Living in Malaysia – choosing whether to buy a condo or a house – for MM2H visa holders and/or retirees

In comparison to many western countries, in Malaysia property prices are increasing, as are rents, although how much they are increasing depends on the location.  So, if you are thinking of living here long-term, buying is probably worthwhile, in financial terms.  And, as prices are reasonablenow, but increasing, should prices decrease in the future as they have in the west, they will probably not become lower than you buy for now, if you buy wisely.

Once you have decided to buy a property in Malaysia, then you must decide what kind of property to buy.

Because of circumstances in Malaysia, making the decision is a bit different to elsewhere.  Most of the factors are obvious, and in common with other countries, but a few are not.

Under the MM2H visa, you can buy up to two properties, priced over RM500,000 each – maybe.  It depends on the state governments, and they change the rules all the time, anyway.

Once people buy a property they renovate – even if a new property they must put in a kitchen and bathrooms as you are usually just buying the shell.  If a used property, most people will renovate to their taste.  Thus it can take months before the property is finished to your liking, after the purchase has been completed.

And in Malaysia, improving your property will not necessarily increase its value.  As mentioned above, people expect to renovate before they move in to a newly purchased property.  It’s very likely they will rip out the bathrooms and kitchen you spent a lot of time and money on renovating, and are so proud of.  So renovate for yourself, and ensure you get enough use out of the changes you make for the money and effort expended – because they probably won’t increase the property’s value.

The main choices of property are a condo or a house.  Different from big cities, where you cannot live in the centre except in an apartment or condo, here in Penang you can also find houses centrally located.

One thing to bear in mind with either kind of property is that due to the humidity, heat and salt air, things deteriorate quickly.

If you buy a condo:

  • You can lock your front door and travel easily with nothing needing doing at home
  • The only maintenance is the apartment interior
  • The condo provides security
  • There can be facilities such as swimming pool, gym, parking, convenience store, tennis courts etc. if you buy into such a condo complex

BUT

  • Most condos don’t allow pets
  • You must pay a sizeable service charge for maintenance
  • Most condos have a certain number of people who don’t pay the service charge, and there is little that can be done to force them to pay
  • Usually there is a shortage of money for maintenance, due to the non-payers, and thus it is not done properly or frequently enough
  • You are only one of many other owners when it comes to decision-making
  • Sometimes as a result, facilities you would like to use fall into disuse – even swimming pools
  • There is no scarcity value with condos – they are building more and more all over Penang  – so they are less likely to appreciate in value, if that is an issue for you
  • Security is often lax in reality, and plenty of condos are burgled

If you buy a house:

  • You can have pets if you wish – and a dog is great security as burglars the world over hate them
  • You are responsible for everything – so you can maintain the property properly, and change it how you wish
  • There is scarcity value – land is scarce in Penang – at least on the island side of the state, so it is more likely your property will appreciate
  • After parking your car you are inside your house in seconds with your shopping or whatever
  • There is no service charge to pay
  • You can have a garden
  • You have more privacy

BUT

  • You are responsible for everything
  • As deterioration is rapid and unrelenting, there is a lot of maintenance to do
  • It is harder to travel as you must secure your home
  • You are unlikely to have a pool or other facilities, so must join a club  for them
  • It is harder to find a house you wish to buy than a condo
  • You have to take care of your own home insurance
  • Being at ground level you may have more problems with mosquitoes
  • It is likely you will have much more renovation to do than with a condo before it is in a livable condition for you

And a point about buying; different agents advertise the same property at different prices. Check http://www.mudah.my , as well as asking different agents.  Once you have found the lowest price, then you can negotiate.

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