Neighborhood: The quality of the neighborhood in which you buy will influence both the types of tenants you attract and your rental rate. For example, if you buy in a property near with good security, higher property price in surrounding township, high quality of neighbourhood would be built such as Bangsar, Taman Desa etc . However, if you have limited budget for property investment, more focus on security aspect.
Property Taxes: Property taxes are a critical concern, as an investor planning to make profit from sale, you want to be aware of how much you will be losing in paying tax. High property taxes may reduce your profit seriously. Check out more on Real Property Gain Tax (RPGT) ,different charges imply on property for the sale within 5 years after SPA signing. There is several ways can avoid RPGT too. [check out more in our page]
Security & Crime: No one wants to live next door to a hot spot for criminal activity. Go to the police or the public library for accurate crime statistics for various neighborhoods, rather than asking the owner who is hoping to sell the property to you. You can filter some property with good management or security offers such as 2-tier or 3-tier security provided with physical guards station, access card scanning in lobby and lift, guard house filtering and boom gate. (Most of the condominium maintenance fees including security services)
Segmentation of Market: Locations with growing employment opportunities tend to attract more people – meaning more tenants. Existing or new development of mall, office buildings or shoplots will bring up the demand of working class tenants. Some of the working class tenants will prefer properties that are reachable by public transport. If you prefer with family-sized tenants, more accessibility or better environment is an extra advantage. If you're targeting for students market, a property within 5km or walking distance to famous university or college will be a good option for you.
Future Development: The municipal planning department will have information on all the new development that is coming or has been zoned into the area. If there are many new LRT or MRT stations, business parks or malls going up, it is probably a good growth area. These new development might help in boost up the area population and make it an hot-spot area. However, some additional new housing could also provide competition for your property. If the new housing is different category (eg. Rumah WIP/ higher or lower 200k in property price) with the property you intend to purchase, it shouldn't be a problem.
Rents: Rental income will be the bread-and-butter of your rental property, so you need to know what the average rent in the area is. If charging the average rent is not going to be enough to cover 80% of your mortgage installment payment, then you have to keep looking. Nowadays, property market hard to get 100% coverage rate for installment unless grabing an under-construction project will do as you buy in with current year price for future property. Check out more on rental return with Return On Investment (ROI) formula. (more information regards ROI from our page)
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