Latest Malaysia Base Lending Rate (BLR) Increased From 5.55% to 5.80% in March 2010!

12 March 2010 | Category: Property Investment | 4 Comments

So far, most of the banks in Malaysia have made announcement to increase the Base Lending Rate (BLR) to 5.8%, effective from March 2010. Here are some of the banks’ new BLR rates:

  • BLR Alliance Bank = 5.80% (12/03/2010)
  • BLR AmBank = 5.80% (10/03/2010)
  • BLR CIMB Bank = 5.80% (09/03/2010)
  • BLR Citibank = 5.80% (11/03/2010)
  • BLR Maybank = 5.80% (09/03/2010)
  • BLR Hong Leong Bank = 5.80% (10/03/2010)
  • BLR Public Bank = 5.80% (09/03/2010)
  • BLR OCBC Bank = 5.80% (11/03/2010)
  • BLR UOB = 5.80% (11/03/2010)

For the latest updates of both foreign and local banks’ BLR rates in Malaysia, please visit Banking Info


Investing Rental Property for Child Education Fund in Future, Is It Workable?

11 March 2010 | Category: Property Investment | 1 Comment


What is the best way to plan your child education fund for their study at university or college in future? Is it workable to plan the education savings fund by owning rental property? It is workable for me. Below is the ROI calculation for a low income rental property:

  • Rental Property Price = RM200,000
  • Down Payment (10%) = RM20,000
  • Mortgage Monthly Installment = RM797.64
  • Mortgage Package = BLR – 2.4% = 5.8% – 2.4% = 3.4%
  • Mortgage Loan Tenure = 30 years
  • Rental Rate = RM1000 (Assume zero cash flow investment, house rental income is sufficient only to cover all the costs include loan payment, maintenance fees, and etc)
Child Education Progress in Malaysia

Age 0 – 4 = Baby stage
Age 5 – 6 = Kindergarten
Age 7 – 12 = Primary School (standard 1 to 6)
Age 13 – 17 = Secondary School (form 1 to 5)
Age 18 = Enter to University / College

Child Education Fund via Rental Income

Age 0 = Buy a rental property
Age 1 – 16 = Collecting rentals
Age 17 = Selling property within 1 year
Age 18 = Cash is on your hand and ready to pay for University / College fees

If you buy a rental apartment for your newborn baby from day one, you may have 16 years (or equivalent to 192 months) to rent out your property and collecting rentals before you sell the property at 17th years and get the cash ready for your child’s university fees.

  • 16 years = 192 months to collect rentals
  • Accumulated principal paid (on 192th months) = RM73,382.28
  • Mortgage Loan Balance (on 192th months) = RM106,617.72

Don’t forget about the capital gains on rental property! Basically, house price appreciation over the years is a norm thanks to the inflation. Assuming the property value appreciation is growing 2% annually for 16 years. By the time, selling rental property at RM274,557.14 could earns you gross profit of RM167,939.42.

  • Selling Price (after 16 years) – Loan Balance (after 16 years) = RM167,939.42 (gross profit, cash on hand)

Don’t you think that is a great investment?

House Rental Rates

Bear in mind, we haven’t taken into consideration on the appreciation of rental rates. We might not able to predict what will happen to the rental rates on 16 years later. But, do you think it will remain the same, RM1000, since the past 16 years ago? Perhaps our auntie uncle readers here may share with us about the history of rental market in Malaysia?


How to Avoid Bad Tenant and Choosing the Right, Potential Good Tenants? Landlord’s Tips!

10 March 2010 | Category: Property Investment | Leave a Comment


How to choose the right tenant for your rental property investment? Becoming a successful landlord, the knowledge of how to do tenant screening is important! Else, choosing the wrong and problem tenants will screw up your return of investment eventually.

How to Choose Good Tenant?

Talk to Them. First, I reckon the tenant screening process for choosing the right tenant started from your first conversation with the potential prospect. Pay attention to the way they talk, how they ask question, and how they answer your question. Judge their altitude and manner throughout the conversation.

Meet Them Face to Face. Secondly, ask yourself what is your first impression on the prospect? Is the person come on time to view your property? Are they dressed well? Is their car well maintained? It gives you more idea on what types of tenant they are like to be in future.

How to Avoid Bad Tenant?

Get a Name Card From Them. It provides a lot useful information. Call up the company and verify the information provided and ask more details about them. Example: Are they leaving the company soon? Are they confirmed permanent staff or still under probation period? My main concern is, are they able to pay rental on time without a stable job and income?

What if the prospect does not have a name card? Don’t be shy, ask for their company name. If they refuse to do so and keep their profile mystery, are you comfortable to deal further with them? I won’t.

Landlord’s Tips

Visit the potential good tenant prospect’s current staying house if possible. Be honest, I come across few experiences with my ex-tenants who are really surprised me when notice their house is cleaner and much better maintained compare to my own staying house.

After visiting, I believe they are good tenants, it convinces me with lesser worries to rent my apartment to them. Fortunately, they did maintained my property well till the end of tenancy agreement.

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