Rent or buy in KL? (3 year contract)

Hi Mitch,

If you're looking for 3 year period both has some equal pros and cons.

For Rent:
You will get the deal on much lower price if you're going ahead with 3 year contract as owners would be happy for long term contract. The money you invest is not gonna return in either way.

For Buy:
You are entitled to own a home only within the limits of KL as you're an expat. Mont Kiara falls in the boundary line of KL. Whatever the money you're gonna invest will fetch you some additional returns while you sell after 3 years. You need to manage everything related to maintenance and lot of formalities are there for procuring a home.

Hope this helps.

Not a good idea to buy unless you are prepared to keep the property for 5 or more years. 30% tax on any profit and no secondary market as only 0.3% foreigners in KL and 90% flat share as low to mid income. Locals buy off plan.

The two other issues with buying are legal cost (there is basic cost but lots of add-ons). Secondly minimum purchase price is from Rm 1 million dependent on location. Even if a mortgage is obtainable without any credit record in Malaysia often a very large deposit is required from foreign borrowers. Possible to borrow in Oz but exchange rate will have an impact at liquidation.

There are other discussions on this issue recently. Major drawback is no increase in many property prices the last 3-5 yrs (due to oversupply) and significant depreciation with age of property due to lack of desirability. So knowing the local market and good timing are essential.

There are no limits where you can buy property just minimum purchase price which means foreign owner property is probably put of financial reach of 80% of Malaysians.

Buying the new property then sell it after the contract ended or do it for the investment porpose. I found a place which is in 'golden triangle' Kuala Lumpur, very nice view.
If renting, money just fly, no investment.
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@Shammyll

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Hi Mitch,
I bought a unit in KL Ampang area and I found that the rental return is really low and can not cover for the mortgage interest and I've been trying to sell it for a couple of years without success so I think it is not worth buying unless you can purchase landed property at good location because the subsale market in KL are for locals which prefer the landed property rather than paying 1 mill for condo.
To rent will save you a lot more money than to buy as the rental price nowadays are very very cheap as compare to the interest rates and also renting will give you the flexibility to move out if you don't like the property or your neighbor rather than stuck with it and have to keep paying the installments.
Financing wise was very easy, as long as you have a fultime job and can submit income proof then the bank will be eager to lend to you, for foreigners the limit is 80% of purchase value.
Take note that if you purchase offplan, usually the price is way over the market price but the developer usually will provide cash back as much as 20% to offset the downpayment so basically you do not need to come out with the 20% DP so cashflow wise is very attractive.

buying not a good option in view of limited opportunities to sell. have personally known foreigners who have not been able to sell their property for years.

I agree with all the posts and thats the sad part. Years ago, NONE of the posts would be accurate as things were easy, and appreciation and ease of re-sale were basically guaranteed. But various kinds of greed set in and the result is a very difficult situation for which there is no clear answer anymore. In 1999-2000, you could literally clap your hands and get 10-12% ROI, now its more likely to be a negative number--with a lot of difficulty just getting to that!

Upshot is that renting IS the preferred option unless there is a very clear, hard reason for doing otherwise. "Rent with Option to Buy" would be my take on things if it were possible, and also if a person was planning on MM2H thats also a consideration for buying. In that case, money, time and returns arent the issues. For at least the past 10 years ive moved along with a plan to build a house here but right now this minute its looking like not so good an idea. Money, sorry to say, may be better spent pretty far away from here.

There is another thing too. Many expats dont mind, but i do, that most properties dont come with a title in your hand. Im only interested in the highest form of ownership, a piece of dirt below your feet that I 100% own, with no claimants on the property, no community association rules that prevent or limit freedoms, or that your dirt can only be owned in common with the rest of the development. There is a term for this, its about six words which I cant think of at this late hour, and its hard to come by that higher form of ownership. Yet a lawyer told me, do not buy unless you have it, dont listen to agents and developers who steer you into something lesser. And if I cant have it, thats ok, its a big world.

Its not an expats fault but I do find myself repeating the same theme all the time--YES, "the way things USED to be" is how newcomers believe the place is and it is not.

PS. I had that done to me too, the inlaws coming from some place and the landlord needed the dwelling back ASAP. Out you go! I smell it coming again very soon. I smell it and im already packing.

Mitch C wrote:

Hi All.

Coming from Australia I have owned my own properties that I live in for some time. I tried renting once and hated it. Was an ideal tenant, but the owner had family moving over from China so they wanted their premises back and our lease was terminated. Also, we can’t do small things like hang out nice pictures on walls etc.

This led me to think that purchasing would be a good option when moving to KL. Housing affordability in KL compared to Sydney is far more affordable and you get a lot more for your dollar. I’m confident we would have enough of a deposit to purchase without a problem.

My question is, is it worth it? We would like to have a nice condominium in the Mont Kiara area likely Seni. Is renting really the better option?

Cheers, Mitch

If you were to sell your property within 5 years, you will be subjected to capital gains tax - higher percentage the faster you sell it within that 5 years.

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@Jsamarudin

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