From Winston, a viewer who wrote in by email
Winston, 34, works in Seremban; his girlfriend, 31, works in KL and does not want to give up her KL salary. They are not yet married, have RM400,000 in savings and earn about RM9,000 a month between them. After viewing more than 12 houses they have two options: a 30-year-old house in a convenient spot for RM338,000 at about RM1,500 a month, needing around RM200,000 for deposit, renovation and furniture; or a new house with zero down payment at about RM3,000 a month.
Should they spend most of their savings on the old house with the easy instalment, or take the new house with little cash upfront but double the monthly commitment?
“You clearly cannot afford the bigger house.”
Take the old house, and buy it in one name. On one income, a RM3,000 instalment is out of reach, and counting on a partner who has not committed to living in Seremban is the real risk.
Why
Do not borrow on income you cannot count on
Sean discourages unmarried couples from buying in joint names; some split up before construction even finishes. Split evenly, each earns about RM4,500. That carries RM1,500 a month easily, but RM3,000 only works if she stays in, and she is not yet sure she will.
Compare with the area median, not the new house
RM338,000 against RM700,000 is the wrong comparison. What matters is recent prices in the same taman: if similar houses sold for around RM400,000, RM338,000 is a good buy; at market price it is fine. Just never pay above market without a clear reason.
Renovation does not add its cost to the value
A RM338,000 house plus RM200,000 of renovation is not a RM538,000 house. Valuers look at approved built-up area, such as extended kitchens and bedrooms with approved plans, not at marble or premium finishes. Unapproved extensions can even stop a future buyer getting a loan.
An old house is as good as how it was lived in
A house lived in continuously is usually fine, because problems get fixed as they appear. One left empty for five to ten years needs far more work, as seals and pipes crack once used again. Older layouts, with a staircase in the middle, also feel tighter than new designs.
What to do
- Agree on the life plan first: where you will both live, and how the household will work after marriage.
- Buy in your own name, on your own income; your partner can contribute if she chooses.
- Check recent transacted prices in the same taman before making an offer.
- Bring a contractor to a second viewing, ask how long the house was empty, and get two or three quotations itemised space by space.
- Do the necessities first: structure, wiring, plumbing, roof and toilets. Leave the nice-to-haves until your finances allow.
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 #242 | OLD VERSUS NEW PROPERTY
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #242. The quoted answer is verbatim; everything else is paraphrased. Prices are as stated in February 2024.
