Property Investment in Malaysia for Foreign Investors

According to http://www.globalpropertyguide.com, the average gross rental yield of properties in Malaysia is among the top 3 in Asia. The gross rental yield, as described by the website, is what a landlord can expect as return on his investment before taxes, maintenance fees and other costs.

Here are the gross rental yields for Asia:

• Indonesia – 12.34%
• Philippines – 10.99%
• Malaysia – 9.22%
• Thailand – 7.99%
• Japan – 5.69%
• Cambodia – 4.33%
• Singapore – 3.79%
• India – 3.59%
• China – 3.55%
• Hong Kong – 3.12%
• Taiwan – 2.68%

Apart from the rental yields, there are also several economic and political reasons why Malaysia property market would be a strong choice for many foreign property purchasers.

Here are a few:

• Malaysia is one of the fastest growing economies in the region.
• Most properties in Malaysia offer freehold property ownership and security of the title.
• Active government incentives (Malaysia My Second Home Programme) encouraging foreign homebuyers to the country through offering 10 year entry permits.
• Tax advantages: remittances of income from overseas are tax free.
• British legal system, property laws and environment
• Attractive, well-priced properties with strong rental demand
• Low buying costs at between 3.4 to 6.75% of the property value, including 2.75% agent’s commission (for first MYR 500,000)
• Strong capital growth of between 15 and 30%
• Effective Land Registry and transparency in property transactions
• Car import duties and other taxes are waived for foreign residents
• No capital gains tax on unearned income inside the country
• No requirement, as in neighbouring countries, for a company or local “partners” to buy property
• Capital gains on real property are less than 5% after 5 years
• Strong demand for resale properties from locals moving to the cities
• Also a high demand for quality new real estate is high from an affluent expatriate market.
• Among the top three countries for the greatest number of tourist arrivals among the 53 Commonwealth countries, according to the World Tourism Organisation.
• Tourist arrivals in Malaysia rose by more than 160% between 2000 and 2005 – an astonishing achievement for tourism.
• Chinese investors already active in the market and this is expected to grow
• Good, modern communications and infrastructure country-wide
• Through its Ninth Plan, the government of Malaysia aims to further improve the infrastructure and general economic development of the country. Analysts believe this will have a positive impact on the Malaysian real estate market.
• The value of the local currency, the ringgit, is far below the euro, dollar and pound sterling, allowing foreign investors to buy a lot more for their money in Malaysia.
• Easy and cheap to reach. 25 flights a week from UK starting at £285
• Low cost of living: eg. petrol at 25p per litre, cigarettes 90p per packet
• Low cost of regional flights on Air Asia to major S.E. Asian cities
• High quality development properties in prime areas are now available
• Strategic location – close to Australia, Bali and Singapore
• English language widely spoken and all property sale agreements in English
• English language newspapers, radio and television available everywhere
• Wonderful climate and food. Superb golf and other sports facilities.
• Extensive white sandy beaches continue to draw holidaymakers.
• Warm, friendly people and peaceful pro-British environment

Source: http://www.globalpropertyguide.com

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