Should You Invest In Landed Properties or Apartments

Let's say for the record you have half a million ringgit to spend on the hottest location in Malaysia — Penang property with the intent to buy. Which is the better buy- a landed property or a ppa1m? Now, let's say that both choices are located in the same place, and that both of them more or less cost the same. Would you feel that a landed property is better when it comes to your own stay?

For the uninitiated, "own stay" is a term used when one wants to stay for a long time. It also means that a landed property will appreciate at a better rate over time as compared to apartments, or condominiums. Condos get older with time, and look more run-down through the years of usage. The modern facility then will become obsolete or fall into disrepair; value is more likely to fall rather than rise. Landed property owners may get old, but they will rest easy knowing that their property will appreciate as time goes by. Going with landed properties also allow the homeowner unequaled privacy.

If you're buying a landed property for immediate gain in investment, then the scales tip towards condominiums. Condominiums are usually easier to rent out as compared to landed houses. Plus, the rental ROI for condos is much, much higher than landed homes. Moreover, managing and maintaining a condominium is a relatively painless matter because it rests in the developer's hands.

The Pros and Cons of Owning a Landed Property

Landed properties come in many different forms- terrace houses, a semi-detached or a bungalow, etc. These property types are the favorites of investors because of the benefits that they gain over time. While it's true that high-rise strata condos are gaining much speed in today's market, the landed property continues to climb at a good, steady rate. 

The Benefits of Owning a Landed Property

The buyer gets the whole package when they opt for a landed property. Meaning, they own the house that sits atop the property and the land itself. For investors and owners, having a piece of land that you own under your name is one of the main benefits that you could get if you're springing for a landed property. The land is theirs to change or alter according to how they want it. These owners can change the outdoor landscape into an attractive yard, lawn or garden, or turn a piece of their land into a swimming pool. They can add more rooms if the need arrives, or they can create a pet house or a small shed they can relax in after a hard day's work.

The savvy investor will be quick to point out that landed properties are better at appreciating with value over time as compared to high rise properties. For example, a landed home in Georgetown that was bought for a mere RM 150,000 decades ago easily triple and even quadruplet it’s value in today’s market. The gain depends on luck and the location of the landed house. Keep in mind that land is at a premium- it's limited and gets scarcer and scarcer due to the development. This is why highly populated areas in cities fetch for a premium price. 

It makes sense that a landed property goes on to outlive an apartment in terms of longevity. It’s no secret that as time goes by, the value of any high rise will tend to stagnant especially when its no longer considered as highly esteemed. A landed property on the other hand almost always will increase in value as time goes by. 

These are the primary reasons why individuals choose to purchase a landed property in a sub-prime area instead of buying a high rise condominium in a prime location. But don't think that landed properties don't have any disadvantages, because they still do.

The Benefits of Owning an Apartment

Perhaps the best selling point of a condo is that it has better perimeter security as compared to a landed property. This becomes obvious when you have been in resort-style or lifestyle condos within the prime locations. Security may be present, especially in landed properties that are located within gated communities and such, but the security of a high rise is significantly better. It's also included in the total package when you opt in to get a multiple tiered security serviced residence. The security levels are of higher quality; the security personnel are much tighter and stricter all around. 

Speaking of which, high-rise owners pay a fixed monthly sum for maintenance fees in order to enjoy the public amenities and maintenance services. Some of the facilities you'd need to pay for are the following- swimming pool, public sidewalk, the garden, the gym, etc., and any and all types of repairs in both external and internal aspects. A landed property owner will not have to pay maintenance fee each month, but it doesn't mean they have to look out for their property. They will need to do it on their own- the sewage system; the pipes and garden are their responsibilities. Maintenance costs are higher as compared to a landed property.

Choosing whether to buy a high rise condo or a landed property is largely dependent on the buyer's lifestyle and preference. If it's for investment purposes, then it stands to chance that you'll need to do some more research and figure out the current market in order to determine which one is best to buy at the moment. Tenant rental collections will fare better for renters because of the low-entry deposit and fees, while landed properties are great if you're looking at land itself.

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