There are many types of properties that you can be found in Malaysia:
- Squatter houses
- Low cost houses and apartments
- Landed houses (My choice for capital gain and for staying)
- Apartments and condominiums (My choice for rental - apartment)
- Townhouse or Duplexes
- Commercial - Shop Lots
- Service apartments
- Luxury homes
First of all, squatter house is illegal and yet it is the cheapest house that you can buy or invest. The houses are build with no proper planning but still have the basic necessities such as electricity, water and telephone. These house are usually very dirty and unhygienic. There are are built without any proper permits or certificate. Therefore sooner or later, the government will eventually destroy and crack down those houses. Because these houses are very cheap, you can earn a lot by renting it out. Anyway illegal business always earn a lot but with high risk. I won't go for it because I'm scare.
Low cost houses and apartments
If you don't want to do illegal thing, the low cost houses and apartments are the cheapest property you can buy. These houses are build to the lower income group of people. The rental income of this kind of houses usually can cover the loan interest that you pay. The drawback is the people who rent this kind of houses or apartment, they usually turn your house or apartment upside down. Not only that, they will not pay the rental fees for months and abandon the houses eventually. So, it is high risk to buy a low cost house or apartment. I won't go for it.
Landed houses are the most popular type of properties. The capital gain is usually the highest as compared to other types of properties. But if they are used for rental, then it is a different story. The prices for landed houses in Malaysia are usually higher (at least 2 time higher) than apartments. However the rental between the apartments and landed houses are almost the same. So if you're buying a landed property for the purpose of rental, you may want to think again. You can even buy another apartment to double up your rental income. However, if you're buying it for your own use and capital gain, landed property is the right choice. I will go for it for capital gain and for staying (I need a lot of spaces). Living in apartment just like in jail to me!
Apartments and Condominiums
The good thing about apartments is the reasonable rental income as compared to the price. So if you buy apartments for the purpose of rental income, you're in the right track especially in Penang and KL. Of course, it doesn't mean you can't buy it for staying. If you don't like big house and spaces, landed houses may not suitable to you. However, I personally think that you should consider condominium.
Rental in condominium is expensive and not everyone can pay that. If they're able to pay that, won't they just own their own property? Usually they are there because of their employers are paying for the rent (e.g. employee relocation package). You may not able to rent it out at all if you're buying condominium at the wrong place. I will go for apartment for rental but not condominium (too risky for me). For staying, I will go for landed property.
Townhouse or Duplexes
Townhouses or duplexes are 2 houses build on the same piece of land. The lower unit occupies the ground and part of the first floor. The top unit takes the remainder of the first floor and the whole second floor. Somehow these type of properties are not very popular in Asia. Let's don't waste time discussing them. I won't go for it either. I'm scare that no resell value and not even able to rent it out. Asia doesn't like this kind of properties.
Commercial - Shop Lots
Commercial properties are shop lots. Usually ground floor is for business and the upper floor is used for residential. Commercial properties are more expensive than residential properties. But, there are some places that the commercial properties are cheaper than residential properties. If this is the case, you may want to consider properly the shop lots and do more researches and background check before you buy. Why they sell cheaper than residential property?
Rental in commercial properties are also affected by economy. During good times, renting it out can be easy but not anymore during bad times. I won't go for commercial property because it is too expensive for me now (maybe not in the future when I become very rich).
Service apartments are residential properties that lie in a commercial district. As they cannot build residential properties in a commercial district, the developers so smart that call these building service apartments. All these service appartment sare neither commercial nor residential. They are not even covered in the Housing Act which means you can't sue the developers if anything goes wrong. Of course, I won't go for this. Will you? I'm scare again.
What you have in mind? Yes, bungalow. I think the only reason to buy bungalow is for staying. Has anyone actually rent out bungalow? Of course, I won't go for this until one day I have 5 kids and 10 grand children, and perhaps 5 BMWs.
In summary, this is my strategy. Buying apartment for rental and buying landed house for staying and at the same time enjoying the capital gain.