Setia Alam Semarak Low Cost Apartment Good Rental Property Investment?

Are you a property investor who keen to make money from rental? What to invest with your extra savings to make more money? Perhaps you may buy a low cost apartment in Setia Alam to collect rental. What if the rental Return Of Investment (ROI) is double or even more than Fixed Deposit rates?

Case Study: How to Make Money from Semarak Apartment

The apartment is developed by SP Setia Group, Malaysia’s Top Property Developer for 4 consequent years from 2005 to 2008 ranked by The Edge.

Project: Semarak Apartment @Setia Alam, Shah Alam
Launching Price: RM 42,000
Down Payment: RM 4,200 (10%)
Size: 682 square feet

What is the ROI? Fixed Deposit VS Property Investment

Let’s do a comparison using a simple investment calculation in Microsoft Excel templates to compare how much money you can make from both Fixed Deposit and Property Investment.

• If you deposit your money into Fixed Deposit Account for 15 years:

Assume Fixed Deposit Rates is 3% p.a

• If you invest your money into Property for 15 years:

Assume Home Loan interest rates is BLR-0%

Analysis

Monthly home loan installment = RM 309.42 (will it difficult to achieve rental which is higher than this figure?)

I assume the rental collected is just enough to cover monthly home loan installment and other expenses, which means zero cash flow. In this scenario, do a property investor still able to make money from the property?

Refer to the table shown on above; the home loan will be fully paid on 180th months (15 years). Finally, you own the ‘real’ ownership on the property with the initial down payment of RM 4,200. That means your RM 4,200 have became RM 42,000 (I make another worst assumption that your property value is maintaining at same price after 15 years. Normally it less likely will happen)

Conclusion

Fixed Deposit – You make more money of RM 2,343
Property Investment – You make more money of RM 37,800

So, have you got the interesting parts on Property Investment???