4 Considerations – Condo for rental yield

Almost everyone think of huge capital appreciation when they enter the property market. Nearly everyone thinks buying a condo means good rental and a landed property means good capital appreciation. Let’s look at just the condo part today. Assuming that we just want a stable rental income and wants the condo to be easy to rent out. What are some of the key considerations?
Location, location, location. Famous slogan repeated by property gurus in their seminars, workshops, books and more. However, have you ever thought about, what is a great location? Is location equal to any area? Personally, choose an area you are most familiar with. If you stay in Cheras, you would know Cheras more than anyone. You should know where the jams are, where some of the hotspots for rental, where the colleges are etc. Reason why I say so is because when you are familiar, it is easy for you to rent out as well as you know exactly how to tell people why they should rent your place.
Distance from city. In this case, distance from KL city centre. Why is this important? Well, there are MANY people working in the city. There are MANY MNC headquarters in the city. There are MANY different office towers in the city. There are MANY other happenings happening in the city. You may ask, why then not buy in the city? Well, if you can get a good place with positive yield why not? Otherwise, personally I would set a maximum distance of 15km from the city. In other words, when there are no jams, I can be anywhere I want to go in the city within just 15 minutes.
Convenience. Are there shops, clinic, restaurants, shopping malls, hypermarkets, Chinese primary schools etc? These should be within 2-5km away so that you can reach them easily. A plus point would be a hospital nearby. Tell the tenant, ‘touch wood’ but if some emergency happens, you have access to doctor almost immediately. The last thing you want is for the ambulance to face a traffic jam on its way to reach you.
Size of the condo. There is no need to buy anything more than 1,200 sf because you are unlikely to be renting out to a family of 3 or 4. Keep it simple, rent it out to working couples. Even if you are renting to students which I do not really recommend there is no need for such a large unit. The students needs just their room. However, do not buy too small units because capital appreciation may be limited as well. RM500,000 for a 1,000sf condo is quite likely in future but RM500,000 for a 650sf condo? Logically, tough.
Last but not least, check first, is it really easy to rent out. Go online, check the rental rates. Make sure the condo does have a lot of other issues such as too many foreigners or even lots of unit leaking. The toughest part of buying a condo for rental is the time needed to search, view, decide and the documentation process. Once rental starts, it will be continuous for a while. Who knows, your tenant may rent from you until the day you sell!
Jointly written by asali and charles on 11th March 2014.
Next suggested article: MRTA or MLTA? What are the fallacies? Know more.


  1. Well, as long as the condos are located in a good location, easy to fill up renter, enough for bank loan repayment plus some pockets money. Why not, isn’t it ?

    1. that’s my mantra moving forward. The best days are behind us. But good days are still coming, I think.

  2. House debt will be reaching 90% soon. I think still okay as long as our economics are healthy. But what is worst than house debt index see this http://www.themalaysianinsider.com/malaysia/article/low-quality-of-malaysian-education-more-alarming-than-household-debt-says-w
    Low quality Malaysian education more alarming than household debt, says World Bank economist

    1. I agree much more can be done. I have a lot of ideas and so do a lot of other Malaysians who thinks they know education best. But I do not agree with his assessment. If truly it is that bad, I wonder how come can Malaysia continue to be a very competitive economy against the world’s so called better education. As for World Bank or even IMF, do read about their ‘history’ and ‘agenda’. Just personal comment. Cheers.

  3. We are more than behind compare to Vietnam. No me says, if you happen read thru these few days Chinese newspapers you were notice that it is agreed by local tutors.

  4. Hi Asali,
    Where did you get the information, actually, it is quite hard to believe that, we are more than behind compare to Vietnam. besides, what is the criteria or aspect being measured in term of performance? in what assessment has go through to testify it?
    In my opinion, not all information come from expert is correct, I wouldn’t say they are wrong but its knowledge to share from their perspective, anyway, it is good to review or take it as reference point. my 2 cents.

  5. asali avatar

    Let me clarify a bit, the writer is an experience tutor, he and his friends agreed that our education system is far behind. You can refer to local Chinese papers. How true is it I have no idea. 🙂
    I know we can always choose what to be believed or what we can just ignore or thought they got some hidden agenda or anythings. But, i don’t want to go in to that because am being a good listener and a simple person. 🙂

    1. Noted and thank you. I don’t think we are world class without any doubt. At least for primary n secondary.

  6. Whether he/she is an experience tutor or not is separate matter, nowadays, as we are all live in the world full of information, everyday, we are unconsciously receiving any type of information, it is surrounding to everyone. instead of just being listener, shall we halt a little while and to rethink of it before conclusion ^_^
    I may partially agree with the you, our education system is far behind, personally, I don’t think we are far more behind than Vietnam, if that is a case, it is quite interested to know what type of measurement or mechanism in place for evaluation before It is convincible. otherwise, there is no point to discuss further or bother about it, my 2 cents with no offend ^_^

    1. Haha… this time I agree with you fully.

  7. asali avatar

    This time me also agreed with you. But, what’s the problem if our education is behind Vietnam? Our economics used to at the same level or slightly behind HK and SG. How about now?

Leave a Reply

Your email address will not be published. Required fields are marked *