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 property viewing I attended this time was Park Green @ Pavilion Bukit Jalil. This is a pre-built property, meaning it is still under construction and I would be purchasing directly from the developer. The expected completion date is March 2029.
The project is the final phase of Pavilion Bukit Jalil and it was supposedly a hotel. However, the developer decided to make it a luxurious residence instead.
The main selling point of Park Green is its direct link bridge to Pavilion Bukit Jalil shopping mall, and sitted right across the park.
All layouts are above 1,200sqft and have at least 3 bed/ 2 bath.
In this analysis, I will use the layout B (3 Bed) as it is facing Pavilion (park view all sold out)
Details of Park Green:
| Completion Year | 2029 Mar |
| Tenure | Freehold |
| Size | ~1,408 sqft |
| Layout | 3 Bed/ 2 Bath |
| Developer | Malton Group |
10 criteria for Selecting an Investment Property
| Criteria | Details | |
|---|---|---|
| Well known developer | Malton | ☆☆☆ |
| Scarcity | Link bridge to Pavilion Bukit Jalil, Right beside a park | ☆☆ |
| Mutiple tenant target | Young Families | ☆ |
| Price | Type B : RM976 psf RM1,374,208 | ☆ |
| 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 | B: 3 Bed/ 2 Bath, facing Pavilion Bukit Jalil | ☆☆ |
| Cash Flow | Current rent : Rm 5,000; monthly cash flow of -RM1,281 | ☆ |
| 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 RM1,374,208 after discounts/rebates.
Purchase costs include:
- Interest payments during the construction period
I plan to take partial mortgage insurance coverage, which costs approximately 4% 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.
After completion, I will need to get a defect check and request developer to do the repair as well refurbish the unit before listing.
The average asking rent in the area is also around RM5,000, so I assumed there could be a 3-month vacancy period after handover, given that it is in the city center.
Total downpayment would be around RM137,421 and I would need to borrow around RM1,236,787.
With a loan interest of 3.7% and 35 years tenor, the monthly mortgage would be RM5,399
Monthly Cash Flow Analysis
Average asking rent is RM5,000 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 – RM0.44 psf including sinking fund
- Property management fee – I will be doing it myself thus RM0
- capital expenditures – in case there is any repair or replacement of furnitures needed
Overall, the money going out of my pocket will be mortgage (RM5,399) + total expenses (RM882), which a total of RM6,281.
Total money flowing in would be the rent, RM5,000.
In total, I will be losing ~RM1,281 each month or RM15,376 annually.
Annual cash flow divided by the total invested capital will bring a negative rental yield of 5.91%.
My objective is to achieve positive cash flow, so this property is clearly a NO for me.
Capital Gain = Icing on the cake
Assuming this project appreciates by 1% annually and I sell it after 10 years, the estimated total profit would be around RM6,185, translating to an annualized return of 0.238%.
The total return is too low, comparing to the stock market of an average of 10% return. Thus, this is a big NO.
Final Thoughts
Park Green is strategically located, with both a major shopping mall and a large public park within walking distance. The connectivity and lifestyle appeal are undeniable, making it an attractive option for owner-occupiers.
However, from an investment standpoint, the numbers simply do not work for me. The entry price is too high relative to the achievable rental income, resulting in negative cash flow and limited upside potential.
For investors focused on capital preservation and positive cash flow, I believe there are better opportunities elsewhere.
The search continues.
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