The key is to figure out your priorities first before deciding what and where to buy. Also, check out our guide on which property type will best fit you.
With property prices climbing faster than our salaries, it is no wonder why finding the right property to live in can be a Herculean task for us Malaysian millennials. Many are uncertain over two things:
1) Which areas should I be looking at?
2) What kind of residential property should I consider?
Of opportunity costs & trade-offs
Obviously, the decision ultimately depends on your budget, followed by your specific wants and needs. Most adults know that one has to dissect the pros and cons before making a decision, but very few actually follow through in making the most economical choice.
This is because the most economical choice is not always easy or conventional. You will have to get out of your comfort zone and sometimes explore the path less travelled by. Are you willing to sacrifice a luxury or a want in order to achieve a personal goal ?
Since our we cannot satisfy all of our unlimited wants, we have to make choices. The comforts we forgo or sacrifice is necessary for our long-term prosperity. When you choose or settle for a smart alternative over another ‘utopian’ one, you are doing so for the value it provides – maximum returns at minimum cost. This is otherwise known as opportunity cost.
Watch the video below to gain a better understanding.
In November 2017, I shared my story on why I decided against purchasing a car and rely on ride-sharing services such as *UBER & Grab instead, as this avenue minimises my living costs. My calculations showed that a basic car will cost me RM855 per month – Myvi’s loan instalment (RM574); Petrol (RM81) & Parking (RM200). Comparatively, taking a GRAB or UBER to and fro work only costs me roughly RM400 monthly (RM20 daily).
It has its downfalls – think surge pricing having to use public transportation instead during peak hours. But at the end of the day, these small trade-offs are worth it. My reasons are pretty elementary; I seek financial stability, hence I require maximum savings for:
1) Investment purposes – mutual funds, small-cap funds, etc
2) Downpayment on my first property
*This was prior to UBER ceasing its operations in Malaysia. The author now utilises MyCar instead.
I am a Bangsarian & I’m not breaking the bank
And I have continued to practise this ‘trade-off’ mentality when it comes to my accommodation choices. Late last year, I had a major decision to make – I required a new rental unit as my existing lease was ending in December 2017. Living near the city centre is a must for me as I work at Mid Valley and I can’t deal with a long commute as it drains my energy and wastes valuable time, besides discouraging me from maintaining a regular workout schedule.
By making a short commute my priority, it has enabled me to be to a more productive employee and increase my earning power over the past few years.
Obviously, rent isn’t cheap in the city centre but since a long commute (and high transportation cost) is a no-no for me, I was ready to trade-off on a few luxuries to achieve my lodging goal. And achieve I did – I secured a room in an old apartment building just 400m away from the Bangsar LRT and 5 minutes away from my office!
Here are the trade-offs:
1) This condo is over 35 years old and is just basically a tower within a compound which resembles a pound lot.
2) There are no facilities or any lifestyle component whatsoever.
3) The area is slightly ‘dodgy’ as the neighbouring condo is an undermaintained, low-cost flat.
Comparatively, my old apartment in Titiwangsa had a pool, gymnasium and a much more conducive vibe. Nevertheless, my current unit is well-maintained and security is really tight. Also, there are only 30 units within the tower, so I never have to wait long for the lift.
The best part is I’ve managed to cut down on my monthly expenses (for rent, utilities and commute to work) by RM200, as shown below:
|OLD PLACE (TITIWANGSA)||NEW PLACE (BANGSAR)|
|RENT + UTILITIES||RM950||RM950|
|TRANSPORT COST (Grab/MyCar fare)||RM400
(RM20 X 20 working days)
(RM10 X 20 working days)
|TOTAL COST||RM 1,350||RM 1,150|
So quite a few of my acquaintances have questioned my decision of opting to live in a ‘dump’. They may not get it as my priorities are different from theirs, but I am happy with my choice. The benefits I get in return far outweigh the luxuries sacrificed. I will take the extremely convenient commute which translates to more sleep and lower transport costs, any given day.
Also, the convenience of living in such a central location has made it possible for me to be more sociable since most of my dinners or hangout sessions are in Bangsar or somewhere nearby.
But, I digress!
Key takeaway: Know your priorities & what you are willing to sacrifice
As detailed above, my major life decisions are wholly dependent on my personal priorities, all of which supports my financial freedom aspiration. Fingers crossed, I will be updating you with news of my first property purchase in the next year or two:)
In that same vein, no two home buyer is the same. Everyone has different priorities and obligations. It is paramount for you to figure out yours. Only then, can you determine which choice or alternative will provide you with the highest returns and support your personal well-being at minimum cost.
Here are a few tips for those deliberating between a landed or high-rise home:
#1 Value for price
LANDED: Landed properties are usually much more expensive than their high-rise counterparts. Besides a larger space, their added edge includes having your own privacy and not having to share common areas with other residents. However, price tags greatly differ between locations. Should your priorities be additional space or a conducive environment for family living, then do consider alternative cities which offer more affordable homes.
With recent improvements in Klang Valley’s connectivity infrastructure, there are numerous options available for the savvy homebuyer.
Some developers have recently introduced attractive landed products, measuring at least 1,000 sq ft within the RM400,00 – RM700,00 range.
There a many good deals in the sub-sale market too. These homes might not be bright and shiny, but they make great starter homes and there is nothing a new coat of paint and some maintenance works won’t fix.
HIGH RISE: Besides its lower entry point, high-rise properties are highly popular mainly due to the variety of facilities provided such as a gym, pool and sauna. Also, most of the newer properties are part of an integrated development, offering convenience and lifestyle components to its residents. Value-added amenities include LRT/MRT/KTM stations, colleges and shopping malls. However, those planning to start a family will have to upgrade to bigger quarters down the road or be willing to spend big bucks for a bigger built-up.
#2 Maintenance costs
LANDED: The only maintenance cost incurred is security cost, especially for gated and guarded communities. This hinges on the density of the community, e.g. the lower the density the higher the cost per home. Other than that all maintenance expenses will be borne by homeowners.
HIGH RISE: Maintenance cost is usually higher since there are facilities and common areas to take into account. Fortunately, monthly maintenance cost is split among the many homeowners – most high-rise properties are densely populated, with at least 200 units in a development. Nevertheless, purchasers should research more about the property’s management team capability. Condominiums/apartments rely on good maintenance to keep the building in good condition. If the property management team is subpar and not diligent in collecting service charges and carrying out the necessary upkeep, the building could depreciate in value quickly.
#3 Safety & quality of life
LANDED: Gated and guarded (G&G) housing neighbourhoods are not without its supporters. Many see them as safe havens, especially families. These areas which are well designed with proper fencing and security guards who monitor the movement of visitors in and out of the community ensures that crime is kept at bay. Not all G&G developments are up to mark though.
So, be sure to carry out your own due diligence beforehand.
HIGH RISE: Safety issues are one of the main concerns for potential property purchasers. Most condominiums and apartment buildings are equipped with at least a 3-tier security system, including 24/7 CCTVs and mandating the usage of a residents-only access card. This assurance besides there being only one or at most, two entry/exit points scores brownie points with potential purchasers.
DISCLAIMER: The author is not promoting ride-sharing services explicitly. She is merely sharing her personal experience and how her financial decisions are shaped by her goals and aspirations. The views expressed are of her own and is meant as encouragement for other Malaysian millennials. It is not in any form an endorsement or recommendation by iProperty.com.my.