Answer: A person (Age 35 & below) with net Salary of RM 2500 without any debt or credit card usage who pay a monthly housing loan of RM 1400 (average RUMAWIP monthly payment) DSR is at 60% within the DSR requirement of My First Home Scheme (110% financing mount). However it is still subject to approval.
First of all this is not an article to encourage or discourage you to buy a RUMAWIP now known as Residensi Wilayah Keluarga Malaysia. This is written for the purpose to help FIRST TIME home buyer to make a sound decision on whether to go ahead or not to buy an unit of Residensi Wilayah Keluarga Malaysia (RWKM). The most common question Malaysians ask is “What is the minimum salary to buy a RUMAWIP?”, that is a innacurate question to ask. The right question is “What is the acceptable debt secure ratio (DSR) to buy a RUMAWIP?”
Debt Service Ratio (DSR) & My First Home Scheme
Most buyer of (RUMAWIP/RWKM) is taking up My First Home Scheme which is a 110% financing from the bank for first time house buyer . For eg. En Saiful age 35 earns a nett income of RM 2,500 and decided to buy a RM 300,000 (RWKM). His debt service ratio based on 3.6% interest rate for a 35 years loan is 55% (rough figure RM 1162.94 monthly without including MRTA/MLTA financing). The chances of approval for the housing loan is high as max DSR is allow to be 50% (normally). If En Saiful would have go ahead and take up the loan, after vacant possession his loan payment will be RM1257 or more which left him with RM 1243 to spend (if he doesn’t earn more by then). The average cost for maintenance fee is RM 0.25 per square feet x 800 sqft (smallest RUMAWIP / RWKM) will be RM 200. Now En Saiful is left with RM 1043 for electricity bill, water bill, transportation cost & food cost. In this scenario, En Saiful is signing a death contract if he proceed to buy a (RUMAWIP / RWKM). One should ask “Should I buy a RUMAWIP? before asking “What is the debt secure ratio (DSR) to buy a RUMAWIP?”.
Mortgage Payment & Renting Out Rooms
Now we have to understand that it is legal to rent out the RUMAWIP / Residensi Wilayah Keluarga Malaysia to Malaysians even if it is within the 10 years after S&P is stamped. If En Saiful is single, he can choose rent out the two room to cover for some mortgage payment! If buyer is a female, let’s call her Ms Lim earning the same salary as En Saiful. Can she rent out the two room to cover for some mortgage payment? Yes she can! But it is much harder to execute than to say as all RUMAWIP have one allocated parking lot (unless buyer purchase extra parking lot which is subject to availability & payment is by own reserve cash or from EPF AC 2), the two housemate must either use public transport or ride a motorbike which is most likely a male. Ms Lim will not likely opt to stay with the opposite sex as house mate. So this idea to buy and share the house favours Male as it’s harder to get the right housemate for female RUMAWIP owner. Not to mention about race & location that truly matters. Say En Saiful bought a RUMAWIP in Cheras and opt to rent out the rooms, he wouldn’t want a non muslim as house mate as it is really difficult to share the kitchen with a non muslim which we can conclude it is harder as we know Cheras is a Chinese majority area. But if he buy one RUMAWIP in Bangsar South, it is probably a better option for En Saiful.
RUMAWIP as Investment : Gender & Rental Market
This chapter we explore on buying to rent out as backup plan as I personally do not believe in property investment in 2022. The common selling point is mortgage payment plus maintenance fee is RM 1400-1500 which can be cover by rental income. True? Yes and No! It depends on the location, please do your own research! (DON’T FORGET YOU NEED TO RENOVATE THE UNIT)
Family With Single Car Ownership / Dating Couples (unless you manage to buy an additional parking lot, bravo!)
- It’s not an easy task to rent out a house to a family in Malaysia with one parking lot. You need to research on the other option of parking space for your tenant if you don’t own an additional parking space. As for those RUMAWIP owner who did purchase an additional parking space, you have a major advantage to rent out your unit (provided your RUMAWIP’S location is in demand) & most RUMAWIP owner have only one parking lot. After vacant possession (you need to do renovation, all RUMAWIP is a bare unit). Another thing to consider is if you are of a certain religion and your tenant share the same faith as you do, which forbid “fornication” and is threaten by authorities; will they rent the unit from you if they are in BGR (boy girl relationship)?
Single Male Tenant
- The chances of three male and only one person have a car & the other two person are riding a motorbike or relying on public transportation is rare. Let’s say you have two parking space, there is still lacking one more parking lot for the tenants. I don’t know am if this is a fact, based on my observation people who drives hangs out with people who drives and bikers hangs out with bikers. If this is the case, it is to your best interest to market as room rentals (MALAYSIAN ONLY). iBilik is where you do your research on your room rental rates on this 😉 Please take note that many single people do rent the whole unit to themselves and with the RUMAWIP rentals, it directly competes with higher end studio apartment. The advantage is always the size and the standardised RUMAWIP specs; 3 bedroom 2 bathroom! Project from SkyWorld Awani’s Series no doubt are able to compete with the Bangsar South Studios facilities, built quality & rental price too! (high end project have better lift though)
Single Female Tenant
- On this market segments, we can conclude there is less female motorcyclist compared to male. If your RUMAWIP unit is NOT near public transportation, getting tenants from this segments is going to be a harder. We are aiming for individual to rent the whole place for this unless the RUMAWIP is walking distance to the LRT like the Taman Melati RUMAWIP , which probably easier (do your own research please) to market as room rentals.
Now that it is clear that buying a RUMAWIP is no simple matter, the most important question one must ask is “Should you buy a RUMAWIP?” There is no simple answer to this, you have to take in consideration your income, job stability, personal needs, location preference (you don’t always get to choose your favourite location, for example: Bukit Lanjan’s Residensi Armani is of Malay Reserve Land & it sold out within a few days) Now we move to the next question “Why Not Rent First?” Many have answered me this that it’s better to pay for your own house’s mortgage compared to paying rental! Think again! Calculate again! Evaluate again! It maybe true for some people but definitely not for everyone! Did you come across RUMAWIP completed just a few years ago available in iProperty through auction?
It is true that some fail to pay their housing loan for RUMAWIP! But the on other side of the coin is owning a RUMAWIP is truly affordable to most people. Malaysia that is full of jobs like food deliveries & Grab driver can easily service their RUMAWIP’s mortage payment unless that individual is heavily in debt (in case one lost his or her income, as deliveries/ P2P driver usually won’t be able to secure the housing loan if apply individually). Most RUMAWIP is at RM 300,000 and offer full fledge condo facilties (save money from joining gym or etc). It’s really a VALUE DEAL if it is for own stay! There is RUMAWIP that is of cheaper price like RM 230,000, I humbly suggest don’t go for it. It is usually full of building defects.
The conclusion of the matter is this! YOU MUST DO YOUR OWN RESEARCH! Buying a RUMAWIP Value Deal may or may not be THE RIGHT CHOICE FOR YOU! Your own holding power matters, location matters, your interior design matters, your purpose of purchase matters, your backup plan matters & the amount of your parking lot you have truly matters LOL! So I hope all of you will ask the right question before buying a RUMAWIP from me! It’s not the question on How Much is the Minimum Salary to buy a RUMAWIP? but you should ask Should you buy a RUMAWIP (now known as Residensi Wilayah Keluarga Malaysia)?
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