Rental and Resale (All about Rental and Resale prices in Iskandar)

sgtsk · May 10, 2016

rotikok said:
Not hell lot, those are atas type PRCs, they choose developed countries because they are capable...or mostly ngam ngam capable. I remember i made my own prediction 3 years back about 2016 iskandar super bear market and oversupply forecast (looking back, i think im very correct on this; few years back ppl rebutting my claim with paper profit as evidences, now really worth a laugh).

Now my own super prediction: by 2018 to 2020, there will be a waves of not so well yet sufficient earning middle class PRC, driven by lack of investment option in their home country (scare of shares and sluggish 60 yrs leasehold residential ppty market, note:there is no freehold ppty in china), will come in massively to iskandar for investment.... and the bubble will blow and sustain for a number of years thereafter.

Few traits: 1.there are a lot of ppl belongs to this class in China, more than those went to US, UK and Australia combine 2.attracted by better environment (provided indonesia dint kacau with their infamous haze), education MM2H and freehold status of their investment ppty and maybe cheaper than the one they own in china 3.increasing PRC population in Iskandar (hopefully johor gov dint make noise about it), and i like to make bold estimate, by 2025, there will be 100K of PRC chinese buy a piece of investment ppty in Iskandar, about 50K of PRC will lives in this place for more than a month in a year.

This wave of PRC coming in is quite certainly obvious, i expect the magnitude will be significant and ppl will start to feel it by 2018...but impact on ppty price, still hard to assess.

Prove me wrong!

I also think prc developers are after the markets for alternative oversea education and healthcare which are growing fast in China. Iskandar if well planned for, developed and managed, could be attractive for prc having such needs.

According to news report, there are some 160k PRC students in Australia and some 600k in US. There are also very sizable PRC students in Europe, Canada, Singapore. Today there are also more than 10 thousands prc students in Malaysia. Altogether, there are few millions China student studying oversea, many in secondary schools. If iskandar could offer reasonable, comparatively lowere costs and acceptable educational opportunities and quality to meet the needs of prc students and their parents, I think it makes sense for Chinese developers to be positive about iskandar. Further, iskandar also could offer competitive medical and healthcare services for prc looking for cheaper western medical treatments.

Manhattan · May 10, 2016

Does anybody know if we need to pay any income tax for the rental income in Malaysia?

IskandarRocks · May 11, 2016

Manhattan said:
Does anybody know if we need to pay any income tax for the rental income in Malaysia?

Yes, absolutely. 26% flat rate if you are a non resident. Can deduct a few things such as interest, maintenance, repairs, etc. The normal deadline is May 1 for 2015 income, has been extended until May 15. Late filing carries a penalty.

winners · May 11, 2016

IskandarRocks said:
Yes, absolutely. 26% flat rate if you are a non resident. Can deduct a few things such as interest, maintenance, repairs, etc. The normal deadline is May 1 for 2015 income, has been extended until May 15. Late filing carries a penalty.

With the already low rental + 26% flat rate + excessive wear and tear (as most Malaysian tenants don't take care of their rental units) + fear of absconding tenants = Not really worth it at all.

Tekkun · May 11, 2016

winners said:
With the already low rental + 26% flat rate + excessive wear and tear (as most Malaysian tenants don't take care of their rental units) + fear of absconding tenants = Not really worth it at all.

If it is worth it, I be buying rows of them...LOL

sgcount · May 11, 2016

If foreigners bought say a Johor condo but don't rent them out. What are the monthly/annual payments? Eg

- Property tax (how to calculate?)

- Maintenance fees

- Utility bills

What else huh? Any others?

Thanks.

kawan2sgmy · May 12, 2016

They don't call it property tax; but you have to pay assessment rent half yearly. The bill will be sent to your Singapore address, not sure how to calculate though,
Yr condo management will send you monthly bill for S&C charges and water usage with minimum amount say RM5 or RM7 will be charged.
You can also find out from the management office the yearly quit rent and insurance which is often billed beginning of the year.
Estimated to pay less than RM800 per year (Assessment rent, quit rent, insurance), this amount excludes monthly S&C charges.

Suggest you open a bank account for cheque issuance and internet banking. Most bills can be paid through internet banking, save you the hassle of travelling.

Did I miss out other expenses?

sgcount said:
If foreigners bought say a Johor condo but don't rent them out. What are the monthly/annual payments? Eg

- Property tax (how to calculate?)

- Maintenance fees

- Utility bills

What else huh? Any others?

Thanks.

IskandarRocks · May 12, 2016

sgcount said:
If foreigners bought say a Johor condo but don't rent them out. What are the monthly/annual payments? Eg

- Property tax (how to calculate?)

- Maintenance fees

- Utility bills

What else huh? Any others?

Thanks.

here are the expenses:

Cukai Harta (assessment - some people refer to is as property tax) - 0.13% of the assessed property value every year to be paid in 2 installments. So is the assesed value is RM 1M, you have have to pay RM 650 in half yearly installments for a total of RM 1300 every year. They will sedn you a bill every 6 months.

Cukai Tanah (quit rent - some people refer to is as land tax) - this is a much smaller amount. They dont bill you but you have to pay proactively online or go to the land office every year. For condo you typically dont have to worry about it as the developer pays this and charges your allocated portion as a part of the monthly maintenance payment. This is more applicable for landed properties.

Income Tax - applicable on the rent - for non residents it is a flat rate of 25%. Your rent is considered as income and you can deduct expenses, such as mortgage interest, maintenance fee, repairs, etc.

Fire Insurance - typically the bank with mortgage will arrange for that and will bill you a hefty amount (this is a rackett). The condo management also insures and bills you for your portion. In this case, you can get a certificate from condo management and send it to the bank and they will waive the insurance from their side.

Maintenance - monthly maintenence (typically billed quarterly) as billed by condo management

Utilities - water may be billed by condo management and electricity as billed directly to you by TNB

sgcount · May 12, 2016

Thank u, kawan2sgmy & IskandarRocks for the invaluable info.

I just realize it's not easy for foreigners to invest in Iskandar, especially those who bought the new condos in the last few years where prices are very high.

My monthly bank loan is already about RM3,200. Rental is almost non-existent now, based on what most agents told me. If lucky, can get about RM1,200-1,500 only. That cannot even cover half the monthly bank loan repayment.

The maintenance fee per month is about RM331.

If I get someone to help me settle the rental matters over in Johor (since I live in SG), let's say the charges are 30%. Income tax another 25%. Minus away other expenses, every month actually negative cash flow..... :(

enjoylife77 · May 13, 2016

That's what I told many of my friends who are adamant in buying cheap property in JB. One must consider the associated cost and risk in investing overseas. Many were lured by the incredulous optimistic (rental guarantee and capital appreciation) newspaper & TV advertisement and the colourful brochure at the showroom. Once you signed on the S&P and realized that things are not right, its difficult to reverse your earlier decision without facing a painful monetary penalty.

I always told those who have not commit to consider renting if one must stay in Iskandar for whatever reason.

Personally, I am opened to buying only if a super deep recession hit prices (discount of 55-75%) with my spare cash.

FHBH12 · May 13, 2016

sgcount said:
Thank u, kawan2sgmy & IskandarRocks for the invaluable info.

I just realize it's not easy for foreigners to invest in Iskandar, especially those who bought the new condos in the last few years where prices are very high.

My monthly bank loan is already about RM3,200. Rental is almost non-existent now, based on what most agents told me. If lucky, can get about RM1,200-1,500 only. That cannot even cover half the monthly bank loan repayment.

The maintenance fee per month is about RM331.

If I get someone to help me settle the rental matters over in Johor (since I live in SG), let's say the charges are 30%. Income tax another 25%. Minus away other expenses, every month actually negative cash flow..... :(

Installment: $3200 RM
Maintenance: $330 RM
Taxes: $100 RM
Utilities: $20 RM (minimally for self-cleaning)

Monthly: $3650 RM = $1250 SGD.

It should be okay if you are making more than $5000 SGD gross a month and without any other heavy financial commitments. The only issue is the lease running down if you are not using it for yourself.

FHBH12 · May 13, 2016

enjoylife77 said:
That's what I told many of my friends who are adamant in buying cheap property in JB. One must consider the associated cost and risk in investing overseas. Many were lured by the incredulous optimistic (rental guarantee and capital appreciation) newspaper & TV advertisement and the colourful brochure at the showroom. Once you signed on the S&P and realized that things are not right, its difficult to reverse your earlier decision without facing a painful monetary penalty.

I always told those who have not commit to consider renting if one must stay in Iskandar for whatever reason.

Personally, I am opened to buying only if a super deep recession hit prices (discount of 55-75%) with my spare cash.

There should be some fire-sales with about 10-20% discount around now. Judging from recent developers' launches, the bottom is over. You might be looking at an L-shape price trend, unless RTS and HSR are announced.

sgcount · May 13, 2016

enjoylife77 said:
That's what I told many of my friends who are adamant in buying cheap property in JB. One must consider the associated cost and risk in investing overseas. Many were lured by the incredulous optimistic (rental guarantee and capital appreciation) newspaper & TV advertisement and the colourful brochure at the showroom. Once you signed on the S&P and realized that things are not right, its difficult to reverse your earlier decision without facing a painful monetary penalty.

I always told those who have not commit to consider renting if one must stay in Iskandar for whatever reason.

Personally, I am opened to buying only if a super deep recession hit prices (discount of 55-75%) with my spare cash.

Yes, good advice.

Maybe most rushed in to buy due to heard mentality. And didn't check enough, like me. I didn't even know about this 25% income tax until recently. A Singaporean I chatted online also lamented on the sudden RM1mil restriction for foreigners.

Also, never trust property agents and the brochures/advertisements/articles written by people who are related to Iskandar projects/development. Recently, there was a report saying Iskandar properties will SURGE in the next 10 years. Hmmm....

Tekkun · May 13, 2016

sgcount said:
Yes, good advice.

Maybe most rushed in to buy due to heard mentality. And didn't check enough, like me. I didn't even know about this 25% income tax until recently. A Singaporean I chatted online also lamented on the sudden RM1mil restriction for foreigners.

Also, never trust property agents and the brochures/advertisements/articles written by people who are related to Iskandar projects/development. Recently, there was a report saying Iskandar properties will SURGE in the next 10 years. Hmmm....

There are 2 type of sales men I don't trust. One is the car salesman and the other is the real estate agent.
Ironically, we would test drive the car before we buy but we do not bother to check out the property before we sign.

You simply can't win them all.

sgcount · May 13, 2016

FHBH12 said:
Installment: $3200 RM
Maintenance: $330 RM
Taxes: $100 RM
Utilities: $20 RM (minimally for self-cleaning)

Monthly: $3650 RM = $1250 SGD.

It should be okay if you are making more than $5000 SGD gross a month and without any other heavy financial commitments. The only issue is the lease running down if you are not using it for yourself.

Yes, but it's still precious money. It's not so much a matter of whether one can afford to pay the monthly payment. But if the property is strictly for investment, it must not be money that is slipping away at a loss.

The leasehold is not so much a concern if the condo is new. But it's the 4.5% bank interest and lack of rental and buyers that will drain the money away. By the 5th year, the loss can be substantial.

potter · May 13, 2016

sgcount said:
Yes, but it's still precious money. It's not so much a matter of whether one can afford to pay the monthly payment. But if the property is strictly for investment, it must not be money that is slipping away at a loss.

The leasehold is not so much a concern if the condo is new. But it's the 4.5% bank interest and lack of rental and buyers that will drain the money away. By the 5th year, the loss can be substantial.

Err..you think malaysia is singapore huh?

FHBH12 · May 13, 2016

sgcount said:
Yes, but it's still precious money. It's not so much a matter of whether one can afford to pay the monthly payment. But if the property is strictly for investment, it must not be money that is slipping away at a loss.

The leasehold is not so much a concern if the condo is new. But it's the 4.5% bank interest and lack of rental and buyers that will drain the money away. By the 5th year, the loss can be substantial.

Getting tenant in Medini within these few years can be very challenging, since most parts are not developed yet. $1250 SGD is actually quite affordable if you are using the condo for yourself. In Singapore, you will have to pay over $3500 SGD (net based on above cost categories) to enjoy equivalent space and facilities in a private condominium. If there are good eatery and a small mall nearby, it can be very relaxing for weekend stay. Do treat yourself nicely and enjoy it once it VPs.

sgcount · May 13, 2016

FHBH12 said:
Getting tenant in Medini within these few years can be very challenging, since most parts are not developed yet. $1250 SGD is actually quite affordable if you are using the condo for yourself. In Singapore, you will have to pay over $3500 SGD (net based on above cost categories) to enjoy equivalent space and facilities in a private condominium. If there are good eatery and a small mall nearby, it can be very relaxing for weekend stay. Do treat yourself nicely and enjoy it once it VPs.

Yah... but I'm not staying there. I wish I could. But my lifestyle and work make it unsuitable to live there and work in SG.

If for weekend... maybe can go back once every 2-3 months. Nothing much to do there anyway.

eric3417 · May 13, 2016

Nothing much to do can be a Blessing in Disguise.
I personally like to go Msia and laze around few days do nothing.
Mainly to destress and chill. Let our Tired & Tense up Body catch a break.

:wink:

winners · May 13, 2016

sgcount said:
If for weekend... maybe can go back once every 2-3 months.

Definitely and highly not recommended.

Rental and Resale (All about Rental and Resale prices in Iskandar)

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