in the Proclamation of Sale.

6.Renovation Strategy - This is one of the creative strategies in real estate investment . There is a lot of money to be made in renovating or buying run-down properties and sell them off after renovations have been completed.

7.Investment in Raw Land : If you have too much money, this could be a good strategy for you to consider to preserve your family wealth, especially if you are fearful your children may spend their inheritance away in case something were to happen to you or your spouse. You could take your surplus cash and lock it up in raw land in places where you know it may take another 10 or even 20 years for the growth to reach property. Hopefully your children would be financially matured by then.

8.Buy Agricultural Land and Sell them off as Homesteads : a graduate of mine made good money many years ago using this strategy. He would snap up cheap farm land from desperate farmers. Once he had accumulated all the neighboring farms, he would clear the land and plant durian seedlings on them. In the meantime, he would instruct his lawyer to amalgamate the various land titles and then sub-divide them into plots of 1 acre each. He would then approach his clients and sell them the idea of buying a durian orchard where they could go over on the weekends to enjoy the fresh country air and eat durians to their heart's content.

9.Buy using Little or No Money Down and with Positive Cash Flow : If you are patient enough and are a good negotiator, it's possible to succeed using this investment strategy. All you need to do is buy 1 such property every 1 or 2 years for the next 5 to 10 years to succeed.

As You can see from this short article, there are many real estate investment strategies . You must learn specific strategies on how to invest and also pick up tips on avoiding costly mistakes. The most aspect of real estate is the education factor. Learning as much as you can about real estate investment is the single most important factor to your success. After all, the best real estate you can ever invest, is in the real estate between your two ears... that is your mind !

Source: Milan Doshi

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