From Sam, a viewer from Penang who wrote in by email
Sam is 27, an engineer earning RM5,000 a month, and lives with his parents in a walk-up public housing flat in Penang. His father's health has worsened and he now needs a wheelchair. Renting a home with a lift would cost RM1,000 to RM1,500 a month; buying would mean about RM400,000 or more on Penang Island, using up his loan eligibility. He had set himself Sean's goal of three properties.
Should he rent a place with a lift, or buy one and give up his goal of owning three properties?
“I think you should rent first”
Rent a place with a lift now, since his father cannot wait for a purchase to complete, and rent out the walk-up to offset it. Put property investment aside until he has an emergency fund, insurance and more income; the three properties are meant to come about one a decade, not now.
Why
Buying can't solve it quickly
A subsale takes five to six months and about 18% of the price in cash, around RM72,000 on RM400,000, plus RM20,000 to RM30,000 for renovation. A new launch takes three to four years. Renting works almost at once.
Three properties over 20 years
Sean's goal is one at about 28, one at 38 and one at 48, as income grows. Judging the future by today's salary undersells what a career can earn.
Investing needs three things first
Six months of expenses saved, covering the parents who depend on him; insurance for himself as the breadwinner; and a clear career path. Property is not a guaranteed win.
RM5,000 is not a low income
Sean says Sam earns about the average and should stop calling himself low-income. The better question is how to add RM500 or RM1,000 a month.
What to do
- Rent a unit with a lift for your father now.
- Rent out the walk-up flat to cover part of the new rent.
- Build six months of family expenses in savings and get insurance for yourself.
- Find ways to earn an extra RM500 to RM1,000 a month from your professional skills.
- Revisit buying once you have about RM100,000 set aside and a higher income.
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 #258 | SHOULD I GIVE UP IF I HAVE LOW INCOME?
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #258. The quoted line is verbatim; everything else is paraphrased. Figures are as stated in August 2024.
