Landed House or High Rise Apartment?

Just like any other trend, today, people with lots of money tend to invest on real estate or commercial properties.

*This scenario only valid in Malaysia, further study needed in other country.

1. If you are going for rental business – buy apartment
Apartment costs less, people also opt to rent apartment instead of landed house because of common thought that apartment is way cheaper than terrace house.
Apartments also have one fatal problem, its has low resale value.

If you go for sentiment analysis your target market will only be:

  • a. those who are looking for cheap house
  • b. those who are going for rental business

2. If you go for re-selling – buy landed house
Terrace house cost a lot, and its exponential by factor 2 for corner lot, exp 1/2 for end lot. Semi-D house falls under corner lot terrace. This kind of house has a market pullover in renting value, simply means there is almos always a demand. Landed housing is good for re-sell value, of course – its after you wait for first 5 years to avoid RPGT.

If you would like to increase your house value:

  • a. Have a good condition of kitchen cabinet
  • b. Landscaping can increase its value 5% more than current market
  • c. Tile porch / awning / front gate
  • d. Kitchen extension

The cheapest solution if you buy for the sole purpose of reselling it, spend your money on landscaping.
3. If you want both – buy a shop lot (corner lot)
Corner lot have a double rental value compare to middle unit or end lot and the pricing easily doubles  in value after 10 years. Its only a matter of  strategic location. As what people say, if have extra rod, go to bigger pond, you’ll be easily get bigger fish.

This is a guest post by Zhafri

[LCF Comment Below]
Prudent reminder – property market is almost at its all-time high. Malaysia government has  raised Real Property Gain Tax (RPGT) from 10 to 15 percent, and 5 to 10 percent for disposal within 2 years and 5 years respectively. Singapore government  has recently tightened rules on mortgage lending, when the new ruling shorten loan tenures and lower loan-to-value ratios. See below:

Singapore residential property new ruling
To quote Yap Ming Hui, in his article, What Robert Kiyosaki didn’t tell you:

All the suggestions Kiyosaki made were about ‘what to do’; he never gave concrete advice on ‘how to do it’. For example, you must take on ‘good debt’ to become wealthy. This meant taking on more risk by acquiring loans to invest in properties. However, he didn’t show you how to manage this risk or the investments you made.

I feel that the approach Kiyosaki advocated is muddled and has the potential to be both dangerous and misleading. The closest analogy I can give to illustrate my point is this: you’re put in a Formula 1 race car and told not to be scared as there’s nothing to stop you from driving at the same speed as other Formula 1 drivers. Only, you have never learned the special skills needed to control a race car.

The fact of the matter is that taking on more risks does not guarantee financial success. Fraught with uncertainties, it might get you rich quick, but it can also ruin you. ….Then, like my friend with whom I had breakfast, many have taken out maximum loans with a view to getting rental income and capital gain. Only, they cannot find tenants or buyers and struggle to make the instalment payments to the bank.