Financial planning series Part 1: How would you invest one million Ringgit in properties

Updated 21 Aug 2017 – By Loanstreet


Deciding what type of property to buy with a million Ringgit can be a tough decision to make. In this article we will analyse three possible options. The first option will be investing the entire amount in a terrace house, the second will be buying two condominium units of similar value, and the last would be buying several apartment units of a lower value.

Entry costs for a terrace house is relatively cheaper compared to buying several apartments when you buy it with a loan since each individual is entitled to 90% financing for the first two residential properties but only 70% financing for the third property onwards.

Furthermore, the resale value for terrace houses is normally higher than that of condominiums and apartments at certain areas. However, investing in a single terrace house is undoubtedly the riskiest option. This is because if a natural disaster such as a landslide occurs, you’ll be left with a muddy mess and still have to repay your mortgage.

All condominiums in Malaysia come with some basic facilities such as a swimming pool and gymnasium, thus drawing a wider range of possible renters. If you buy two condominium units, you could easily stay in one and rent out the other, or if you buy them before they are fully developed, you could sell off one unit when it is completed – at a premium! Condominiums are a good long term investment given how densely populated cities are becoming nowadays.

Investing in several apartment units is, without a doubt, the most secure option. This is because should any unforeseen circumstance happen to one of the properties, then only that property will be affected. Let’s think of it this way, if one of your apartment unit is destroyed by a fire, the remaining four properties will not be affected.

In addition, receiving rentals every month increases your passive income. However, owning and renting out several properties at the same time can be a hassle as you will have to deal with several different renters.

We recommend going for the second option if you’re looking for a safe and hassle-free investment. However, if you feel that you are able to manage several apartment units and would like to diversify your risk as much as possible, you could go for the third option.

We would only recommend buying a terrace house if you have enough savings to weather out any misfortunes. In a nutshell, if you are a risk taker then you should invest in a terrace house. On the other hand, if you are a risk averse, then investing in two condominium units or several apartment units will be a better choice for you.

Not investing in properties could be one of your top financial regrets. To avoid being trapped by your own financial regrets, read our articles and learn how to be your own financial planner. Moreover, here are some articles regarding REITs and bankruptcy. To have a better understanding on financial planning, you can read our articles on how to invest RM 10,000 wisely and how to avoid overspending.

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