Invest and Rent JB pty. Return good?

 On MY properties, my friend bought two freehold JB condos as Foreigner buying above RM500k per unit; meant as for bequest/inheritance for his two sons.


He shared that he is just renting out the unit to AirBnB stays, for some days he can still stay in JB too.

Because of his age at 65, he is not able to take MY home loan and have to pay for full condo by TOP.  Each unit he paid ~RM900k (or S$260k); total RM1.8M (S$520k) by TOP in 2024.  One unit has TOP; while another nearby will TOP by 2024.

His two sons' wives are MY who owns MY local properties too.

~

I share my views with him:

1.  Why didnt he pass the monies to his DIL, let them choose the JB condo or landed they wishes.  And being a local, his DILs are not subject to min RM500k threshold pty requirement.   As locals, they would have bought at local prices. 

(of course under both sons' names too. His children have already own SG HDB home liao).

2. For AirBnB rental for both units, even if the rental is RM1k pm, (or RM12k p.a. or $3.5k p.a.), total AirBnB rental of 2 units = RM24k p.a. (or S$7k p.a.).

He can hust work for a few more months before retiring. His salary can cover at least 10-years of AirBnB rentals. So, why take the trouble to rent? 

3.  Upon TOP, all MY homes will likely be halved in values for foreigner buys!!

(No foreigners can buy resale units below RM1M.   And locals have many home choices.)  Smart MY G.

4. The rental yield RM1k p.m. (or RM12k p.a.) gives RM12k/RM900k x 100% = 1.3% p.a., (since it is fully paid); before deducting maintenance n taxes. (Even if at RM2k p.m., rental yield is 2.4%)

Some thoughts which make him thinking. 

Any opinion ?


https://ferrarilim.blogspot.com/2023/07/consideration-for-my-property-purchase.html

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