From Peter, a viewer who wrote in by email
Peter is 35, married and lives and works in Johor Bahru; his wife earns Singapore dollars. He has no loans and some shares but little cash, after past financial setbacks that are now settled. With a budget of up to RM1.1 million for his first property, he is weighing a unit near the RTS Link at about RM700 per sq ft, partitioned into seven rooms and earning about RM5,500 gross, against a resale unit in a Mont Kiara condo at about RM920 per sq ft, and two projects offered through a bulk-purchase club.
Which should he buy, and how should a unit in a prime area be priced to rent well without undercutting himself?
“entry price is the most important”
Be wary of Johor's current hype and of any unit that only works partitioned into rooms. Sean would buy a completed unit with proven rents first, compare its yield and upfront cash with the Mont Kiara unit, and buy an under-construction one only once the first is rented.
Why
Johor buyers are paying a premium
Over the past two years almost no resale transactions in Johor exceeded about RM800 per sq ft, yet new launches near the RTS sell at about RM1,300. Buying at the top of the last boom left owners bleeding for eight to twelve years.
One rental strategy is a risk
Kuala Lumpur banned splitting units into more rooms, and Penang restricted Airbnb; if Johor did the same, a seven-room co-living unit would lose its rent. Sean prefers units that can rent long-term, short-term or by room.
Completed units build a portfolio faster
A completed unit can be rented within months; six months of rent with a stamped tenancy and SPA counts as income for the next loan. A new launch ties up that loan slot for three or four years.
Furnishing wins top rents
Sean gets above-average rent in Mont Kiara by furnishing fully, spreading the cost over many tenancies rather than expecting one lease to repay it.
What to do
- Check the area's median transacted price per sq ft before paying a launch premium.
- Prefer a completed unit with existing rental data for your first purchase.
- Compare yield, upfront cash and growth potential side by side for each option.
- Invest where you can manage the unit, or budget for a property manager.
- Keep four to six months of rent in reserve for each property.
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 #262 | NAVIGATING THE HOT MALAYSIA PROPERTY MARKET
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #262. The quoted line is verbatim; everything else is paraphrased. Figures are as stated in September 2024. Sean is a client of FAR Capital, not its owner, and appears in its Battle Royale research series; he says he is part of the team at The Makeover Guys, a renovation company, and his units are managed by its arm Cozy Homes. He also endorses financing at a higher SPA price than the asking price, which is left out here.
