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Residential, commercial, retail, industrial, and real estate investment trusts are the five primary categories of real estate investment (REITs). You have two options when investing in real estate if you want to make money: buy to rent or flip/buy to sell.
An investment in real estate is one made on land, a resource that is becoming more and more rare, much like gold and silver.
There are multiple ways to invest in this resource in the form of various sorts of properties, each with advantages and disadvantages of its own.
The five main categories of real estate investment are listed below: residential, commercial, retail, industrial, and REITs. Additionally, we’ll explore how you might make money from your own homes. First things first: Let’s dispel some widespread misconceptions about real estate investment.
Common Misconceptions About Property Investment In Malaysia
Table of Contents
1) You need a ton of capital to get started
Many Malaysians believe that in order to invest in real estate, you must first purchase your own apartment. The truth is that there are many ways to make money without spending money to purchase a whole property in your own. These are covered in the article.
2) You need a perfect credit history
While having a bad credit history will limit your ability to purchase a home, it doesn’t automatically imply you won’t be able to make money from other types of real estate investing.
3) Property investment is easy and passive
The idea of investing in real estate as a hands-off passive income technique is often exaggerated. You’ll need to get your hands dirty with upkeep, marketing, and tenant care even as the landlord.
Residential investments are investments in properties with Residential land titles, such as terrace homes, apartments, condominiums, and other kinds of assets.
Commercial properties with land titles, which are safeguarded by the Housing Development Act, are an exception to this provision (HDA).
These property categories may have commercial titles, but since the HDA protects them, it is assumed that they have residential titles.
These sorts of commercial real estate include SoHo (small office home office) developments, the most typical and well-liked type of investment.
In comparison to other commercial property investment options, it serves the objective of having a lower entry price point where investors and house purchasers can acquire bigger loan margins (margin of financing up to 90%).
The location of the property is the major element, however not all investments will result in the same financial returns.
Therefore, thorough research is essential because the rental income may not be sufficient to pay the loan installments and interest, and the sale prices will not be maximized, if the property you purchase is not in high demand or is not situated in a “desirable” neighborhood.
Owners normally are responsible for paying all property-related expenditures, such as maintenance, sinking, assessment, and sewerage fees.
If the monthly rental income is less than the instalment and maintenance amount, the property investment could become a burden and a loss for the investor.
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