As mentioned previously, I am currently searching for an investment property, and I’ll be sharing my journey and analysis along the way. My main objective is cash flow.
The first property viewing I attended was at The Park 2 & Park Residences in Bukit Jalil.
My first visit to The Park 2 was during the handover process for my Japanese client. I was genuinely impressed by the development — especially the corridor design, lobby interior, and the layout with only a few units per floor.
However, a beautiful property does not always make a good investment.
Here is my analysis of The Park 2.
Details of The Park 2:
| Completion Year | 2021 |
| Tenure | Freehold |
| Size | ~750 sqft |
| Layout | 1+1 Bed/ 1 Bath |
| Developer | Malton Group |
10 criteria for Selecting an Investment Property
| Criteria | Details | |
|---|---|---|
| Well known developer | Subsidiary of Pavilion | ☆☆☆ |
| Scarcity | Walkable distance to park & link bridge to mall | ☆☆ |
| Mutiple tenant target | Young professional working in KL/ Expats in Bukit Jalil | ☆☆ |
| Price | RM1,066 psf: above median psf of RM739 | ☆ |
| Accessibility | Highways: Jalan Persiaran Jalil 3, Sungai Besi, KL-Seremban Highway, LDP, MEX Highway, MRR2 Highway, KESAS Highway and, Lebuhraya Bukit Jalil Train Station: Awan Besar LRT (10mins drive) Free Shuttle is provided by the mall | ☆☆ |
| Layout | Half Park, Half Condo view | ☆☆ |
| Cash Flow | Current rent : Rm 3,000; monthly cash flow of -RM200 | ☆ |
| Catalyst for potential Capital gain | MRANTI park, KL wellness city which might provide more jobs but timeline unknown | ☆ |
| Big Shopping Mall/ Business Districts nearby | Shopping Mall: Pavilion Bukit Jalil Business District: Aurora Place, MRANTI park | ☆☆☆ |
| Rental Yield | 4.8% | ☆ |
| Overall | ☆☆ |
Simulation
The asking price for the property is RM800,000.
Purchase costs include:
- Stamp duty
- Legal fees
- Mortgage insurance (optional)
I plan to take partial mortgage insurance coverage, which costs approximately 2% of the purchase price.
As a new owner, I would also need to bear utility deposits for:
- Other utilities
- Water
- TNB
- Indah Water
To remain conservative in my calculations, I also included vacancy risk.
Although the property currently comes with a tenancy agreement, meaning I would take over an existing tenant, the tenancy ends in January 2027. The current tenant is a Japanese expat whose company pays the rent, capped at RM3,000 per month.
The average asking rent in the area is also around RM3,000, so I assumed there could be a three-month vacancy period after the tenancy expires.
Total downpayment would be around RM80,000 and I would need to borrow around RM720,000.
With a loan interest of 3.7% and 35 years tenor, the monthly mortgage would be RM3,099.
Monthly Cash Flow Analysis
Current rent is RM3000 per month. I have listed down all the monthly expenses:
- Quit rent and assessment tax – paid twice a year and I calculated the monthly cost
- Insurance – house insurance is needed, in case of a fire, etc
- Maintenance fee – RM0.50 psf including sinking fund
- Property management fee – I will be doing it myself thus RM0
- capital expenditures – in case there is any repaid or replacement of furnitures needed
Overall, the money going out of my pocket will be mortgage (RM3,099) + total expenses (RM540), which a total of RM3,639.
Total money flowing in would be the rent, RM3,000.
In total, I will be losing RM639 each month and RM7,669 annually.
annual cash flow divided by the total invested capital will bring a negative rental yield of 4.96%.
My objective is to achieve positive cash flow, so this property is clearly a NO for me.
Breakeven Analysis
I used Excel’s What-If Analysis tool to determine the breakeven point.
To achieve neutral cash flow:
- The purchase price would need to drop to around RM610,000
OR - Rental income would need to increase to around RM3,743
In my opinion, achieving RM3,743 rental income is unrealistic because tenants can find better options closer to Kuala Lumpur city centre at that price range.
Therefore, the only realistic way to make this investment work is through a significantly lower purchase price.
Unfortunately, the owner was unwilling to reduce the asking price by RM190,000.
A Lesson From the Viewing
Interestingly, the owner attended the viewing session herself and mentioned that she was “losing money” by selling the property at RM800,000.
Fortunately, I had already done my research.
The launch price was approximately RM840 psf, which translates to around RM630,000 before discounts.
This reinforces an important rule in investing:
Trust, but verify
Capital Gain = Icing on the cake
If the property appreciates by 1% annually and I sell it after 10 years, the estimated total profit would only be around RM3,014, translating to an annualized return of just 0.195%.
Of course, property prices may go up, down, or remain stagnant — nobody truly knows.
That is why I view capital appreciation as merely the “icing on the cake,” rather than the main investment thesis.
Personally, an annualized return of 0.195% does not seem attractive when compared to the long-term average return of around 10% from index funds.
Final Thoughts
Despite its excellent location, beautiful design, and strong surrounding infrastructure, The Park 2 does not meet my investment criteria due to:
- Negative monthly cash flow
- Weak rental yield
- Limited upside potential relative to the asking price
At the current valuation, this property is a pass for me.
However, if the price falls closer to RM610,000, I would reconsider the opportunity.
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