Searching on property?
Which one to go for – New Property or Subsale?
In Malaysia, more than 70% first time home buyer always had a difficulty in choosing of New Property or Subsale on their first home. Towards the end, more than 80% of first time home buyer will go for New property with the key reasons of low down payment and NEW home rather than used.
SUBSALE OR SECOND HAND PROPERTY IS A GOLD MINE?
Owning a property basically is a dream to everyone and no matter you are first time homebuyer or investor, the end result is to make sure the property value appreciate as high as possible. Do you know that “the building itself will depreciate, but the value of the land under the house will continue to appreciate over time. In other words, the higher the value of the land in the total property price, the greater the room for future appreciation.”
In addition to “land”, the location of second-hand property had more advantageous than the new property. This is because the infrastructure is mature and completed, and the goldmine areas had been occupied in advance by the communities built in the early years, whereas new houses need time to obtain a good seats. “This is the key reason why second hand houses can always have a better appreciation compare to new property.
HOW TO SELECT A SUBSALE PROPERTY?
Always remember, LOCATION LOCATION LOCATION is the key priority of property investment. Without this, you can forget about all others fact. Whether it is a New or Old Property, location is the key to determining the value of the house.
The closer you are to the city center, the higher the value. Follow by, complete transportation network and infrastructure in the surrounding area, such as expressways, light rail (LRT), rapid transit (MRT), banks, shopping centers and access road, it can also be added points to the property.
Next, you can go around and conduct a survey for the purpose of the property whether owned stay or investment. For example Bandar Sunway area where is a complete facilities and few collogues around, this will be good if you plan for an investment.
Avoid this type of location: cemetery, waste disposal center, direct or facing (police station, fire station & hospital)
Make sure a complete checking on the land tittle either is Freehold or Leasehold. The property tittle can create a difference on property valuation.
If you are purchasing the leasehold property make sure pay 200% attention to the balance lease period if below 30 years. The bank will also consider whether to finance the property due to the buyer may require 35 years to repay the money and hard to sell in future.
In conclusion, will advice to search a leasehold property with remaining 7o years and above.
Many people make a mistake on the property valuation especially the first time homebuyer.
Let’s figure out these
- Selling Price: This is the price agreed by seller & buyer and will input in the sell & purchase agreement. (Great if this is the lowest price)
- Market Price: The average market selling price in the same area. (Note: Due to marketing purpose, marketer will always input a higher price on this in order to create a scenario where buyer can secure a property at lower price)
- Bank Price (Valuation): The price that bank value on the property and also the most important price if you require a mortgage.
You must have a clear idea on this 3 price especially purchasing subsale property. Refer to the below case study,
A landed leasehold property in Bandar Sunway
- Selling Price: RM700,000.00
- Market Price: RM750,000.00
- Bank Price (Valuation): RM670,000.00
Based on the above price, the bank will only finance 90% based on the bank price (90% x 670,000=603,000.00), with this you may require additional down payment for the property (700,000.00-603,000.00= 97,000.00). SO please make sure while signing the booking form with real estate agent get the correct bank price rather than selling & market price. The higher bank price the better.
Tips: If you can choose a property where the Bank price is higher than the selling price, IT WILL BE GREAT.
PROPERTY CONDITION / NEIGHBOURHOOD
Lastly, the property condition & renovation shall be the last 2 extra point. If the current owner had spend huge money on renovation and taking good care then you can enjoy the this services almost free.
Make sure conduct a few round of details communication with the neighbour before purchase the property. This is make sure you do not have any nasty neighbour right next to you. This is your home and going to stay there couple of years, so choose a right neighbour (where you have the option right now) rather than a new property where you not even know who is your neighbour till you get the key or after few years.
Tips: New property quality condition not necessary better than old & choose the right NEIGHBOUR.
The above contents is for information purpose only. Any views or opinions represented in this blog are personal and belong solely to HomeBrickz.com and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated. The owner will not be liable for any errors or omissions in this information nor for the availability of this information.