Why Should You Invest in Malaysia Properties

There are many reasons pertaining to why Malaysia has the ability to offer a great investment climate for property purchasers, both foreigners and locals alike. With favourable economic, political and cultural environment, Malaysia offers much promise in low risk, high-return long-term investment value.

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  1. Pro-Business

As the laws in Malaysia are in favour of business and investment, foreigners are very much welcomed to start business and buying properties in their own name, in which might be impossible in most South East Asian countries. With successful pro-business policies, investors are supported by tax incentives and a well-developed financial sector.

  1. Malaysia My Second Home

As mentioned above, you can buy almost any kind of property freehold, therefore owners will have the right of permanent use of the land, compared to China’s 50 to 70 years ownership. Initiated, organised and launched by the Malaysian Government, you are entitled to the MM2H residency visa once you purchase a property at a minimum price above RM 1,000,000. There are also substantial incentives being offered under this programme such as the removal of capital gains tax on properties owned for more than 5 years.

  1. High Rental Yields

High rental returns can be obtained, with some up to 10% and more.

  1. Economic Resilience

Malaysia has huge potential in becoming an entrepreneurial, innovation-driven and knowledge-based economy country, owing to its strategic location, good infrastructure, skilled labour, political stability and relatively low cost structure. This also leads Malaysia to being a competitive investment climate.

  1. Financing

Investors have several financing options to choose from, from traditional mortgage solutions offered by local and western banks to the Islamic banks mortgage solutions.

To Buy or To Rent

There will come a time in your adult life when you will have to make one of your biggest financial decisions. That is, to buy a home or to rent one. There are many variables to consider when it comes to choosing between buying a home and renting one. Be it owning a home or renting a place, each has its own advantages as well as disadvantages associated with them. While having a permanent roof over your head is definitely a good idea, mortgage financing has since become difficult especially with today’s home prices. On the other hand, renting a home allows you the freedom to uproot easily should the neighbourhood is not as desired.

We have put together some factors for you to consider for both buying and renting options, breaking down the pros and cons for each option.

Top 5 considerations for buying 1st property

Rent

  • PROS
  1. Low Level of Commitment

Renting gives you the flexibility of changing your living space and environment every now and then. You can move any time, before or after your lease expires, with the former option requiring the forfeit of your deposit.

  1. Low Maintenance

Renting a home is certainly a cheaper choice, more so if you are sharing the rental with other people. Besides, property taxes and maintenance fees will be the least of your worries as it is your landlord’s responsibility, not yours.

  1. Lower cost upfront

Tenants usually pay a security deposit of two to three months’ gross rental and another half a month of rent as utility deposit. Rent is usually paid one month in advance.

 

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  • CONS
  1. Limited Décor Flexibility

Landlords usually limit the extent to which cosmetic alterations can be done to your rental home. Landlords generally try to refrain from doing extra work into making the rental home rentable again as most turnover rate of new tenants is high.

  1. No Equity

Your rental home only provides you with a place to live hence you do not get to build equity. Your monthly rent payments are not an equitable long-term investment and thus will not provide you with an asset to sell when you are ready to move.

  1. Instability

Rental home is for you to stay on a temporary basis only and the landlord has the capacity to remove you with a 30-day notice, should he intend to sell or take back the house.

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Buy

  • PROS
  1. Pride of Ownership

Perceived as the number one reason why everyone aspires to own a home, home ownership provides you and your family a sense of stability and security. It is an achievement after all. Additionally, as opposed to rental homes, you are allowed to do anything you deem fit to your home.

  1. Potential Appreciation

Although largely unpredictable, real estate has consistently appreciated over the years. Therefore owning a home is like making an investment in your future.

  1. Gain Privacy

You are the owner of your home, so no owners will come knocking on your door to check on you and the house. Thus you have nothing to worry about with your newfound independence in your own property.

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  • CONS
  1. Hefty Down Payment

One of the first steps to owning a home is to pay a substantial amount of down payment, which is at least 10% in cash.

  1. Less Mobility

As a homeowner, you will most probably need to sell your current home first before being able to buy a new one, which subsequently results in a longer delay in moving homes or environment.

  1. High Maintenance

You will be responsible for all the upkeep of your home, in which maintenance works might include inexpensive repairs to costly repairs.

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Malaysia ranked 19th in the world’s most investor-friendly

Jun 17, 2014

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Malaysia has moved up five spots in a survey from The Economist Intelligence Unit that identifies the most business-friendly cities and countries around the world.

Kuala Lumpur is now ranked 19th in the Business Environment Rankings report – up from 24th place in the previous report.

Singapore remained top for the second consecutive report, followed by Switzerland and Hong Kong in second and third place respectively. Thailand’s ranking also increased – from 38th to 34th place.

Asia is a diverse region, the report noted, and there are large differences between the overall scores and global rankings of its top four countries (Singapore, Hong Kong, Australia and New Zealand) and its poorest performers (Bangladesh and Pakistan, in 69th and 74th place respectively, out of the 82 countries ranked).

The gap reflects the widely varying levels of economic development and political stability between these countries, alongside sharp differences in the underlying structure shaping laws and regulations of foreign investment.

Asia’s best performers have several factors in common: a favourable policy environment – particularly for finance and foreign investment – with competition policies that encompass international best practice. Despite tensions in some countries over immigration from poorer neighbours, migration of skilled labour within Asia will remain relatively unimpeded and overall labour market conditions will continue to compare extremely favourably to other regions, with companies able to expand or reduce their workforce with ease, as well as benefitting from freedom to set wages and hire foreign nationals.

Infrastructure remains a relative weak point for Asia, with only Singapore ranking among the world’s top 10 in this category (compared with other areas of the business environment, faring relatively poorly, in 7th place). Australia, Japan and New Zealand trail in joint 14th place, with Hong Kong coming in at 18th.

While some of the region’s infrastructure is excellent, particularly in telecoms and air transport, other areas require investment to improve distribution networks and utilities provision, as well as lower office rents.

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It is designed to reflect the main criteria used by companies to formulate their global business strategies, and is based not only on historical conditions but also on expectations about conditions prevailing over the next five years.

 

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

 

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