Today I talked to 1 junior colleague who bought a high rise property at Bangi which was advertised as KL South. The property occupied quite a huge development area along the North South highway. The property was built a well known developer in Malaysia.
The details are :
Price Purchased : RM 400,000
Bank loans : RM 2000
Rental : RM 900
He bought the property during the hype and is now renting it at RM 900 to a working professional couple.
Just looking at his rental statistics, he is burning cash around RM1,100 per month, 1 year will be RM13,200. His bank installment was around RM2,000 assuming borrowed RM 400K,
This figure does not include the maintenance fees of the condominium he has to pay. Just looking at the location, it is unlikely the rental will increase further unless the developer builds more township support infrastructure like hospitals, schools, convention centre etc. For this case, it is much better to rent than to buy the property. Public transport like MRT, LRT is out of the picture as this place is quite far off the rail lines.
The only way this property can redeem itself is that it has to rise until 100K in 5 years which might be able to offset his negative cash flow of RM1100x60 months(5 years) = RM66,000. If, it only rises by 50K then the colleague would have not made a good investment.
I also did a cross check at property listing sites and can confirm the rental is only RM 700 - RM 900 per month only. Personally I feel the rental returns is quite bad, however only time will tell as this place is seriously lacking a catalyst.
I also did a cross check at property listing sites and can confirm the rental is only RM 700 - RM 900 per month only. Personally I feel the rental returns is quite bad, however only time will tell as this place is seriously lacking a catalyst.
