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It’s every Malaysian’s dream to purchase a property of their own, and developers and authorities are offering a bonanza of incentives and exemptions to help them reach their goal.

Even with the national Home Ownership Campaign and other initiatives, though, not everyone has the finances to invest into property in the current economy. Some of us even need to withdraw from our EPF accounts before we can start our property portfolio. So how can you invest in property with limited resources?

Today, PropSocial shares five tips on how you can start your property investment journey on a budget. Even with a salary of RM3,000, you already have what it takes to build a multi-million ringgit portfolio!

Rome was not built in a day so it is better to start saving up for a house now rather than later.

1. Purchase a property using a lease-option

Have clear written goals on what you plan to achieve before investing in properties.

A lease option, also known as rent-to-own, is a programme where you can rent a property for a period of time (usually three to five years), after which you can purchase the unit from the seller.

This lease-option can be a solution if you are facing the common issue of not being able to pay the down payment for a home, or if your loan is not approved by a bank.

2. Purchase a property using an existing mortgage

Double check your monthly expenditure and keep your spending to a limit.

Refinancing can now be considered in Malaysia as interest rates are more affordable, with bank lending spread having decreased substantially below the base lending rate (BLR). However, make sure to research the types of loans and mortgages offered before using this method to make sure that it is viable.

If you have a pre-existing mortgage, but you intend to switch to another lender to pay off your borrowings under a new loan with different terms then, you might still consider remortgaging with the same bank as your pre-existing mortgage, though some offer less competitive interest rates in these cases. 

3. Purchase a property by finding a partner

No man is an island and teamwork always pays off well.

Forming partnerships is common in property investing. Some investors might not have sufficient funds to purchase a property, but they might possess the skills necessary to manage the investment. Hence, if you have decided to try a joint investment with someone, make sure you are clear on what you want to achieve.

For example, discuss what you want to do, how you will do it, what could go wrong, and how you will manage these problems. You may also need to have a backup plan when one of you wants to sell and the other doesn't. Remember to put everything down in writing.

4. Purchase a property by offering a higher price

Work hard to realise your dream of owning your own property.

If you have made a decision to purchase a property, you may offer a deal to the seller to purchase the property at a higher price (above the market value) in exchange for skipping the down payment and paying off the loan via monthly instalments.

Market value is essentially the highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market.

It is possible to purchase a property without having to pay a deposit. Make sure to do your research to know the risk you are taking before purchasing your own property. If the property you are investing in does not generate a positive cash flow or enough profits to cover for its costs and expenses, then you might find yourself in a tough financial situation.

5. If all else fails, use borrowed money to purchase a property!

Many investors get their start with borrowed capital.

You can use borrowed money to purchase a property. This includes borrowing money from someone you know personally, like a friend or a family member who might be willing to lend you the money with no interest rate.

Ensure that you have planned ahead for a clear repayment plan that can enable you to meet the repayments. Use a loan calculator to input your loan terms and generate the list of due dates and amounts that make up your payment schedule.

While the concept of leverage makes it possible to buy or invest in properties beyond your income, it goes without saying that all due caution should be taken when pursuing such high-risk strategies. PropSocial wishes all readers the best in their property investment journeys!

(By Felicia Soon, 19 Feb 2019)

How would you purchase property on a budget? Let us know below!


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Thanks for the article

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Thanks for sharing, great article~

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@carmenfoong we hope you have enjoyed reading it and thank you for your support.

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@Wilson_Chin you are welcome. Hope you find these tips helpful and thank you for your support.

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In my opinion, the best way is to purchase a property that you can afford easily. Let's say you are able to afford a 500k property, instead of buying a 500k property, why not buy a 300k property? This enables you to own a house without much stress.

20150527 023646 1 small

@henry ...agreed but these days everyone's on fast track

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Agreed ez repayment low risk

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@henry Mega-like, Henry! The PropSocial sifu personally believes in living and buying within his reach. But "leveraging on other people's capital" is also a tried and true strategy - ask anybody in the dating game! :D