After six months of property hunting, researching, and viewing more than 50 properties, I finally found an investment property that meets all my requirements — including positive cash flow.
In this article, I’ll share my journey of buying my first investment property in Malaysia and explain how the subsale property buying process works, from viewing the property and making an offer to securing a loan and signing the Sale and Purchase Agreement (SPA).
Hunting for a Property
During the first six months, I researched the real estate market in the Klang Valley through books, conversations with property agents and investors, and countless videos.
Robert Kiyosaki mentioned that he viewed 100 properties before buying his first one. Hence, I did not rush and spent a lot of time researching and looking around.
My main focus was the Klang Valley because I wanted to invest in an area with strong rental demand and good long-term potential.
Whenever I found a property that interested me, I would run the numbers through my property investment simulation worksheet. I wanted to make sure the property could generate positive cash flow and also evaluate it against my 10 investment criteria.
For subsale properties, I would contact the agent and ask for information such as:
- Whether the property is currently tenanted
- The tenant’s background
- Current rental price
- Management fees
- Which floor the unit is on
If the property passed both tests — positive cash flow and a high score based on my 10 criteria — I would arrange a viewing with the agent.
Tips When Viewing a Subsale Property
After viewing multiple properties, I picked up a few things that I think are worth checking when viewing a subsale unit.
1. Take photos and videos
For a subsale property, ask the agent whether you can take photos and videos for your own reference, without sharing them publicly or using them for commercial purposes.
This is important because when you eventually make an offer, you are essentially buying the property in its existing condition.
Having photos and videos from the viewing gives you a record of what the unit looked like at the time of your inspection. For example, if certain items are removed by the owner or a major defect appears later, such as peeling wallpaper, you have documentation of the property’s previous condition.
2. Talk to the tenant
If the unit is tenanted, ask the tenant whether they like living there and whether they have experienced any problems with the property.
You can also ask whether they are planning to renew the tenancy and, if so, for how long.
This gives you a better idea of what to expect after the property is transferred to you.
3. Look beyond the unit
Don’t just look at the unit itself.
Visit the facilities and refuse room, and observe how residents live in the condominium.
Ask yourself:
- Are the facilities well maintained?
- Is the refuse room clean and properly managed?
- Do most residents own cars or rely on Grab?
- Does the overall environment match what you are expecting from the property?
These small observations can tell you a lot about the actual living environment.
4. Check the notice board
Don’t forget to check the condominium notice board.
Look out for notices that could indicate potential issues, such as reports of robberies, vandalism, maintenance problems, or other disputes.
Finding My Unit at South Brooks, Desa ParkCity
After viewing multiple properties, I finally found a unit that fulfilled all my requirements: South Brooks at Desa ParkCity.
I first came across the property on YouTube. Coincidentally, my friend, who is also a real estate agent, highly recommended South Brooks because of its location and rental demand.
She agreed to become my agent and helped me look for a suitable unit within my budget.
She eventually found a unit that was already tenanted to a Japanese tenant. She also provided me with information about the current rental price, management fee, quit rent, assessment tax, and fire insurance.
I ran all the numbers through my investment simulation and evaluated the property against my 10 criteria.
The unit passed both tests, so I requested a viewing.
During the viewing, I took videos of the unit, walked around the facilities and the surrounding township, and spoke with the tenant.
I also checked the notice board and did not see any obvious red flags.
Making an Offer
After the viewing, I was quite certain that this was the unit I wanted.
I started negotiating the price with the agent, with my friend helping me throughout the process.
At the same time, I asked the seller for proof of the tenancy agreement so I could verify the rental price and tenancy period.
Ideally, I would also recommend asking for the strata management’s annual report and AGM meeting minutes to check whether there are any ongoing disputes or major issues.
However, not every seller is willing to share these documents, especially when the property is in high demand.
Applying for a Home Loan
While negotiating the price with the seller, I also approached several banks to apply for a loan.
Usually, banks will require documents such as the booking form and property title before they can formally process the loan application. However, you can also ask for a loan pre-approval before committing to the property.
You can usually submit an application through the bank’s website, after which a banker will contact you for more information.
I told the banker that I had found a unit and was currently negotiating the price with the seller. I wanted to know how much I could potentially borrow before finalising the deal.
One important thing I learned is that banks do not only look at your salary.
They may also consider factors such as:
- The market value of the property
- How much the bank could potentially recover by selling the property in the event of default
- Your credit profile
- How long you have been working for your current employer
Documents Required for Loan Pre-Approval
The documents requested by my banker included:
- Latest 3 months payslip
- Latest 3 months bankstatement tally with payslip (softcopy download from app/website)
- Photocopy of ic
- Saving (photo of saving like FD, ASB , or unit trust for supporting doc ya )
- EPF statement for the past 2 years (softcopy download from app/website)
- Address of the property
Based on these documents and the property information, the banker provided an estimated maximum loan amount.
This was useful when negotiating with the seller because I had a better idea of how much I could borrow.
Offer Accepted
Once we agreed on the price and the seller accepted my offer, I paid a 3% booking fee and requested a copy of the property title from the seller’s agent.
I then submitted the booking form and property title to my banker so that the bank could formally process my loan application.
At this stage, the bank also asked how much I wanted to borrow.
Typically, you may be able to borrow up to 90% of the property’s purchase price, depending on your circumstances and the bank’s assessment. You may also have the option of financing certain costs, such as legal and valuation fees.
Depending on the bank, additional documents may be required, such as an employment letter.
In my case, I decided not to include the legal and valuation fees in the loan.
I was using my own lawyer, who was also on the bank’s panel and could offer me a discount. The valuation fee was also cheaper for me to pay in cash.
Tip: You don’t have to finalise the loan amount immediately
At this stage, you don’t necessarily need to decide on the exact amount you want to borrow.
You can provide the bank with an estimate and finalise your decision once your loan has been approved and you receive the Letter of Offer.
Also, keep in mind that the legal and valuation fees shown in the Letter of Offer are estimates. The final amount will depend on the actual billing.
Signing the Loan Letter of Offer and Sale and Purchase Agreement (SPA)
Once I decided which loan to take, I signed the Letter of Offer.
I also decided which lawyer I wanted to use to handle the Sale and Purchase Agreement (SPA).
After signing the Letter of Offer, I informed the seller’s agent and requested the contact details of the seller’s lawyer.
Some sellers may prefer both parties to use the same lawyer to speed up the process.
The drafting of the SPA took around two to three weeks.
When signing the SPA, I had to pay the remaining 7% of the property price, along with the applicable legal and valuation fees.
In my case, the seller decided to use the same lawyer.
However, there was an additional complication: the strata title was still under the developer’s name.
Because of this, the transfer of the title to me would take an additional four months.
In total, the entire transaction is expected to take around seven months from the initial offer to completion.
What Happens After the Title Transfer?
Once the transfer of title is completed, the bank will disburse the 90% loan amount to the seller.
After the payment is settled, the seller is required to hand over the keys within five working days.
Since my unit is currently tenanted, there is another step involved.
I will need to arrange for the tenancy agreement to be transferred or redrafted under my name, and the seller will transfer the tenant’s rental deposit to me.
How Long Did It Take?
From the moment I started researching and hunting for properties to reaching the final stage of my first property purchase, the entire journey took around 1.5 years.
This is only the beginning of my investment journey. I aim to buy another one within a few years if this investment works out.
I will continue to update this blog about the property, including its rental performance, expenses, cash flow, and whether my investment ultimately turns out to be a success or a failure.
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