Malaysia Property Investment: Six Important Strategies
by Speedprop on June 4, 2018
Property investment is a vast industry with a whole new series of opportunities. The question is, how and where could one start investing? What type of property investment is right for you? That being said, getting to know its basics is important before you decide what strategy to adopt, and which properties to invest in. Only after having learnt its basics, you can then begin exploring other investment strategies. And lastly, pick that one that caters towards your long-term goals, time and of course, budget.
- Buy and hold strategy
A buy-and-hold strategy, in short, is a passive investment strategy whereby an investor buys properties and holds them for a specified period of time. If you’re looking for a passive, long-term high-performance Malaysia property investment, a buy-and-hold strategy is a way to go. Buying a property for all sort of purposes requires research, so is investing in a property through a buy-and-hold strategy. Further research on the market, its neighbourhood, as well as its property expenditures, is needed before the decision to invest is made.
With buy-and-hold property investment, it’s therefore crucial for any investors to pay very close attention to its positive cash-flow, or you risk losing a lot of money afterwards. Also, ask yourself these important questions before deciding on becoming a landlord. Would you be capable of managing the property yourself? Are you totally fine with having tenants?
Also, bear in mind that not all buy-and-hold property investments work in the same way. For example, there are single-family homes or apartment buildings to consider. A decision whether to rent out an entire single-family home or maybe just individual rooms to prospective tenants depends heavily on two key elements, first, location and second, cash flow.
If you’re keen on having a personal residence at the same property you’re investing in, then multi-family home is a way to go. Multi-family homes are a popular choice for a good reason. If done correctly, you can spend less and gain more with multi-family homes. Lastly, apartment buildings. They can be categorised into large and small buildings. Either way, if you had invested in an apartment building, you’ll become a member of the homeowners’ association (HOA).
2) Airbnb Investment Properties
Airbnb investment property refers to buying properties for the purpose of turning them into vacation or short-term rental properties. There are however a few crucial points to consider. Are you capable of managing turnover between tenants? What about occupancy rates in that area? Are you familiar with legal related matters with regard to Airbnb investment property? Notwithstanding, over the years, many property investors have finally begun to see how lucrative Airbnb property investment can actually become if they are done correctly. This is because Airbnb investment, more often than not, gives higher returns than traditional investments.
3) The fix and flip investment
The fix and flip investment is a short-term type of property investment. Investors who are keen on investing in a fix-and-flip property usually had these three simple goals in mind, a) Buy properties, b) Renovate them and c) Get them sold at a much higher price. Fix and flip investment is not to be mistaken for a get-rich-quick scheme.
However, if such investments are done correctly, investors are able to make a quick profit from it. Just like buying a personal residential property per se, it’s also crucial for investors to consult a team of real-estate experts before deciding on which properties to invest in. Time is fix-and-flip investment’s biggest risk here. The longer you take to flip the property, the more money you’d need to spend for its monthly cost of maintenance.
4) Commercial Properties
Malaysia has a huge property investment market. When it comes to Malaysia property investment, Klang Valley is a good case in point. Investing in a commercial real estate or two in Malaysia is but a good investment choice to make.
Commercial properties can also mean little stores or shopping malls that are leased to businesses. This strategy, however, is not for beginners. Whilst they are opportunities with the promise of significant cash flow around, don’t forget to consider the possibility that your commercial property is likely to stay vacant for a long period of time than residential properties.
5) Passive Property Investments
Like the name suggests passive property investing means you’re not getting your hands dirty whilst doing so. You give your money to someone else instead to make such investment happen. One way of doing this is by familiarising yourself with REIT investing in Malaysia. REIT is a sort of company which allows property investors to invest its shares in their platform.
What happens next is REIT, will make use of these shares to invest in properties, whose dividends later will be accordingly divided among its investors and shareholders. This sort of passive property investment is likely to produce higher returns with minimised risk.
Apart from REIT, another way doing this is you may try to lend your money to an experienced investor who’s looking forward to buying Malaysia undervalued property to flip. What about banks? Why wouldn’t these investors go to the bank? One may ask. Banks seldom approve loans for a vacant property.
6) Real Estate Wholesaling
Can one make money in real estate without having had to spend literally a single cent? Yes. You can. It’s called Real Estate Wholesaling. First off, you, as a wholesaler find a property seller whose property has yet to be listed on the market. Next, find a buyer who you think might be interested in buying that property.
Once the property is sold, you’ll get a share of the selling price. Real Estate Wholesaling investment nonetheless requires you to have a large network of potential sellers and buyers. Having lots of contacts is, therefore, crucial to be successful in this type of investment.
Real Estate Tips
- Research
Before making any decisions on which estate investment strategies to adopt, Before making any decisions on which estate investment strategies to adopt, understand what each strategy entails. Do an analysis. Research them. Ask someone who knows about them before deciding on which property to invest in. Being analytical can help you find good property investment near you.
- Join Real Estate Investment Clubs
Explore and join any nearby property investment clubs you could find in Malaysia. Get acquainted with like-minded property investors. Make use of such opportunity to learn as much as possible about investment strategies from them. Ask them for help if you needed one.
- Location or convenience?
Location. Yes, location is so important. Explore good property investments in Klang Valley for instance. Klang Valley is known to have many properties that offer the best rental yield in Malaysia. Find such properties that are likely to give you highest returns. Don’t just stay in your area for the sake of convenience. Get out. For example, you can find and start investing in an area where there is a college in it. You can next focus on making the houses far more suitable for students. It’s all about research, research and research. Property investment is a lucrative investment only if you’ve done your research right.
