Property in Malaysia for sale and rent | Buy, Rent and sell real estate and homes

I am looking into buying a condo for renting out, max. price RM 1 mln, good KL location, but not overpriced KLCC area.

I know that overall property investment should make sense, and even more so in Malaysia and KL. However, I fail to see how I can be cashflow neutral -- if that is what I should aim for. No matter how I turn the numbers, I would need yields of 7 to 8% to have the tennant pay my mortgage.

Is this realistic? Where?

I am assuming a property of RM 1 mln (add 3.6% transaction cost), a monthly rent of RM 6500 (minus a monthly maintenance charge of RM 400), a 20 year loan for RM 830k (i.e. 80% of the initial cost) with an interest rate of 4.5% and I just break even. As soon as put some additional cost in (property management charge if I have somebody else doing it, or assuming only 11 rental payments each year to take into account change of tennants) I end up paying almost RM 400 each month (in the first year at least).

Where is the trick? Show me a calculation with realistic numbers, where you have your tennant paying everything for you. Or better: Show me the property that does that for you!

Thanks.

Alex

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