Being located in a strategic place alongside the world’s busiest shipping lane, Malaysia’s property market is most-liked by property investors. It is undoubtedly one of Asia’s best places to invest, with well research, it can be rewarding and easily executed.
Before stepping onto the field of real estate, first and foremost, you need to know the types of investment you can have in options. Each type of property investment has its own benefits and risks, and it needs to complement your purpose. So, it is best to know them well prior to deciding your real estate investments.
A property that serves residential structures and equipment owned by landlords and rented to tenants. Amongst these properties are terrace houses, apartments, and condominiums.
However, there is only one special case in this rule, a commercial land title property is considered residential titled when protected by the Housing Development Act (HDA). It is a very popular form of investment in Malaysia.
In most cases, if you own a residential property, you will be accountable for paying all the bills – maintenance fee, sinking fee, assessment fee, sewerage fee, etc.
Office buildings, small office versatile office (SOVO), small office flexible office (SOFO), small office lease office (SOLO), small office smart office (SOSO), shop lots, and retail are commercial titled properties. As per the name, it serves the purpose of business, and usually, is for rent to offices and small business owners.
Investing in the properties located in malls and other retail centers are retail titled properties. In other words, they are similar to commercial investment properties, but both properties have different features.
Doing investments in industrial warehouses belong to the category of industrial property investment. However, this involves long-term agreements, and a bigger capital.
If you do not want to deal with the property yourself, there is an option of Real Estate Investment Trusts or REITs. Whereby, you purchase shares of a corporation that owns real estate properties and the corporation declares profits as dividends, it is REITs.
Now that we have classified the types of property in Malaysia, let’s look at the step by step procedure in buying a property in Malaysia.
Determining the budget is very important when you decide to buy a house. It will be pointless if you start searching without understanding your own pocket. If you are a foreigner, you need to keep in mind that a 10-year visa program called Malaysia My Second Home (MM2H) permits foreigners to purchase homes at a lower price in certain states.
The minimum property buying price for buyers are based on three main factors:
Besides, there is a a minimum property purchase value of RM1 million in order to buy a house in Malaysia for foreigners.
Secondly, it is important to find a suitable home loan, and then, a mortgage package that fulfills your requirements. Head to the bank with your application and other mandatory paperwork.
*It is advisable for the foreign buyers to apply loans from foreign banks. Keeping the Margin of Finance (MOF) in mind. Ignore this for foreigners who married a local.
It is necessary to have a qualified property lawyer to help in the transaction while you are buying a house in Malaysia. From drawing up the contracts to checking due diligence, the lawyer will help you in every step. Additionally, they will ask for some of your documents related to the purchase, and the rest will be their responsibility.
Your purchase will be agreed with the developer. Afterwards, you need to sign the Sales and Purchase Agreement (SPA) with the seller, the deed of the mutual covenant (if applicable) and other transactional documents. Then, the Stamp Office will verify the price. Lastly, the lawyer will be your support thoroughly while fulfilling the required necessities.
At last, you will get some months to make the full payment from the date of the signing. Change of ownership will be completed at the Land Office Registry. The developer then will provide the certificate of completion according to the terms and conditions.
In conclusion, this is the basic process you have to follow when you want to invest in a property in Malaysia. Foreign investments are cordially invited here to continue their progress and build strong international relations as well.
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