Property makes money in two ways: rent, which in Malaysia usually comes from condos and serviced apartments whose rent nears the instalment, and capital growth, which usually comes from landed homes bought early in a new township. Rarely does one property do both well.
What types of property investors are there, and which approach should a new buyer take?
“the higher the risk the higher the return”
Sean sees four types: cash-flow investors, high-leverage buyers of new launches, cash-rich owners storing wealth, and those who only analyse. None is right or wrong, but doing nothing is the worst. A conservative buyer can mix the first two: a condo whose rent nearly covers the loan, and a landed home for growth.
Why
Cash-flow investors build steadily
They buy older, cheaper high-rises of about RM200,000 to RM400,000 near schools, markets or colleges, where rent exceeds the instalment. Banks treat each such unit as an asset and keep lending, though capital growth is modest.
High-leverage buyers bet on recovery
They buy several new launches at once using discounts of up to 30% to 40% as cash back to cover instalments until the market recovers. It can pay well, or go badly wrong.
Wealth-storers don't need rent
Business owners with surplus cash buy landed property as a hedge against inflation and may not even rent it out.
Analysis without action costs years
Some attend every course and talk the market through but never buy. Sean saw 2018, with developers desperate and first-home schemes everywhere, as a good time for those with stable finances to act.
What to do
- Decide whether you are buying for rent, for growth, or for both.
- Before buying, check that local rent covers 80% to 90% of the instalment, depending on your risk appetite.
- Visit about 20 properties to understand the market.
- Take your time if your finances are still being sorted out.
- Match the strategy to your income's stability.
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.
4 TYPES OF PROPERTY INVESTORS
Sources & Verification Data
Summarised from Sean's full English captions for this December 2018 video. The quoted line is verbatim; everything else is paraphrased.
