BY: CAITLYN NG LI YUIN
liyuin@propwall.com
Deciding on the right property for first-time home buyers can be a less stressful affair with the right frame of mind, and Khalil Adis has just the methods.
It's always difficult when it comes to making decisions, more so when it's a major one. Some examples include purchasing your first property, who your life partner will be, and deciding where to go to eat.
First-time homebuyers and investors can rest a little easier knowing that there is plenty of help out there to ease the headache of what and where their biggest purchase will be. Khalil Adis Consultancy founder Khalil Adis is one of the experts in this field, and he has a few handy tips on how to tell what's hot right now and which property suits you.
1) What types of properties are there?
Many people get confused with the types of properties that may fall under the residential or the commercial category. For example, is a SOHO unit under the former or the latter? Those who make the mistake of thinking that it is a residential unit will be in for a surprise when their utility bills arrive; SOHO units are actually categorised under commercial and as such, residents would need to be prepared to pay commercial (i.e. the amount that businesses pay) rates for water, internet and electricity, among others.
The renown speaker helped to define residential units as housing developments under the Housing Development (Control and Licensing) (Amendment) Act 2007, where the owners are protected under this Act to use the property for human habitation.
This can be divided into landed or high-rise (apartments or condominiums) developments. High-rise types come in a variety of forms, and one of them is the studio unit. This is a very popular option for first-time home buyers as it is not only compact, perfect for singles or young couples who are looking for a place to call their own, but affordable as well.
Another type to consider is the dual-key unit, where owners will be able to have two main entrances that are separate and can be used for a variety of reasons. They are very common for large families and investors since the second main entrance can be used for in-laws or rental purposes, respectively.
Khalil went on to explain that commercial units refers to properties that generate income for the buyer. This includes office, retail, shop lots, hotels and shop houses. When purchasing properties that fall under this category, GST is applicable in addition to the commercial rates for utilities.
Some examples of property types that fall under this category include SOHO (small office home office), SOVO (small office versatile office), SOFO (small office flexible office), hotel suites, shop lots, retail units, and offices.
"Hotel suites are a unique type to be purchased; they are situated near major tourism landmarks and thus suitable for investors who would like to rent them out to tourists. They are able to get a regular income stream (rental returns are usually offered every quarter of the year) in addition to getting up to 21 days of stay for free," Khalil explained.
2) Where should you look for your first home?
It is no surprise that many young people nowadays are almost unable to afford their first property in major cities and towns. What with the rising costs of living and stagnant paycheques, the average annual household income is between RM30,001 to RM90,000 whereas the budget to purchase falls below the RM500,000 mark. Places in Klang Valley such as KLCC, Bangsar, Ampang, Damansara Heights, Embassy Row and TTDI have developments that are considered 'trophy properties'.
"These areas are driven by middle income and well-to-do locals, as well as foreign investors. The average quantum price is more than RM600,000," Khalil said.
As such, property market research shows that a majority of people tend to shy away from the famous Klang Valley spots as they are out of reach for many first-time home buyers. Even though that may be the case, projects in KL are still very popular with foreigners, in due part to the currency exchange rate, as well as the prestigious location right smack in the city centre. However, it is target areas in Selangor which are where genuine first-time home buyers go to seek out their properties as it is more affordable.
3) What can a first-time home buyer do?
"First-time home buyers who find themselves on a limited budget should have a strategy in place. They must target those areas that are hotspots, which means that they need to know the geography of the place and establish the upcoming infrastructure. This will allow them to make a more informed decision," advised Khalil.
He showed a map that highlighted the possible areas that would fit within the budget of today's young Malaysians. Places like Gombak, Hulu Langat, Hulu Selangor and Sepang were driven by mainly local buyers as the average quantum price is below RM600,00. This is where properties are bought mainly for personal usage.
In addition, the MRT extension line will add value in the near future to properties along the MRT lines and transport hubs. Here are where reasonable housing prices can be found, to be further enhanced by future economic drivers in the government's pipeline (the Klang Valley Mass Rapid Transit and the High Speed Rail project to Singapore).
Khalil's advice to people who are looking to buy their first homes, upgrading or for investment purposes: "Don't just spend blindly to invest in the first property because prices will definitely go up to hedge against inflation. Conduct plenty of research first, and determine the property that will have good rental yields. Personally, I think that the best time to buy is when there's a lot of uncertainty as people will be holding off from purchasing and you can find some great deals," he enthused.
"It would be best if these property buyers don't stay in their comfort zones, and look to where the next up-and-coming area will be. Choose developers who control their tenant mix (have retail units as well) and there is a ready catchment of population. Above all, they must always spend within their means so that they can manage their funds well," he concluded.
