From Mr Core, a viewer who wrote in by email
Mr Core is 34 and owns a landed home and two 411 sq ft leasehold studios with commercial title in central Kuala Lumpur, bought in 2017 for about RM578,000 each to run as Airbnb. Each instalment is about RM3,500. The project completed in 2020, during COVID; one unit now rents long-term for about RM2,300, and the other, run by a management company on an 80:20 split, nets him about RM25,000 a year. Banks value each unit at RM600,000 to RM650,000, and there are auction listings in the project.
Is this a failed investment, should he sell one unit, and how does he still reach his goal of five income-generating properties?
“I would suggest to sell this and start working for the next deal”
Not a failed investment: he bought near the top of the cycle, was hit by COVID, and still held on with about a 10% gain. But Sean would sell both units, because thousands of new studios nearby will compete for tenants and he is paying about RM3,000 a month for nothing but a target number of units.
Why
A good project has several ways to rent
Sean only rates a project if long-term rent alone can cover the instalment, with medium-term, room-by-room or Airbnb as extra options. When a launch leads with Airbnb returns, it usually means long-term rent cannot cover the loan.
Airbnb can be taken away
Singapore bans it, Penang has banned it in residential-title projects, and a building's owners can vote it out at an AGM. Short-stay income also has to be shared with an operator, or it becomes a second job.
Rent sets the price
A buyer works out the instalment against the rent, which is why the valuation is stuck around RM600,000. About 10,000 to 12,000 new units of a similar size and price are coming nearby, and tenants prefer new, so rents and prices are more likely to fall than rise.
Aim for cash flow, not a unit count
Five properties is an arbitrary number. Set a monthly positive cash flow instead: first enough for rent to cover where you live, then the amount the lifestyle you want needs.
What to do
- Before buying, check that long-term rent alone covers the instalment.
- Keep cash to cover about six months of a fully furnished unit standing empty.
- Find out what you still owe the bank, what units actually sell for at auction and the asking prices, then set your exit price.
- Sell both studios and put the money into the next deal while you are young.
- Replace a target number of units with a monthly cash-flow target.
Editorial Note: Summarised from Sean Tan's full episode. The quoted answer is in his own words; the rest is our paraphrase. Figures reflect the recording date, so check current rates and rules before acting on them.
ASKING SEAN #287 | FAILED AIRBNB INVESTMENT
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #287. The quoted answer is verbatim; everything else is paraphrased. Figures are as stated in June 2025; the viewer's rent figures are taken from his email as read out, and some of Sean's spoken figures in the episode were unclear in the captions, so they are left out.
