Property Types In Malaysia
Malaysia offers 3 major types of properties: residential properties, commercial properties, and vacant land. Distinguishing the types of properties in Malaysia is important in order for proprietors to maximize the returns of the property.
Residential property wraps up a whole area of property types including condominiums, residential houses, serviced apartments and apartments. It is solely used for residential purposes, not for business or office purposes. Let us further analyze the numerous types of residential properties that exist.
1. Residential houses
In Malaysia, residential houses are landed properties that include single family detached houses, terrace houses and semi-detached houses. Single family detached houses are usually free-standing residential buildings that offer greater privacy with no common walls. Terrace houses and semi-detached houses are usually several families living in the same structure. It is linked up however separated by fences or walls. Such category of property comes in variety of levels such as one-, two- or three- stories. Most people, especially families prefer residential houses to other types of homes for its maximized space.
2. Condominiums and Apartments
Apartments are relatively self-contained housing unit in a building that is either high risers or low risers. A condominium comprises of recreational facilities and 24 hours security. Amenities usually include swimming pool, tennis court, gym, convenience store and etc. It consists of different variations of floor plans to cater to individual preferences. Studio apartment, on the other hand, is a self-contained, small apartment, which combines living room, bedroom and kitchenette into a single unit, barring a bathroom. Such units are best suited for single. Condominiums usually fetch higher prices and rentals due to the range of amenities, sizes and exterior/interior designs.
3. Serviced Apartments
A serviced apartment is a type of furnished apartment available for short or long term stay leisure and business travelers which provide amenities for daily use. It is almost comparable to hotels but you can either own or rent a service apartment. Serviced apartments can be less expensive than equivalent hotel rooms. Since the beginning of the boom in cheap international travel and the corresponding increase in the level of sophistication of international travelers, interest in serviced apartments has risen at the expense of the use of hotels for short stays. Service apartments are normally located in commercial districts. It is said that they are not regarded as residential properties hence they are not covered by the Housing Development (Control and Licensing) Act 1996.
A commercial building is a building that is solely for commercial use. Types can include office buildings, warehouses, or retail outlets (i.e. retail stores, shopping malls, etc.) Nowadays, commercial buildings combine functions such as an office on levels 2-10 with retail on level 1. Let us further analyze the numerous types of commercial properties that exist.
1. Retail Stores
A retail store is basically a store that provides services such as a book store, a boutique and so on. Shops may be found on residential streets, shopping streets with few or no houses or in a shopping mall. Retail stores are found in both central business districts and urban areas.
2. Shopping Mall
A shopping mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area – a modern, indoor version of the traditional marketplace. Shopping malls are equipped with elevators and escalators for easy access to every level. A typical shopping mall houses department stores, boutiques, movie theaters, photography studios, food courts and other specialty stores. These are places where you can find anything ranging from daily necessities to luxury items.
3. Office Buildings
The primary purpose of an office building is to provide a workplace and working environment primarily for administrative and managerial workers. The size of the buildings depends on the magnitude of the organization. An office building’s rental income fluctuates with general economic conditions. When the economy is enjoying growth and vitality, there’s increased demand for office space, which results in low vacancy, higher rents, and greater net income. But during economic downtimes, there are more lease cancellations or non-renewals, which in turn lead to more vacancies, ultimately resulting in lower rents and therefore lower income.
There are three main types of land in Malaysia: freehold land, leasehold land and Malay Reserve land.
1. Freehold Land
You can enjoy ownership in perpetuity. Perpetuity means that there is no time limit for the owner and the freehold land lies with the title holder until he transfers it to someone else. The owner of the land owns the land, the building and anything that is on the land. After which the land-owner (which could be the state government or another enterprise) will take legal possession of it. Freehold is more preferable and fetches a higher price.
2. Leasehold Land
Leasehold is a form of property tenure where one party buys the right to occupy land or a building for a given length of time. This type of land also belongs to the government and the least last up to 99 years. At the expiry of the term, the land reverts back to the government. The lesser the number of years left on the lease, the less valuable the land becomes.
3. Malay Reserve Land
Malay Reserve Land is land that cannot be sold to other races, even foreigners except for Malays or Bumiputras. In a conventional sense, it is generally considered that all Malays are Bumiputras and that all Bumiputras are Malay. It is land exclusively meant for Malays and Bumiputras. This type of land posted lower investment return as compared to freehold and leasehold property as it can only be transferred among Malays and Bumiputras and limit its marketing prospects.