Background
“I bought a property in 2018 for RM208K. Now, it’s worth RM288K. Should I sell it and invest the money elsewhere, or keep it for the long term?”
If you’ve ever asked yourself this question, you’re not alone. Many property owners face this dilemma. Let’s break it down in simple terms so you can make an informed decision.
Part 1: Understanding Your Current Investment
1. How Much Did You Really Invest?
- Purchase Price: RM208K (after discount from RM238K)
- Loan: 85% (RM176,800)
- Your Cash Spent:
- Downpayment: ~RM10K
- Renovation: RM12K
- Total Cash Invested = RM22K
2. What’s the Property Worth Now?
- Current Market Value: RM288K
- Loan Left to Pay: RM176K
- If You Sell Now:
- Sale Proceeds: RM288K
- After Paying Bank: RM288K – RM176K = RM112K
- Minus Agent Fees & Taxes: ~RM24K
- Final Cash in Hand: ~RM87,600
3. Your Profit So Far
- Total Cash Invested: RM22K
- Net Profit (RM87,600 – RM22K): RM65,600
- Return on Investment (ROI): ~298% (not bad!)
Part 2: What If You Keep the Property?
1. Future Appreciation (Price Growth)
- Past Growth Rate: ~4.76% per year (since 2018).
- If It Grows at Same Rate:
- In 5 years, your RM288K property could be worth ~RM363K.
- Profit: RM363K – RM176K (loan) = RM187K (before costs).
2. Rental Income Potential
- If You Rent It Out:
- Expected rent: RM1,200/month (RM14,400/year).
- Gross Rental Yield: ~6.9% (RM14,400 ÷ RM208K).
- Net Yield (after costs): ~5%.
✅ Pros of Keeping:
- Passive income from rent.
- Potential long-term price increase.
❌ Cons of Keeping:
- Maintenance & tenant issues.
- Property may not always appreciate.
Part 3: What If You Sell & Invest Elsewhere?
Option 1: Stock Market (Higher Risk, Higher Reward)
- Expected Return: ~8% per year (historical average).
- RM87,600 After 5 Years: ~RM128,700.
- Pros: Higher growth potential.
- Cons: Market can crash (higher risk).
Option 2: REITs (Stable Passive Income)
- Expected Return: ~6% growth + ~4% dividends.
- RM87,600 After 5 Years: ~RM120,500 + passive income.
- Pros: Less risky than stocks, steady cash flow.
- Cons: Slower growth than stocks.
Option 3: Fixed Deposits (Safe but Low Returns)
- Expected Return: ~4% per year.
- RM87,600 After 5 Years: ~RM106,600.
- Pros: No risk.
- Cons: Barely beats inflation.
Part 4: Which Option is Better?
| Factor | Keep Property | Sell & Invest (Stocks/REITs) |
|---|---|---|
| Potential Profit | RM187K (in 5 yrs) | RM128K–RM140K (stocks/REITs) |
| Passive Income | RM1,200/month (rent) | RM3K–RM5K/year (dividends) |
| Risk Level | Medium (market dependent) | Medium-High (market risk) |
| Effort Required | High (maintenance) | Low (passive investing) |
When Should You Sell?
✔ If you need cash now or want less hassle.
✔ If you believe other investments (stocks/REITs) will give better returns.
When Should You Keep?
✔ If rental income covers costs comfortably.
✔ If you expect property prices to rise faster (e.g., new developments nearby).
Final Thoughts
There’s no “perfect” answer—it depends on your financial goals, risk tolerance, and effort level.
- Want stability & passive income? → Keep the property.
- Want higher growth & less hassle? → Sell and invest in stocks/REITs.
“Would you sell a property that gave you 298% returns? Or hold for more? Share your thoughts below!”
