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Pros

1) Low Upfront

• Most of the RUMAWIP / Residensi Wilayah buyers are first time house buyer which is eligible to apply for My First Home Scheme which is 110% financing for the first home provided applicant salary is RM 5,000 and below, which the regulation Bank Islam and MBSB can DISREGARD (if they were in the panel for the project). The Full Stamp Duty Exemption will last until 31 December 2025, so the question is will you need to pay for the S&P Agreement & the loan disbursement charges to the lawyer? If it is free, you are basically paying nothing upfront to get your first house!

2) Low Monthly Payment

• The monthly payment of the RM 300,000 for 35 years based on the interest rates of 3.05% is RM 1162.94. When you include the MRTA or MLTA, it add up to RM 1200-1300. The average maintenance fee will be RM 250. We are talking about the average of RM 1550 monthly to own a brand new house which renting a 3 bedroom 2 bathrom condominium will easily cost as much as this!

3) Demographic

• Many dream to have their landed dream home, prime location, gated and guarded but reality is few can afford one. The next best thing is to have a minimum 2 to 3 tier security in a condominium with like minded people. RUMAWIP or Residensi Wilayah occupants are all Malaysians, at least for the first 7 years after hand over.

4) Urban Area

• Compared to many Government Initiative, RUMAWIP or Residensi Wilayah is always located in the urban area, Wilayah Persekutuan. It is never situated in Bangi, Serdang or Kajang which is truly far away from where the job opportunities are.

5) Basic Condo Facilities

• One of the requirement for RUMAWIP or Residensi Wilayah is to have basic condominium facilities but is is NOT compulsory to have a gym or a swimming pool. The fact is due to the fierce competition between property developers, MOST RMP OR RW usually have either a swimming pool or a gym and often include both.

6) Recession & Capital Appreciation

Due to the Covid-19 pandemic, the typical Malaysian investing mindset of buying a nice mid range property and flip in after 10 years to earn from the capital appreciation is really risky. Renting is actually a good option but was never an asian way to start a family. So buying this RM 300,000 project can be the next best thing because if you are not staying in it, you can rent it out legally (to Malaysians within 10 years after S&P stamped) to cover your monthly payment or partially wouldn’t be too bad.

7) Rental Income as Backup Plan

• An experience investor once taught, to buy where you want to invest but rent where you want to stay! There is wisdom in this saying but sadly not many understand the logic of it. The reason for this saying is , you may not want to stay where you buy in the future due to change of jobs, spouse preference, children’s school location and etc. As for owning a RMW / RW, you may even earn a profit from your rental income if the location of your property’s demand is high, just in case you regret your purchase. Room rental is another option as you only have one parking space (normally), tenants who opt for room have higher chance to ride a motorbike.

8) Relax Regulations

• One must not own a property in Wilayah Persekutuan in order to purchase a RMW / RW! But do you know if you inherited a property in Wilayah Persekutuan from your parents, YOU’RE ELIGIBLE TO APPLY FOR A RUMAWIP / RESIDENSI WILAYAH PROJECT LEGALLY!

9) QLASSIC

• After the rebranding to Residensi Wilayah, Quality Assessment System for Building Construction Works or QLASSIC by CIDB (Construction Industry Development Board) is compulsory for all RUMAWIP / Residensi Wilayah Project. This put a limit on many cost cutting action the property developer can take and guarantee an acceptable standard on the project itself.

10) Only for Government Servant (LPPSA & Bank Islam)

• Many government servant opt to purchase a RMW/RW due to the attractiveness of the package; by using LPPSA (Lembaga Pembiayaan Perumahan Sektor Awam). Due to the nature of the pricing of this government initiative, RM 300,000 or below ; public servant on the lower side of income can easily get the approval for the housing loan and plus Bank Islam is able to top up the remaining sum if the LPPSA fail to grant the full amount (subject to T&C).

11) Quota

• The normal quota is 50% Bumi quota & 50% Non Bumi quota. Chinese generally prefer high floor (for the pleasant view) and the number 8 (means prosperity) & the Malay race generally low floor (in case of emergency, lift breakdown & etc) and the number 4 (symbol for a relax life, shaking the leg but for the Chinese 4 is “sei” which means death). On the day of selection of unit, it’s rarely occur the conflict of interest between races. The Indian race is more complicated which include “number calculation” which I have yet understand, but they prefer facing East usually.

Cons

1) Bare Unit

• The RUMAWIP / Residensi Wilayah unit need a lot of renovation. Firstly you are provided two A/C supply (Master Bedroom & Living Hall), there you need to add two more into Bedroom 2 & 3. After you have to purchase 4 Air Conditioner. The kitchen sink provided it the basic metal type which most Malaysian would love to replace accompanied with a kitchen cabinet. As for the two toilet, you are provided with one power supply for the water heater which means you need to add on another for the second toilet unless your kids don’t mind to take a cold shower all the time. After this, you will have to purchase two water heater preferably with a pump to make guarantee good water pressure. When all the electrical done, you will need to install a plaster ceiling to cover up all the wiring works. Then we move to purchasing the down lights, furniture and etc. Your move in cost is at least RM 10,000 minimum.

2) Parking Lot

• You are given one parking lot. You may have two cars and to purchase the second parking lot is subject to availability of the particular RMW/RW project. As most of the project is RM 300,000, and the policy states that this is the ceiling price; you can’t finance this into the housing loan which leave you with two choice. Your own cash reserve or withdraw from EPF account 2 if you have it. The average price is from RM 15,000 to RM 18,000, and please take note all all RMW/RW (now known as Residensi Wilayah Keluarga Malaysia) offers the option for extra parking lot.

3) Road Congestion

• Most RMW/RW buyer will only have one parking lot. Do imagine the road outside your future residence!

4) Room Rental (Future)

• Due to the pandemic which will result in probably the biggest recession the world have seen, room rental maybe a popular choice for many due to the financial constrain. If you opt to rent out your unit, firstly you most probably can market to bikers due to the lack of parking space and you are NOT allow to rent out to foreigners. Client in this segment probably require serious screening.

5) Slow Moving

• Due to the nature of higher density compared to a normal residential project, when you opt to rent it out; generally it will take a longer time. Especially if the project is a mix development with another higher range condominium which is common. That is one way how the developer gets the land by offering to build an affordable housing project like RUMAWIP / Residensi Wilayah.

6) Size

• The new regulation states that the size should be 900 sqft to 1000 sqft. Most project available till now was probably approve before this new policy kicks in. The average size for all RMW/RW is 850 sqft which is consider really small for a family.

7) House Flipping

• You can only sell the property 10 years after your S&P is stamped.

8) Progressive Payment

• You start paying within months after your purchase. The amount will gradually go up when the construction progress, it may be low but it is still something you have to consider. There is NO DISCOUNT (NORMALLY) for RUMAWIP / Residensi Wilayah projects as it is always sold below market value.

9) Recession & Divorce

• This recession will result in rise in divorce cases. If this happen in first ten years after signing S&P, your only option is to rent it out. It will be a real unpleasant experience when you are not able to just sell off the property.

10) THE BUYING EXPERIENCE

• The prime location for RUMAWIP / Residensi Wilayah project is like a MEGA SALE. Certain location like Bangsar South, Bukit Jalil, Jalan Kelang Lama, Cheras or Kepong can be sold out within weeks, you don’t have the luxury to take your time to think about it. By subscribing to the update HERE you have a better chance to stay ahead.

The Verdict : QLASSIC AND THE PANDEMIC

Due to the pandemic, the margin of profit for a project is reduce significantly. A residential project profit margin is average at 30% and taking in consideration at in 2020 there is only 4.1% our of all new residential property is QLASSIC certified, we can conclude that a RUMAWIP or Residensi Wilayah project will be the best deal in the market as developer WILL NOT HESITATE to cut the cost of construction on all projects mainly on those projects which did not apply for the Quality Assessment System for Building Construction Works or QLASSIC by CIDB (Construction Industry Development Board). The compulsion for all RUMAWIP or Residensi Wilayah to obtain QLASSIC Certification should be the deciding factor over choosing property that is RM 400,000 – RM 500,000 (may not be QLASSIC Certified) which may not guarantee the bang for the bucks! No RUMAWIP / Residensi Wilayah developer would want to have a project scoring low in QLASSIC in their track record.

1) Residensi Prihatin – Apartment that cost RM 200,000.

Pros

• Mortgage payment – Average RM 775 for 100% financing, 35 years
• Controlled Pricing for Additional Parking Lot – RM 15,000 for tandem parking lot & RM 18,000 for side-by-side parking lot. (Maybe able to be included in loan)
• Controlled Pricing for Maintenance Fee – 12 Cent per SQFT (Very cheap)
• Booking fee cap at RM 1,000 & must be FULLY REFUND if transaction fail with or without valid reason.
• Age 18 & Above eligible to purchase.

Cons

• 750 SQFT (Small)
• Quality – QLASSIC Score (Residensi Wilayah Sky Awani achieve 79% QLASSIC Scoring). Apartment costing RM 200,000 will be impossible to build with such quality as MOST if not all Residensi Wilayah costing RM 230,000 have bad reviews online. BUT it is clearly written that it is compulsory be at least 70% in QLASSIC scoring without mentioning any penalty if developer fail to do so.
• Limited choice in location (Currently 2 project, all in Putrajaya)
• 20,000 out of the 40,000 units built in the beginning will be reserve for MAF (Malaysian Armed Forces), you have to be quick to apply.
• Lower chance in Capital Gain, there is tremendous amout of land in Putrajaya.
• Not allow to be sold within 10 years after S&P signed. (EXCEPT TO SPOUSE OR CHILDREN)
• Gross income of individual/with family inclusive of allowances MUST NOT EXCEED RM 5,000 (Only cater to low income group)
• MUST BE FIRST TIME HOUSE BUYER
• NOT CLEARLY WRITTEN in Dasar Residensi Prihatin whether is it allow to be rent out
• As for self employed, company gross income above RM 5,000 for any month out of the latest 3 months bank statement submitted will be rejected. Calculation of income not based on the average income for the last three months or taking in consideration of the cost of running the business. (based on previous application for Residensi Wilayah result)
• Normal unit will only include one parking lot
• Bare unit, owner must spend a substantial amount of money for renovation.

For more information, please visit https://residensiprihatin.kwp.gov.my/

(As of 29 March 2021, there is not one project that have launch)

2) RUMAWIP (Rumah Mampu Milik Wilayah Persekutuan) or now known as Residensi Wilayah Keluarga Malaysia – RM 300,000 and below

Pros

• Mortgage payment still consider relatively low. Average RM 1,200 for 35 years loan.
• Second homebuyer allowed as long as self or spouse do not own any property in Wilayah Persekutuan.
• Variety of choice in terms of location.
• Some projects are walking distance to train station.
• Clearly written in Dasar Residensi Wilayah that it is illegal to be rent out to foreigners within 10 years after signing SNP, which means it is legal to be rent out to Malaysians. It can turn out to be a good investment!
• Size is from 800-900 SQFT, it is possible to get a decent size.
• Individual gross income of RM10,000 and below & household gross income of RM 15,000 is eligible to apply.
• Some of the project facilities are really impressive for the price paid.
• Extra 2 13A Switch Socket Outlet compared to Residensi Prihatin (Maybe useful)

Cons

• Not allow to be sold within 10 years after S&P signed. (EXCEPT TO SPOUSE OR CHILDREN)
• Most of the project won’t be 900 SQFT
• Income of RM10,000 and above for any month out of the latest 3 months salary slip submitted to KWP will be rejected. Calculation of income not based on the average income of three months.
• As for self employed, company gross income above RM10,000 for any  month out of the latest 3 months bank statement submitted will be rejected. Calculation of income not based on the average income for the last three months or taking in consideration of the cost of running the business.
• Normal unit will only include one parking lot.
• Need to self-study on the developer background as project qualities can be bad or really good.
• Bare unit, owner needs to spend substantial amount of money for renovation.

Both RUMAWIP (known as Residensi Wilayah) or Residensi Wilayah did not clearly make it a requirement for certain material brand to be use, for example the wiring should be using Mega Cable or at least must be SIRIM approved and the tap by DOE. Buyer best chance is to research on developer track record in order to get the best bargain. The pandemic definitely have cause most if not all developers to cut cost of materials used sacrificing the quality.

3) Maybank Houzekey Project

This is NOT a government effort. Package can be change more frequently.

Pros

• Bigger size unit and many options
• Better facilities
• Higher quality
• Plenty of projects to choose from
• No salary cap to go for this
• More likely a long term house (bigger space, more parking space)
• Parking can be single, double or more (Can be included in loan)
• Can let go of it after five years if you wish not to purchase it
• Can purchase it after one year of vacant possession.
• Low upfront cost
• No need of progressive payment during construction
• Monthly payment is only after vacant possession, based on 60% of property price for the first 5 years
• Can sell off after you purchase it without any form of restriction

Cons

• Higher installment compared to the government initiative such as RUMAWIP or Residensi Prihatin.
• After five years installment can be double (First five years is similar to renting a house from Maybank which you will own in the future, so instead of paying rent to someone else; you reserve your dream house with renting from a bank)

If you are interested to know more, please click to inquire.

Moving forward, due to the pandemic that will definitely decrease the jobs available in the market, we will see the increase of freelancers like Influencers, YouTubers, Online Businesses, Entrepreneurs or any work that is self created in Malaysia. The demographic of this group of people will largely consist of millennials that would not bow down in defeat towards the coming recession.  

Register a Business 

Firstly you will need to register a business either sole proprietorship, business wholly owned by a single individual using personal name as per identity card or trade name or partnership (Sdn Bhd) Business owned by two or more individuals but not exceeding 20 persons. Identity card name can’t be used as business name. The reason being,  it is necessary to register the business for more than 2 years in order to secure a housing loan.  If buying with cash; please ensure that your income tax Is declared accordingly as the tax officers may pay you a visit anytime! The cost to register a trade name is RM 60, personal name is RM 30 and an additional service fee for the registration in the SSM branch is RM 5. Click HERE to go to Suruhanjaya Syarikat Malaysia (SSM) for further information. When you are setting up a Sdn Bhd (unless you’re  SoImJenn level, please don’t), the rough cost yearly is between RM 2000 to RM 3000. If you wish to know more, click HERE for a quote from Indah Secretarial KL Sdn Bhd. 

Keep all Financial Records for Income Tax

As a beginner in planning your first house purchase as a self employed, declaration of your income tax is a must whether you are planning to buy it with a mortgage or cash. For normal earners (yearly income below RM 120,000) we don’t have to go for partnership; registering a sole proprietorship will do. Please click HERE to read RinggitPlus on what you can save for your personal income tax. In most cases, receipts you keep will fade off, so it is to your best interest to photostat/scan every single one of them and keep it in a file and always send a digital copy to yourself through email . If you are earning more than RM 120,000 , you are not eligible to buy a Residensi Wilayah (unless you are married with less than RM 180,000 yearly household income). For your information, when submitting the required 3 months bank payslips, if your statement shows that the credit in any of the months submitted is more than RM 10,000 (not the average of 3 months), your success rate in getting the approval for a RUMAWIP project is little to none. 

Researching on the Project

It is often too late if you discover your desired project when it is already out in the market. Developers need to have the APDL, both a sales permit and housing development license, as prescribed in the Housing Development (Control and Licensing) Act 1966 (Act 118) before advertising the project. Is good to do a  Google research in order to  get to know all real estate agents who specialize in these types of housing segments or maybe just click HERE to be inform via WhatsApp over any future launch of your desire location, in order to stay ahead.

Researching on the Project

The demand for RUMAWIP is always high; at times the booking fee can be a little demanding like RM 15,000 but not all the time. You probably need to prepare for that or more in case you need to pay for the lawyer fees and etc. Secondly CCRIS, it is best keep good (payment made on time for existing loan), with an existing borrowing such as a credit card (PTPTN best not included in this) is definitely a plus. The Central Credit Reference Information System (CCRIS) is a system created by Bank Negara Malaysia’s (BNM) Credit Bureau to provide standardised credit reports on a potential borrower

This is important especially in cases where the Developer may require a CCRIS check before accepting the booking, or to secure a housing loan. Self Employed have little to no chance of applying for My First Home Scheme. Yes you need to prepare the 10% downpayment!

My First Home Scheme

There are several criteria that applicants must meet to be eligible for the My First Home Scheme:

• Must be a first-time buyer
• Must be a Malaysian citizen
• Available for salaried worker or self-employed individuals
• Allows single or joint applicants
• Joint applicants must be immediate family members
• Gross monthly income:
  • Up to RM5,000 – Single/joint applicant(s)
  • More than RM5,000 and not more than RM10,000 – Joint applicants (subject to maximum gross monthly income of RM5,000 per applicant)
• No record of impaired financing (i.e. failure to repay loans) within the past 12 months

(This is is also subject to Bank approval, if your salary is above RM 5,000 please advise to inform your real estate agent for his advise (only experience agents qualify to advise) in order to secure 110% loan amount)

By failing to prepare, you are preparing to fail.

Benjamin Franklin

Covid-19 Stimulus Incorporation Package at RM2,599 (Worth RM6,200).

The economy has slowed down after the pandemic, and to revitalise the economy, our government has come out with a policy to encourage incorporation. New incorporation now gets to enjoy RM20,000 tax rebate annually for a consecutive of 3 years. And, to support the plan, Cheng & Co has designed a package particularly for those who have been thinking to establish a private limited company (Sdn. Bhd.).

The first 200 clients get to enjoy more than 50% discount off of services worth RM6,200 at RM2,599. Our incorporation package aims more than just setting up a company for our client, but we try to provide services that go extra miles for our client:-

1. Incorporation
2. 12 months retainer fee
3. Free 2 bank account opening resolution within 3 months
4. Domain and email package
5. Jobsocieties posting
6. Free 1 to 3 months trial of selected cloud accounting software
7. Free 1 to 2 months trial of selected cloud payroll software
8. Free update of the latest tax and statutory development by WhatsApp and email

Please find attached herewith our quotation and checklist for incorporation of a Malaysian company for your perusal. If our quotation is in favour to you, kindly complete Appendix I and return a copy to us together with the passport copy of the director(s) and shareholder(s). If the shareholder is a body corporate, kindly provide its certificate of incorporation and the details of the corporate representative.

Requirement of Incorporation

Director – At least one (1) director who is ordinary reside in Malaysia by having principal place of residence

Shareholder – At least one (1) shareholder, can be individual or company. (can be 100% owned by foreigner)

Paid up Capital – minimum RM1.00

Procedure

a) Name reservation (1 – 2 working days)

b) Once name search approved, we will prepare the incorporation documents for your arrangement on director and shareholder signature.

c) Once signed, please scan us a copy of the signed documents together with the payment via email and we will proceed to the incorporation. The original copies  shall return to us later. 

Should you require any clarifications, please do not hesitate to contact Pearly (Person in Charge)

Indah Secretarial (KL) Sdn. Bhd.

18-2, Jalan 2/114,

Kuchai Business Centre,

Off Jalan Klang Lama,

58200 Kuala Lumpur.

Tel : 03-7984 2018 / DID: 03-7985 9897

Fax: 03-7984 9872