From J, a viewer who wrote in by email
J is 27 and already owns two residential properties. He booked a 750 sq ft SOHO duplex in Damansara for RM210,000, expecting an 85% loan because he thought it was a commercial unit, with rent of RM1,200 to RM1,400 against an instalment of about RM900. The bank treated the SOHO as a home, so as his third residential loan it was capped at 70%, and he gave up the booking and lost a RM500 fee.
How should he book a subsale unit without risking the booking fee, how does Sean buy a third property and beyond, and is property even worth it when 30% upfront cash makes the returns worse than EPF?
“I think you're being a little bit too harsh on yourself.”
Don't give up over a misunderstanding of the title: anything called SOHO is financed as a home, so a third one gets 70%. Beyond two properties, Sean buys through developer deals that need little cash, finances them on credit and keeps his own capital for stocks and other assets.
Why
'Home' in the name means a home loan
SOHO stands for small office home office, and banks treat anything with 'home' in its type as residential, so a third residential loan is capped at 70%. SOFO, SOVO and office suites are commercial titles, which can get up to 85%.
Subsale and auction need the most cash
A subsale needs about 18% of the price upfront: a 3% earnest deposit, 7% at the SPA and the fees. At auction you put down 10% by bank draft and lose it if the loan isn't secured within 90 days, so Sean doesn't advise auctions for first-timers. Only deals struck directly with developers can avoid large deposits.
Use credit for property, cash for the rest
Bought in cash, property nets about 6%, no better than EPF, as J says. Financed, with rent covering the instalment, tenants build the equity. Sean's Mont Kiara unit, bought at a 20% discount, now rents for RM6,000 against an instalment of about RM4,200, and at a 6% gross yield is worth about RM1.2 million against roughly RM900,000 paid.
Declared rent works for you
Agent fees, repairs and even loan interest can be deducted from declared rental income, and banks count that income when you apply for the next loan.
What to do
- Check whether a unit has a residential or commercial title before booking; anything labelled SOHO counts as a home.
- Count your residential loans: from the third, the margin drops to 70%.
- Budget about 18% of the price in cash for a subsale, and avoid auctions until you are experienced.
- Buy only where the rent covers the instalment, and keep your spare cash for other investments.
- Declare your rental income and claim the costs, since banks count it for your next loan.
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 #312 | GIVING UP ON PROPERTY INVESTMENT
Sources & Verification Data
Summarised from Sean's full English captions for Asking Sean #312. The quoted answer is verbatim; everything else is paraphrased. Figures are as stated in May 2026. Sean is a client of the bulk-purchase group FAR Capital, not its owner.
