Curiosity, Thoughts and Whatever...

1. Lawyers & Legal Fees

2. Stamp duty for land office

3. Insurance (Mortgage loan as well as house fire and etc)

So let's say if the house price is RM300k, you gonna folk out approximately RM 330k for the whole process to go through for the initial stage. After the house had been completed, there's another land title/strata title conversion which in lay man terms mean owning the land and the house itself. Technically when you buy a house the house land title has not yet been subdivided from the master title. So it still belong to the developer or the financial who borne the project cost.

Assuming your house is completed or in this example an apartment/condo. You need to pay maintenance cost as well as water, electricity and sewerage and etc. I have met with many opinions with regard to rental. Some pay RM300k for the house and on top of that as soon as getting the keys dump in another 20-30k to renovate the house. Their reasoning is they want to rent out at a higher price. But I have skepticism and without using a calculator I roughly figure its not a good business deal. Why do I say that

1. Let's say if you put in a modest RM20k renovation. How many months at the minimum do you need to keep the tenant ?

2. Maintenance initially are low since a fully furnish house have all things new. However, if the tenant are very irresponsible and you are unlucky things might breakdown frequently.

3. Every time a tenant moved out there will be a significant cost involve. This is like repainting the whole house, repairing broken tiles and etc.

4. Bear in mind that not all tenant are willing to pay more than RM1k for a long term contract. In fact in most cases renting a place for more than 1k are usually a stop gap measure till they can raise enough money to put down upfront deposit for a new house. I mean common sense tells me who in the right mind would want to rent when his monthly rental can pay for a new house ?

5. Besides all the above, there are the sinking fee, assessment rate, annual and reoccurring charges which we don't notice initially.

I have a lot more to share and write about but somehow I can't find the time to sit down and write it. When I do have the time I ended forgetting many of the stuff and point I would like to highlight. This email itself had already taken me a few days to complete. I hope after another month when all my project had been completed I can find the ryhthm and time to write regularly again.