tips for first time home buyer malaysia

First Time Buying A Home? Here Are Some Important Tips to Consider

By: Guyub
2nd Feb 2022
Buy & Sell

Buying a new home can be a daunting affair; whether as an investment or a forever home – since it is quite a large investment after all. However, as long as you have the right information at your fingertips, you can avoid making the wrong decision when buying your first property. Here are some important things to take into account before signing your name on paper.

Investment vs A Home

The first decision you need to make before looking for a property is to decide whether you plan to purchase it as an investment, or as your very first home. This is quite a major decision as looking for a home to live in compared to an investment has quite a number of differences.

For one, if you’re looking for a home to live in, you might want to consider personal conveniences such as distance from the workplace or the school, important amenities such as parks and stores, the security of the property, or maybe how family friendly the community is. Basically, your lifestyle will affect your decision on your choice of home.

However, if you plan to purchase your first property for investment purposes, then you might be looking for a higher ROI. Of course deciding on which property to buy for your investment will also depend on whether you are planning to rent out the property, or selling it later for a better price; which brings us to the next topic..

Investment: Renting vs Selling

If you do plan to buy a property for investment purposes, then choosing the type of property will depend on whether you plan to rent the said property out to tenants, or sell it later when its value appreciates. The general rule of thumb states that high-rise developments are better investments for rental yield, while landed properties go for better ROI if you plan to sell it at a later date.

If you plan to rent out..

If you are investing in a property to gain rental yield, then you will need to put these few things in mind.

  1. Find the right location
    This is the most important thing to look out for when it comes to buying an investment property. With the right property location, you have a better chance for a higher profit. Look out for locations that have decent nearby amenities like schools, parks, malls, supermarkets and maybe offices or a growing job market; this will increase the chances of renting out your unit at a decent price.

  2. Know your responsibilities as a landlord
    As a landlord, it is not just about collecting rent every month. There are certain responsibilities, which includes things such as repairing the roof, unclogging the drainage, and fixing/replacing any damaged furniture and fittings. So, what does this have to do with deciding which property to buy? Well, sasy for example you buy a unit in a high rise apartment which is located on the highest floor. Should there be any leakages, you will need to liaise with the management to get it fixed. Or maybe you want to buy a landed property and rent it out. If the garden gets overgrown, you might have to step in to get it cleared or you might get fined by the local city council.

  3. Decide on the type of tenants you want
    Are you looking for working class tenants? Or do you think you want to rent to outstation students? The type of tenant you want will also play a part in which area you decide to buy your property.

If you plan to sell it off later..

Buying and selling a property is more than just an exchange of hands with some profits to be made. First of all, you need to make sure you have done enough research on your choice of property investment. Here are some questions you will need to ask before narrowing down your options:

  1. Do you want to invest in a residential or commercial property?
    Both types of properties have different pros and cons, but generally, commercial properties usually have higher return on investment compared to residential properties, whether renting or reselling the property. However, residential properties have a larger pool of potential buyers and are considered a safer investment.

  2. Who is the developer, and are they reliable?
    There are many property developers in Malaysia; some are conglomerates, while some are small-scale home builders. The reliability is not dependent on the size, but more on reputation. There are also some developers that are proficient in certain property types, whether commercial, hospitals, landed, or luxury high rise, so if they do decide to build something out of their usual forte, then you might want to pay more attention to the fine details.

  3. What are the future development plans for the surrounding areas?
    The development of the surrounding areas will have an impact on the property you’re investing in. For example, if there is a hospital, school, or shopping mall nearby, then the entire development area has the potential to thrive, hence increasing the value of the property at the same time.

  4. Can you afford to wait for a few years before selling it off? Will your funds hold?
    Investing in a property means you will need to be able to pay for the loan and still have enough for your current living expenses. You will need to ensure you always have the extra funds since investing in a property is a long term investment that will also depend on the market price when you decide to sell it.

Buying A Home Sweet Home

If you’re planning to buy a property as your very first home, start by making a list of your expectations, priorities and deal breakers. Here are some examples of things you might want to consider when making that list:

  1. The security
    Since you will be living in the neighbourhood, you will want to ensure that you and your family will be able to sleep well at night, or the kids are able to play freely without having to worry about the security of the area. So instead of just choosing a neighbourhood you like to live in, do consider the type of security offered i.e.: gated community, barrier gate with security guards, perimeter fencing, police stations nearby.

  2. The neighbourhood
    What kind of neighbours do you want? Families? Single working crowd? Multigenerational families? Some properties are targeted at certain demographics as it offers facilities or a home design that sits well with some type of people. So, if you plan to live with your parents, then maybe you might want to think about a neighbourhood that has more multigenerational families so that they will be able to integrate with the community.

  3. The amenities
    Not everyone wants to live near the shopping mall, just like how living near the LRT station is not a priority for some. Hence, it is important for you to make a list of what is important to you so that you don’t lose sight of your priorities and regret buying the wrong home later.

  4. The type of home
    Are you looking for a high rise condo or a landed home with garden space? Or do you prefer staying in a townhouse instead? Your lifestyle does have an effect on what type of home you might prefer; for instance, a gym buff would appreciate the facilities at the condo, while someone with young children might like to have more porch space for them to play. Or if you travel a lot for work, you might feel more secure leaving your spouse alone in a highly secured condo than in a large house.

Plan Your Budget

After you have gathered your list of priorities and options, then it is time to plan your budget. Buying a house is more than just calculating the price, the monthly loan repayment and interest. So, before looking for a property of choice, you will need to put together a list of your financial status including all your current expenses, loans, and financial obligations. You might even need to make lifestyle changes in order to comfortably afford your mortgage on top of other expenses.

In order to accurately calculate your home buying budget, feel free to use GUYUB’s home calculator to ensure that you can truly afford that home of your dreams without suffering financial hardship due to bad budgeting.

Narrow Down Your Options

Now that you’ve set aside a budget, the best part of home buying is here! Window shopping! Taking into account the list of things we have discussed so far, it is time to look for a property or home of your choice. Keep these things in mind:

  1. Location
    The best properties are always at the best locations. However, don’t let the crowd influence you to buy something that isn’t exactly what you want or can afford.

  2. Visit in person
    Sometimes, you need to trust your gut feeling. So, always try to visit the unit in question. If it is still being built, go check out the showroom.

  3. Don’t rush!
    You may think, ‘this is it!’. However, do go back, think about it, look through your requirements again before deciding on your long term investment.

Find A Reliable Agent

Last but not least, make sure you find a reliable agent. They can give you good information on the property or property market stemming from their personal experience, and help in negotiation between seller and buyer. You can read more on how to whet your agents here.

The statement and information in the articles are the opinion of the writer and meant only as a guide. Any property purchase, rental or lease involve many legal issues and other complication depending on the individual facts and circumstances. Readers and Users are strongly advised to seek professional advise including from qualified and competent lawyers, bankers and/or real estate agent to verify the information and the statement before embarking on any purchase, rent or lease of any property. To the fullest extent permitted by law, we exclude and disclaim liability for any losses and damages of whatever nature and howsoever cause and arising including without limitation, any direct, indirect, general, special, punitive, incidental or consequential.

Browse other guides