Whilst most homeowners and investors opt for a single property to live in or buy-to-let, a growing number of buyers are interested in buying land. Whilst this may carry greater risk; you stand to make a substantial return on your investment within a matter of months. If you reside in Malaysia or are just looking to expand your existing investment portfolio, continue reading to familiarise yourself with a guide to buying land in one of Asia’s friendliest and most welcoming countries.
Residential land
If you are considering jumping on board the buy-to-let bandwagon, it may benefit you to buy residential land. This may include single-family homes, multi-family homes, condominiums, and even entire apartment buildings. When compared to vacant land and agricultural land, residential land tends to be the most expensive option. To save a little bit of money or to secure a highly sought-after location in Malaysia, vacant land and agricultural land can be bought and converted or merged into residential land if necessary. This does, however, tend to require a great deal of time and effort to do so. It is also worth noting that residential land is governed by a unique set of rules when compared to agricultural land. As a result, you must decide which land you require at the earliest convenience and stick to your decision.
Buying land as a foreigner
Malaysia is the only Southeast Asian country where foreigners are permitted to buy and own land and one of the only countries in the world where you are not required to be a citizen in order to buy land on a freehold basis. This is largely due to the fact that different states in Malaysia are governed by different foreign property ownership limits. The neighbouring countries of Thailand, Cambodia, Vietnam, and the Philippines, however, tend to be a little stricter. It is entirely possible to buy and own land in Singapore as a foreigner but only if you have been a permanent resident in the country for a minimum of five years or have made a significant financial contribution. As a result, if you are looking for affordable tanah untuk dijual abroad, Malaysia may be one of your best options.
Commercial land
Aside from residential land, commercial land is a great option for investors or business owners looking to establish a park, company, gym, restaurant, café, or car park, just to name a few. But even if you are the sole contributor in the acquisition of commercial land, you are not necessarily responsible for the construction of commercial property on said land. Alternatively, you can lease the land to an external company and benefit from monthly rental payments. If you plan to buy commercial land that will be passed on to a project developer, you must familiarise yourself with their credibility and reputation beforehand to ensure you are not making a costly and time-consuming mistake that you are likely to regret down the line. In the simplest of terms, you must be confident in their ability to avoid declaring bankruptcy or any major debts in the not-so-distant future. If you are unsure, a Malaysian solicitor should be able to impart expert advice and point you in the right direction.
Financial options available
As a non-resident, it can be difficult to be accepted for a loan to buy land in Malaysia. This is, however, comparable to most countries with the United States, in particular, requiring a down payment that tends to cost more than the price of a down payment on a house or an apartment, even for residents that were born and bred in the country. This is because banks tend to view land purchases as riskier than property purchases regardless of which country you are looking to buy land in. As a general rule, a number of international banks grant overseas loans for foreign investors but will only do so for the purchase of residential properties in select cities including Japan, Australia, and the United Kingdom.
Land titles
In Malaysia, there are a number of land titles that you must familiarise yourself with. A leasehold land title, for example, may be your only option as a foreigner and lasts from 60 to 99 years depending on the purpose for which it will be bought. As the leasehold comes to an end, you must choose to renew it at the earliest convenience. A freehold land title, on the other hand, signifies that you are the owner on a permanent basis with no renewal necessary. Finally, a Bumiputera reserved land title favours local Bumiputera residents and is probably the least likely option as a foreigner.
When it comes to buying land in Malaysia, you must conduct research on residential land, commercial land, financial options available, buying land as a foreigner, and land titles.
