You’ve settled your monthly bills, and you realise that you have some extra bucks to spare. You’re interested in investing your money but want something that can provide steady returns and with relative low risk.

With the current low interest rates and countless rebates on offer by property developers, it has never been a better time to invest in a property as a side hustle. But the question is, where do you begin?

What is rental yield?

After purchasing your property, you can maximise your return on investment (ROI) through two methods: renting it to tenants for passive income or reselling it at a higher price when the property value appreciates.

Rental yield refers to the money you make yearly from your rent as a percentage of your property’s overall price.

Your Gross Rental Yield (% per annum) can be calculated when your Gross Rental Income is divided by Property Price, multiplied by 100.

For example, you bought a property at RM280,000 and rent it out for RM1,500 monthly, totalling up your Gross Rental Income to RM18,000. Your property’s annual maintenance fees are RM1,200.

You can calculate your Net Rental Yield using the same formula, but subtract your annual maintenance fees from your Gross Rental Income.

Rental yields may vary depending on location and property type, but a score above 4% is generally a good percentage in Malaysia. 

Here’s a quickie on how to kickstart your investment journey!

Do your homework

It’s always a good idea to observe market trends before purchasing a property. Do some research and get insights on important aspects such as the current rental market and strategic property locations which may have upcoming catalytic developments. Equipping yourself with industrial knowledge beforehand will help you make informed decisions when choosing the best investment properties.

Filter out your target market

There are many types of properties; each with their own benefits. Your options range from residential, commercial and industrial properties, to name a few. However, it is important to consider your target market and location before deciding on your winning property.

For example, if you’re looking for students as tenants, you may want to consider purchasing mid-range apartment units instead of a high-end condo as this type of property would attract your target market in terms of affordability and convenience of location.

Compare bank interest rates

With great property investment comes great responsibility, and in this case, it comes in the form of bank loans. When you’re applying for a housing loan, remember to reach out to as many banks as possible so you can make comparisons on the lowest interest rates based on the bank offers.

Embrace the fluctuating market

The real estate market can be a roller coaster ride due to fluctuating market demand, but you can turn this to your advantage!

For instance, property depreciation is inevitable during the ongoing Covid-19 crisis. Housing prices may fall below ordinary market prices as people cannot afford to buy houses amidst trying times. If you have extra money however, this would be the perfect time to secure a property at an absolute bargain. Once the market recovers, you can sell it at a better price and earn higher profits.

Assess other deciding factors besides location

Investing in a property is not just about finding the perfect location. Your affordability also affects the type of property you can purchase. Additionally, you must take other factors into consideration including the developer’s track record, ease of accessibility and available facilities around your property area in order to develop your Class-A property portfolio. These bonus points can boost your asset’s marketability!

Ask for help!

Deciding on the right property to invest in can be challenging, and we hear you. If you require professional advice, UEM Sunrise is more than happy to bring you one step closer to your dream property with the help of our experienced and friendly customer care consultants. Happiness is just one click away!