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???
{ 13 comments… read them below or add one }
Im interest in low cost apartment, can I have more detail on the low cost apartment.
pls provide me more information on property investment.
i m really interest to buy this house pls know me a contact details
Hi Horlic,
Thanks for your sharing. I wish to ask for your advice here. When we about talking about yearly ROI % ( positive cash flow ( rental – off all related expenses such as loan + insurance + quit rent+ accessment ) x 12 ) / invested capital ( downpayment + renovation + lawyer fees etc )
how many % of roi will consider as good deal?
7% onwards?
Low cost apartment is meant for the needy..low income earner. We should not steal their rights!
I’m intrested in the low cost of Semarak. Please let me have the contact detail.
may i have more detail of semarak and the contact thanks
I would like to buy a low cost flat at Bandar Parklands, Klang. This is my 1st time buying house. I buy it for rent to others. So, I would like to ask your opinion about the low cost flat in Parklands. Worht for money or not. Thx
No, i meant RM 42000 low cost flat in Parklands, Bdr Bukit Tinggi 3. It is ok? If compare the low cost flat between Setia Alam and Parklands, which one u recommend? Thanks for your opinion ^_^
I’m intrested in the low cost of Semarak but in kuala lumpur setapak . Please let me by my email .
l would like to buy a low cost flat at bandar setia alam,klang,
please let me a contact details.
thanks
What kind of details? I assume you are asking on the good location to invest in low cost apartment below RM150K. I suggest you may keep an eye on low cost apartment surrounding Segi College at Kota Damansara, Subang USJ, Pusat Bandar Puchong, Sunway, and etc.