My household studies objectives:
- Potential market size of targeted tenants.
- Estimate monthly rental value of targeted tenants.
- Derive properties price suitable for the targeted tenants.
To achieve the studies objectives, I need to have facts on
- Number of households in Malaysia and specifically for Selangor as I invests mostly in Selangor.
- Estimated income level of each household
Malaysia Income Level
Malaysia households are categorized into three major income groups.
- B40 – or bottom 40% with median income of RM3,000 (Y2016)
- M40 – or middle 40% with median income of RM6,275 (Y2016)
- T20 – or top 20% with median income of RM13,148 (Y2016)
Number of Household In Malaysia
In 2010, number of household is around 6.35 millions. Lets say I estimate by 2018 the number of household is around 10 millions.
In 2016, 19.9% Malaysian population resides in Selangor. Hence number of households in Selangor is 10 millions x 19.9% = 1.99 millions.
Rental Affordability for Each Household Group & Targeted Property Price
- All household group only willing to spend one third of their income for rental.
- Property price is estimated based on monthly loan equal to monthly rental affordability and calculated based on 4.5% interest, for 30 years tenure and with 10% deposit.
|No||Household Group||Median Income (RM)||Malaysia Total Number||Selangor Total Number||Rental Affordabilty (RM)||Property Price (RM)|
- I target mostly to B40 household group. Hence, I need to purchase properties within RM220,000 range.
- I don’t target M40 or T20 as they can afford to buy they own house, hence vacancy rate will be higher than targeting B40.