Last weekend we went into JB again early in the morning and without the kids. The plan was simple – view Casania and Leisure Farm show house. I had made prior appointment for the first so this would at least be a fruitful trip.
Casania is one of the cluster house development in Taman Sutera Utama. Since going on this property hunt, I have become rather savvy in terms of property terms. In case you are clueless to about the various type of landed property, here’s a quick guide –
- bungalow – one house on one plot of land
- semi-detached – two houses share a plot of land and one wall
- cluster – four houses share a plot of land in a squarish formation, shares two walls
- terraced or linked – several houses on a plot of land, linked together in a straight row, sharing two walls, except for corner lots
So Casania is a cluster and commands a slightly higher value than a linked house in the same area as it has a lower plot ratio. At current value, these houses are priced from RM608K for SW facing units. The one I am eyeing is RM618K as it is NE facing.
I checked with a forummer who owns a house here – when he bought it in 2008, they were selling at RM410K. Prices have risen by close to 50% in 4 years.
A quick calculation of the current capitalisation rate with deflated rental yield as Iskandar development has not fully taken off yet is 4.3%… barely covering my interest on loan.
Here’s how you can calculate the cap rate of your property. You can also use it to calculate the market value of a property using it to determine if you are buying at market or at a premium or discount.
Cap rate = (Annual Rent – Operating Expenses) / Property Price
Assuming an annual rent of RM30,000 less operating expenses of RM3,600 (maintenance, repairs, utilities, tax) divided by RM618,000
Working backwards, since the average cap rate in Malaysia is 6.5%, developer is pricing the property with the expectation that rent would increase to RM43,000 or RM3,600 per month.
So I am buying into this property at a premium at current condition with the expectation of improved rental yield in years to come. Of course with higher rental yields, the property value would also increase.
I admit this isn’t the most lucrative investment but at least it is something I can physically enjoy due to its proximity while getting some returns.
Anyway I guess I was half hoping that the house would be unsuitable so that I can delay decision making further. As it turns out, the house is really beautiful. While the taman is guarded and gated, the individual houses do not have gates. While it might sound like a really unsafe thing, it actually creates a very warm and homely exterior.
It comes with land by the side and front even though it is not a corner unit so there’s some space for me to work on my gardening skills. One of the thing I am going to explore is growing herbs. But then if a garden becomes a chore to maintain, then it can also be carpeted over with grass or pebbles for a zen look.
The build up of the house is 2,450 sq ft. It has 4 bedrooms each with its attached bathroom. Together with a tiny toilet in the kitchen, that makes for five bathrooms. Lots of cleaning required. Alternatively, can just rotate usage. With five toilets to go around, can be a full month before you actually have to clean. Ha ha, just kidding!
I like the exterior and interior finishing that the developer is providing. The show house is the as-is model so we can see what we’re getting. As the toilet will come fully renovated with nice tiling, the only major renovation works that is required is only the kitchen, which I admit is the only con about the house.
The kitchen follows an open concept with no specific partition so will probably work on a bar counter concept. The area allocated for the kitchen is actually quite small but there is an option to extend the house to the external yard to create a bigger kitchen. But that would mean additional renovation costs. If one extends the kitchen below, then can also explore extending the family area or have a balcony at the second level.
The taman is mostly owner occupied with close to 90% Chinese so we would likely feel at home here. Although from an investment POV, I don’t think expatriates would like living in such a local community but that’s the whole point about living overseas isn’t it?
After lunch, we went to take a look at Leisure Farm. Although our minds were already pretty made up about Casania, I wanted to still have a look at LF, as a dream resort home which I cannot afford. You need an appointment to see any of the houses as the show gallery is locked. We were fortunate to find a sales lady to show us around even though we dropped by without an appointment.
She is a very friendly and chatty lady who had worked and lived in Singapore for 12 years but finally decided to move back to Malaysia. Asked if she has a place in LF but she told me she lives in another taman 10 minutes away… I suspect it’s probably Horizon Hills as her hubby is ang moh.
LF surroundings is indeed very peaceful and scenic. Passing through the bungalow plots, it looks almost like Tuscany with beautiful villas built atop rolling hills. But that’s way way out of my budget. And honestly, what am I going to do on a 40,000 sq ft of land?! LF specialises in selling land and thus far has only four built up projects – The Courtyard, Pinggiran Bayou, Bayou Water Village and the current launch Bayou Creek.
The only place that is within my budget is Pinggiran Bayou built way back in 2004. The lady was kind enough to drive us around the place while introducing to us all the occupants of the homes. We were not able to visit the house itself though as they are currently rented out until March to the Korean Golf Academy students who are escaping winter in their country. Talk about a global community.
The only houses that are available now are the two bedroom terraces with a build up of about 1,600 sq ft going at RM550,000. But monthly maintenance is about RM400 whether you use it or not. This is to pay for the guards, the upkeep of the clubhouse and swimming pool. The house comes fully furnished so one only need to buy movable furniture shift in. There are no gates as well, no additional land for gardening and they are built quite close to one another.
So in terms of the house itself, Casania is a sure win. In terms of location, it is really about what you want. Casania is a Chinese owner occupied community that is near to many amenities. LF is a global expatriate community that is currently far from amenities in order to give it the back to nature resort feel. However it is just next to Medini, which is slated to be the future CBD of JB so growth prospect is there.
But remembering the forummer who started his Living in JB thread, buy first to stay, then to invest. So Casania is the type of place you would stay while LF would be more for investment. It is quite counter intuitive though because I am buying this property as an investment… but it boils down to who you intend to rent it out to I guess.
I am now in the deliberation phase where I am waiting for a ‘GO’ sign from God. This is a huge investment and more than money matters, it will affect the family lifestyle as well. Before I go down this path, I need to be sure that God is pleased with this decision too.