I am monitoring this end lot unit at Jasmine, Denai Alam because it is located nearby my own unit. I know that the unit was first advertised for sale in June 2023 at RM750k.
After nearly one year, May 2024 the unit asking price is dropped to RM725k.
The unit size:
– 35×70 sq ft Land area
– 1980 sq ft Build Up
I wonder what is the best price to buy this property and get reasonable rental return.
So to do that I’ll do some analysis on:
1) Location Desirability
2) The Unit Furnishing
3) How Much To Renovate
3) Competitors Comparison For Sale
4) Rental Demand
Location Desirability
The end lot unit is located at 159, Jalan Elektron U16/93, Denai Alam, 40160 Shah Alam, Selangor.
It is nearby to major shop lots in Denai Alam where it has Speedmart, Family Mart, Bank Islam, restaurants and fast food like Mcdonalds & Marrybrown.
The Unit Furnishing
The unit has basic furnishing but doesn’t below important furnishing to make it easily rented out.
Currently, it has furnishing of:
- aircond at master bedroom
- newly paint unit
But, the unit doesn’t have below furnishing
- Kitchen Cabinet
- Autogate
- Mirror at toilets
- Water heater
- Water pump
- Readily available aircond point
- Shelves at the store
Estimated Cost To Renovate
For me, if I own the unit, I will do these below at least to ensure I can get fast tenant.
- Autogate – RM1,600
- water heater – 3 units – RM1,200
- Aircond points x3 units & other wiring (water pump, autogate, water heater) – RM5,000
- Kitchen cabinet – RM10,000
- Kitchen hood & hob – RM1,000
- Water pump – RM1,500
- Shelves at store – 2 units – RM600
- Mirrors at toilet & other accessories- 3 units – RM500
- Change the gate from vertical panel to horizontal and put aluminium panel – RM2,000 (haha I know this is not that critical but I would do it to ensure privacy and multi purpose where can use the gate to dry your clothes. I did this for my Denai Alam unit)
- Extended at the back with awning, washing machine power points and clothes hanger – RM6,000
- Unforeseen repair – RM5,000
Total Cost: RM32,400
Competitors Comparisons
The Unit Price if Add the Renovation Cost
Asking Price: RM725,000
Renovation Cost: RM40,000 (I rounded up because the cost is just estiomation so better round it up to reduce risks)
Total Price with Renovation: RM765,000
Price per sqft = RM312 per sqft (RM765,000/2450)
Transacted Price
The transacted price is RM247 per sqft based on 31/07/2023 data.
Asking Price For Sale
I compared 2 properties at Denai Alam but not in Jasmine that both have kitchen cabinet & seems have extended the houses.
Property: Denai Alam Dillenia – Intermediate
Asking Price: RM800,000
Land size:22×80 sqft
Price per sqft: RM454 per sqft
Property: Denai Alam Nerida – Intermediate
Asking Price: RM850,000
Land size: 22×90 sqft
Price per sqft: RM429 per sqft
Asking Price Analysis
If I compared vs Jasmine unit I bought last year, it seems the end unit is cheaper by 21%.
So meaning the asking price is reasonable?
Rental Demand
Estimated monthly loan installment for asking price of RM725,000 with 30 year tenure and 4.4% is RM3,267.
Rental around that area to get fast tenant with the given furnishing and the end lot unit size, I would conservatively estimate at only RM2,000 per month.
So there is a big difference of RM1,267 to cover the loan installment.
From mudah.my, rental asking price is around RM2,500 but most of them are fully furnished.
Conclusion
If I compared vs Jasmine unit I bought last year, it seems the end unit is cheaper by 21% but it is expensive by 21% vs the transacted property unit at Jasmine last year 31/07/2023.
Of course the renovation is just rough estimation but it gives good indicator on whether the unit asking price is reasonable vs unit I bought last year and vs other units in Denai Alam.
If I got money, I would consider buying it after do physical inspection and wait to price to reduce more because I am jealous with the low transacted price of 31/07/2023 but financially in order to cover its loan installment as the rental is not that high.
Disclaimer: This is my desktop study only, I haven’t visit physically the unit itself.
