THREE things property  agents DON’T tell you THREE things property  agents DON’T tell you
Share this on WhatsApp  BY Kent Tan As property investment gains popularity in Malaysia, more and more people and hopping onto the bandwagon, hoping... THREE things property  agents DON’T tell you

 

BY Kent Tan

As property investment gains popularity in Malaysia, more and more people and hopping onto the bandwagon, hoping to reap some returns either through rental or the future resale of the property, or both. However, despite its popularity, many are unaware of some underlying rules of the game.

Though some basic knowledge, such as strategic location, freehold or leasehold and expected returns, are handy, a serious player will arm himself/herself with more than the elementary.

To minimise setbacks, it’s best to dig beyond what the salesman or agent is typically obliged to tell you. The next time you consider a property investment option, add the following into your must-know list.

  1. Residential use but commercial rates

This is the most typical mistake for beginners. Many are aware of the two most common types of land – residential and commercial. However, most are unaware that they carry different tariffs on electricity and water.

Such utility rates used to be quite straightforward, as houses and shops were normally built on residential land and commercial land respectively. These days, the evolution of modern living demands have brought about an increase in concepts such as integrated developments and serviced apartments, which are commonly built on commercial land.

Although such developments are likely to be charged residential rates for electricity, the water bill remains under the commercial category, which requires unit owners to pay a minimum monthly bill of RM36.

The upsurge of such developments comes with a flourish of fancy names that gives no indication of its property type, so it pays to confirm its status before you end up with a RM36 bill every month even when not a drop is used.

  1. Great show

Show units may give potential buyers a clearer picture of what the dwelling will look like before the project is complete, but its main purpose is to dazzle buyers. To this end, some developers might go beyond acceptable code of ethics to rope in sales.

Certain furniture in the show units may be custom made to make rooms appear roomier. For example, some smaller bedrooms will have smaller beds and wardrobes, a factor that may not be evident until you shift in with your regular-sized ones.

Always ask if what you see is what you get as most show units are installed with impressive fittings and finishing which are not part of the package. If the elegant plaster ceilings, staircase railings, doors, windows and kitchen cabinets are merely “ideas on how to renovate your units”, be prepared to cough up a hefty sum to achieve a similar feel.

For developments which promise furnished or semi-furnished units and allocated parking bays, make sure every item is delineated in the sale and purchase agreement.

  1. Better safe than sorry

Just like any endeavour with risks, it pays to be prepared with an exit strategy, especially if your intention is to profit from resale.

It is common practice to ensure you have the financial strength to hold the property long term. However, to avoid being stranded under unforeseen circumstances, one safety measure you can employ is to secure the choice to unlock the value of the property before the desired time.

To do this, you can either negotiate for a shorter lock-in period for your loan agreement, or be prepared with enough resources to maintain the property during its lock-in period.

More importantly, before you jump in, look out for factors that could augment the value and demand of your property more rapidly. Generally, these could include location, accessibility, facilities, amenities, population growth, property type, brand and prices, getting security features or proximity to public transportation such as the MRT.

Additionally, be wary of huge short terms gain. Now and again, some properties, especially those sold before completion, involves bulk buying or impulsive buying that pushes prices higher within a short period of time. This is not reflective of true value. Sustainable growth should be organic and not based on speculation.

Property 360 Online

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