Common Mistakes Malaysians Make When Buying Property (and How to Avoid Them)

 

Introduction: Buying Property is a Big Deal

For most Malaysians, buying a property is the biggest financial decision they'll ever make.
But because it's so exciting — and sometimes pressured by friends, family, or FOMO — many end up making expensive mistakes.

Today, let’s walk through the most common property-buying mistakes in Malaysia and more importantly, how you can avoid them.

1. Not Knowing Your True Budget

Just because the bank approves you for a RM500,000 loan doesn’t mean you should borrow that much.

✅ Tip:
Use the 30/30/3 Rule:

• 30% of your monthly income should cover mortgage payments.

• 30% down payment ideally.

• 3x your annual income is the max price of property you should target.

Example:
If you earn RM5,000/month → mortgage ideally ≤ RM1,500/month.

2. Ignoring All the Hidden Costs

Buying a house isn’t just about downpayment and loan.

Hidden costs include:

• Stamp duty (RM10k+ for mid-range homes)

• Legal fees (lawyer fees, SPA, loan agreement)

• Valuation fees

• MRTA/MLTA insurance

✅ Tip:
Prepare at least 5%–7% of property price for these extras.

3. Overestimating Rental Yield (For Investors)

Thinking "I can easily rent it out for RM2,000/month" is dangerous.

Reality check:

• Many condos sit empty for months.

• Rental markets fluctuate.

• Maintenance costs eat into profits.

✅ Tip:
Always use conservative estimates (example: assume 10% vacancy annually and maintenance fees).

4. Choosing the Wrong Loan Package

Some buyers blindly pick the first housing loan offered.

Mistake!

Loan terms (interest rates, lock-in periods, flexibility) matter a lot over 30 years.

✅ Tip:
Use home loan comparison sites like iMoney or RinggitPlus.

✅ Pro Tip:
Sometimes a slightly higher rate with no lock-in period saves you more flexibility long-term.

5. Not Checking Developer Reputation

Especially for new projects, choosing a bad developer leads to nightmare:

• Construction delays

• Poor quality

• Abandoned projects

✅ Tip:
Always check:

• Developer past projects

• Any late delivery complaints

• Financial strength

6. Buying Emotionally, Not Logically

"I fell in love with the kitchen!"
"I love the pool view!"

Be careful.
Buying property is about long-term finances, not just emotional excitement.

✅ Tip:
Before signing, ask:

• Is this area growing in value?

• Are the amenities sustainable (future MRT, malls, universities)?

• What’s the potential rental demand?

Real-Life Example: How Small Mistakes Cost Big Money

• A young couple bought a condo RM500,000.

• Monthly installment RM2,300.

• After 5 years, market price dropped due to oversupply — now valued at RM450,000.

• Monthly rental achievable: RM1,800.

✅ They overpaid. ✅ Wrong location (too many new condos around). ✅ Now stuck unless they sell at a loss.

Conclusion: Property is a Marathon, Not a Sprint

Buying your first (or second) property should be a carefully planned decision, not an emotional race.

Take your time, do your homework, calculate conservatively, and always be prepared for hidden costs.

Because in property, small mistakes today = big regrets tomorrow.