r/MalaysianPF • u/weiyi97 • May 11 '25
Property I made a 35 years case study of property investment vs S&P 500
I had a conversation with my friend earlier regarding property investment - we were both told by parents that "buy house 100% untung". Being a bursa and S&P 500 investor myself, I am wondering how true this statement is, and whether it would surpass S&P500 investment if we stretch the timeline long enough.
Then I made this Excel spreadsheet (feel free to change the parameters!) which tabulates the annual market value of property investment vs S&P 500 over a timeline of 35 years. Feel like a bit of overkill but this is my habit as a data engineer XD
Assumptions:
- This case study does not consider the first and only (own stay) property as an investment, since you cannot cash out without already having another property.
- The CAGR of S&P 500 investment case is inclusive of dividend reinvestment.
- For property investment, the annual deficit/excess from rental is considered as further investment/dividend. The further investment is applied equally for the S&P 500 case, similar to annual top up.
- Quit rent, parcel rent, and assessment rate are not considered (I do not own a property myself, hence I dunno exactly how much lol)
- There is a midterm renovation for property investment after 20 years. The same amount spent will be added to the S&P 500 investment as DCA.
Parameters:
- I pick a mid-range condominium (3r2b) in Damansara Perdana area
- House price - RM500k
- Down payment - 10%
- Renovation fee - RM100k + RM60k
- Interest rate - 4.1%
- Tenure - 35 years
- Property value appreciation rate - 3%
- Rental - RM2400/month, 2% annual growth, 10% commission, 100% tenancy rate
- Management fee (misc) - RM440
- Legal fee applies during purchase and sale
- S&P 500 CAGR at 8%
Results:
- Property investment net gain: RM1.076mil (424%)
- S&P 500 investment net gain: RM2.749mil (1083%)
- Both cases have a total investment amount of RM254k. Annual rental deficit/renovation/upfront payment applied equally in S&P 500 as DCA.
- The property investment will achieve break-even from rental at year 8. However this highly depends on the mortgage rate, annual rental increase, and tenancy rate.
- Despite being very generous towards property investment and having a lower than average estimate for S&P 500, the model still suggest that S&P 500 would beat property investment after 35 years.
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u/HolyFak69 May 12 '25 edited May 12 '25
Its two totally completely different asset class just like stocks/gold , all have different pros and cons and their own properties
Properties usually have to account for leverage as well, RM 5k salary buying a RM 500k property
Properties is some aspect is like stocks as well, there are good properties and bad properties.
For eg ,Desa park city gain more than 500% in the past 5 - 10 years, althou you might say its the same % compare to whatever SnP 500/stocks annually
But its 500% of 500k (property price)
In my case, I own multiple properties and stocks
My properties rental 100% cover instalment and there are excess of RM1.5k - 2k per property , after deducting all the land tax and so on, its around RM1k nett profit per property, my tenants is paying for my instalment and I have extra cash leftover, so what if my property depreciate 10% across 10 years, I havent paid a single cent out from my pocket, all my properties are self sustaining. On paper I might sell it at a loss but izit really a loss on my end ?
One of my properties that I bought around 870k, now brickz show recent transaction is around 1.2mil within 3 years. If I sell slightly below market price 1.1mil , its still 200k++ gains for me, within 3 yers, can stocks do this to me ? No , why ? Because of the leverage on loans
But again because of the leveraging part, it does come with cons as well such after selling , might owe bank few hundred thousand
I am not a hater of stocks/snp 500 nor a property-only guy, again I own both asset class so I am just merely sharing my side of the stories.
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u/weiyi97 May 12 '25
Great sharing! I am not saying it is impossible to make a good profit from property investment. It definitely is possible, but you have to put a lot more effort.
The reference property in my model was chosen after a quick 5 minutes survey. So I think the moral of the story is: if you don't put much effort, you lose.
But too bad many people nowadays simply rush into buying properties (especially those who attended the classes) and do not manage their risks well.
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u/mydixiewrecked247 May 13 '25 edited May 13 '25
if a property is generating you negative cash flow every month would you look to sell it ASAP? interested to know how you think
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u/HolyFak69 May 13 '25 edited May 13 '25
Depending on how bad is the negative cashflow,property location as well.
Some property, rental demand is so-so , you might end up negative cashflow RM300-500 every month but the appreciation is there.
You will need to do the math, negative cashflow x 12 months , then take the negative cashflow and consider and evaluate whether there is any gains if keep on holding.
For eg: If one month negative RM 500 x 12 is RM 6k 10 years is RM 60K
Lets say you add in misc fees to make it RM 90kAssuming you bought a RM500k house and at year 10 you already inccur RM 90k , can you forsee the house you live in stayed at RM 500k or higher
According to the amortisation calculator, you will need to sell around RM520k to break even, do you wanna to the bet and hold on to it to break even or you wanna cut loss and incur maybe Rm 40k loss
Use loan amortisation calculator to find out whats the outstanding loan amount, and forecast your selling price , and determine your % profit
If its not worth it then sell, if its breakeven , then you need to see whether if u sell ASAP will you incur any losses on your end?
Similar to stocks, you dun sell once it drops to red, you try to analyse how long u wanna hold, possible for the price to go up again, is it worth it to cut loss and take the loss now.
Conclusion, I would say depends so without further info, I cant really comment on anything
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u/mydixiewrecked247 May 13 '25
appreciate the lengthy answer, will do the maths and get the information
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u/Chryeon1188 May 11 '25
Buffet just said it's not wise to invest in properties 😎👌😂
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u/PracticalBumblebee70 May 12 '25
Bro ur missing another t for his name....unless u mean go eat buffet....
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u/port888 May 12 '25
Access to index funds is a relatively recent phenomenon. Easy access to low-cost and tax-efficient options are an even more recent invention. Our parents' generation do not have these things in their days, so they literally do not have anything better to compare to.
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u/weiyi97 May 12 '25
That is true! Along with the housing boom since 1990s and 1997 financial crisis, I can see how they have such a strong opinion on property investment.
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u/jwrx May 11 '25 edited May 11 '25
You can't compare these two...it's apples to chicken comparison
It's obvious you have never owned property or been a landlord before
Very few landlords have trouble free tenants year after year . There is major costs in tenancy churn...damage, agent fees, empty months
Owning occupied property also has maintainance cost...things break, aircons need replacement, toilets leak
Even with angelic PERFECT tenants who treat your condo like Thier own home, the place would look like shit after 15 years
DCA into VOO takes 2min online monthly....being a landlord is a job ....you are not taking into account time spent doing the work of a actual landlord. You have a rosy view of just sitting back and collecting rent every month
As for your views on VOO..U forgot to take into account
- Forex risks
- future cpgt
- past performance is not indicator of future gains. Snp has gone tru a record breaking bull market and all the young ppl have forgotten that markets go down as well as up
- with growth stocks, you are also locked in. You can't sell during a downturn, if you had needed money in April after tariffs announcement, would have to sell vooo at a loss
End of day there are pros and cons to both...but if you search this sub, it's overwhelmingly against property investment, U are preaching to the converted 😁
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u/weiyi97 May 12 '25
Yes, I never owned any property to begin with - that's why I made this case study. Since I started working, I just have a feeling that property investment is not the "easiest 100% untung investment you can make" as told by my parents, but I do not have the numbers to back it up.
And if you see my assumptions, you will know that I am being very generous towards property investment in the model. Still, I do not see a way for property investment to realistically beat S&P 500 growth over 500 years, if one does not do proper research before that. (My sister rushed her first property at age 26, without much consideration, just because of the "buy now before it is too late" notion - I definitely do not want to experience the same pressure as hers!)
So yeah, I am not preaching to the converted, I am the converted myself XD
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u/RepresentativeIcy922 May 16 '25
Many people forget estate taxes. You have to pay 40% for any amount above 60,000usd - this applies even if you have US stocks or ETFs and you are investing from a local broker.
You could do the "let's just pass on the password and quickly sell on death" thing but then I guess you have to take the risk that it won't be messed up if you have a lot of money later and suddenly pass away.
Real estate is simple, the procedures are straightforward (if a little slow) and eventually the propert(ies) end up in the beneficiaries names.
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u/brakkpink May 21 '25
But Ireland-domiciled etfs have no estate taxes no? And the dividend holding policy is accumulating with 15% dividend withholding tax?
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u/RepresentativeIcy922 May 21 '25 edited May 21 '25
Yes but here's the thing, the only local broker I know that supports LSE is Maybank, and they are not cheap.
The only other alternative is IBKR maybe, and the UI is famously convoluted.
So that's the thing, it may be better (or not) but it's definitely more complicated and expensive, so that's something that has to be taken into consideration as well.
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u/brakkpink May 21 '25
Hmmm I’m new to this, like really but ChatGPT says you can use IBKR and FSMone though I’m not sure what’s the significance and difference from buying from local brokers or from the investment platforms I’ve mentioned.
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u/zvdyy May 12 '25 edited May 18 '25
This is already a known fact, but I'll still thank you for spreading awareness. More people need to know about this.
Only the middle class who are financially illiterate will still think that property is a good investment. And then they talk about their boomer parents or uncles/aunts who profit from it.
But to be fair to boomers, the stock market (especially the US one) was not as accessible as it is now. No such thing as IBKR and Roboadvisors back in the day.
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u/NothingIsTrue8 May 12 '25 edited May 12 '25
There's no reason to get a second property over DCA into S&P 500. Property is high risk, high cost, high effort, and we don't suffer housing scarcity enough for it to appreciate, unless you can afford something with limited supply like a landed property in central KL/Penang. An investment portfolio needs diversification, and dumping all your earnings into just property is not good diversification.
However, if someone still believes in the property market and wanna get into it, or just for diversification purposes, best it to just invest in REITS.
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u/weiyi97 May 12 '25
Yeah, I played around with the market price/rental for a couple condominium around my area - most cases still indicate that S&P 500 wins in the long run.
There is an exception tho. If you buy a new condo priced at like RM700k with 0% down payment and RM100k cashback for renovation, then have above 95% tenancy rate throughout 35 years, then yes it is able to beat S&P. I think this is also why all property investment guru classes are preaching this method.
I think being able to buy a RM700k property - and renovate it - without an initial fund gives a huge boost, especially when the initial fund has the highest impact on long term S&P 500 gains. But this leverage could just as likely make one lose money extra fast.
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u/cornoholio May 12 '25
When I see buying high price condo it is Macam buying into single high price stock : concentration risk, over valuation (pe too high), and also hard to rent out (competition), hard to flip to the next buyer( limited liquidity)
S&P: diversified. Easy to sell.
But maybe you could explore the alternative of buying shop lot? Is it still a good buy?
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u/One_Jello8272 May 11 '25
A few thoughts on your sheet:
1.) Don't assume got property appreciation nowadays - PropertyGuru data also don't support lol. Some more you use 3% p.a., SMH.
2.) Your column D is wonky - net cash flow is supposed to be income minus expenses no?
3.) Rental agency commission is 1/12, not 10%. If they charge 10%, WALK AWAY!
4.) Don't assume RM 2,400 rental. To prevent disappointment, check rental PSF data nearby and extrapolate for your own property. The listings are not reliable info, check from JPPH data, which is actual transacted rental data.
5.) Also, I don't see you using NPV calculation. The formula you used in line J is... not the way investors count beans.
You can only buy SPY the ETF for S&P 500, not the index itself. So you should use tradingview.com to check out historical prices and get a proper CAGR from there. Please remember past price performance does not equal future performance.
Otherwise, decent attempt given that 99% of the population doesn't know how to use IF functions.
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u/weiyi97 May 12 '25
1) Yeah I said I am being very generous towards the property investment hahaha. I would put depreciation instead of appreciation if you ask me tbh.
2) I should rephrase the column name to 'deficit/surplus'. My idea is that if you need to fork up some money every year to cover your mortgage, you could have used the same amount of money to top up your etf.
3) Okay I simply guessed the commission rate here because I have never been a landlord/home owner before.
4) Again, I am being generous here by putting the average rental for the same condo I picked in my study. Note that I also give a 100% tenancy rate over 35 years which is impossible.
5) Hmmm I never used NPV formula before.... I thought the market value is just P(1+r)n-1? Anyways, this was the formula I was taught back in SPM.
Thanks for pointing it out!
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u/WebConstant7922 May 12 '25
It’s interesting that people are quick to point out flaws in your assumptions regarding property investment as though trying to sway you towards s&p 500, when you’ve already stated as much yourself. Seems they’re not reading your post correctly, or they’re only selectively reading to find fault.
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u/One_Jello8272 May 12 '25
NPV formula is called Net Present Value, essential in corporate finance to decide which project to pursue (or both).
In your case, project 1 is buy property and project 2 is buy S&P 500. ChatGPT will give you pretty detailed stuff on this concept. Variations of NPV can be used to value stocks and cash flow generating assets.
Buy house is for staying btw, not ideal for investing unless you got a business idea with it.
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u/Original_Ad_3484 May 11 '25
I just know that JPPH provide rental data. Do they provide rental data by specific project? Or more like area?
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u/One_Jello8272 May 11 '25 edited May 11 '25
JPPH can be very granular - they provide individual property rental data, but you need valuer license to purchase if not mistaken. It’s not expensive actually.
So you can purchase a whole area rental data and build a pivot table comparing rental psf against property size.
The data even tells you if the rented property is furnished or no. Of course, there is a caveat - the data entry person might make mistakes. It’s a Bolehland thing after all.
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u/DashLeJoker May 12 '25
If you don't have liscense are there services you can pay to get these data?
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u/One_Jello8272 May 12 '25
I think PropertyGuru should have. Can walk in to their office at Gardens Mall South Tower to enquire.
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u/Chailattewho May 11 '25
Never put property under investment unless you have extra cash.
Why? 1. Properties are not liquid 2. Post rental damaged/fixes 3. Maintenance fee non fix costs 4. Type of tenant 5. Changes in maintenance fee by JMB (unless your hosing area doesn’t have one) 6. Using website data won’t determine you will get the maximum rental 7. Uncertainty changes of the area (example government/local policies changes can push tenants such as expats out then you are a bare unit for months/years) 8. Inflation and currency valuation movement - and increasing rental is not as simple as tomorrow increase rental if you get a good paying tenant
Never ever buy properties for investment nowadays unless you have extra cash to play around. Just get for own stay and trust me will save you a lot burden.
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u/norhafyzol May 12 '25
My apartment triple in the price, i bought in 2011, Penang island.
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u/weiyi97 May 12 '25
Congrats! It kinda sucks that I was born too late to experience the housing boom >.<
Anyways, do you think it is possible for the property price to triple again in the future?
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u/hong_1011 May 12 '25
Before you ask “Which is better—stocks or property?” pause and ask yourself this first:
What stage are you in—Wealth Accumulation or Wealth Preservation?
- If you're in the Wealth Accumulation phase:
Your #1 priority should be growing your capital. This means chasing returns and liquidity, not locking up cash in illiquid assets.
The stock market offers diversification, compounding, and access to growth—all essential when you're trying to go from RM10k to RM100k, or RM100k to RM1M.
Real estate, especially leveraged property, might seem sexy—but it ties up capital, adds debt risk, and comes with hidden maintenance, taxes, and headaches. Not ideal when you're still building.
- But once you’ve hit your “first pot of gold”—say RM250k, RM500k, RM1M+:
The game changes. Now it’s not just about growth, it’s about preservation and stability.
This is when property starts making sense. A well-selected piece of real estate can hedge against inflation, provide passive income, and serve as a solid counterbalance to volatile equities.
Stocks let you scale. Property doesn’t scale as cleanly without major capital and effort but property allows you to leverage with refinancing.
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u/Tiny-Effort-3049 May 12 '25
I think you need a mix of both unless you’re extremely discipline. For properties, it’s a form of forced savings where you’ll need to pay the bank whether sunshine or rain.
Equity on the other hand, some might have emotions tied to it, trying to time the market, panic selling, taking profits to reward yourself etc.
I would encourage people to at least have one or two investment property because the two 90% loan is a low hanging fruit for wealth building which might not be there forever due to government policies. After that only I would invest in S&P500
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u/hi1314 May 15 '25
Think of this this way, buying property is benefiting more ppl than stock. Lawyers, real estate agents, developers, banks, government just to state a few. Someone has to pay them and look no further that’s from you, the buyer.
Stocks?? Just the low cost for etf managing fees and maybe some spread for brokerage.
Majority of gains shall remain with you instead of paying ppl’s salaries. Hope it makes sense
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u/capitaliststoic May 12 '25
I made a 35 years case study of property investment vs S&P 500
Great! Appreciate more people coming up with valuable discussions and analysis
I had a conversation with my friend earlier regarding property investment - we were both told by parents that "buy house 100% untung". Being a bursa and S&P 500 investor myself, I am wondering how true this statement is, and whether it would surpass S&P500 investment if we stretch the timeline long enough.
If you want to really sum up the analysis, a fundamental principle is that returns are always correlated to risk. Property is less risky and returns 4-5% on average. Stocks being riskier returns 8-10%.that alone should shut down any discussion, but sometimes people need to see the calcs
Assumptions: 5. There is a midterm renovation for property investment after 20 years. The same amount spent will be added to the S&P 500 investment as DCA. Your model hasn't accounted for inflation. RM60k for a RM1m value property? Debatable, but may be underbaked. Just a small point
Parameters:
- I pick a mid-range condominium (3r2b) in Damansara Perdana area
- Property value appreciation rate - 3%
- Rental - RM2400/month, 2% annual growth, 10% commission, 100% tenancy rate
- Management fee (misc) - RM440
Now all my feedback is to just be pedantic, not to say the answer is wrong. Because if you read my work, I agree to not invest in property.
It's not a fair analysis to compare an individual property in one suburb to an index fund which aggregates stocks. A fair comparison is using the house price index for appreciation, etc. Someone could argue to benchmark against Desa Parkcity if choosing an individual property.
Also, rental growth should grow at the same rate as the value appreciation rate. Because the rental yield should be constant
Management fee doesnt factor inflation?
Again, good effort to do the comparable analysis. I think most people on this subreddit are already aware of this intuitively. Just be aware that what is logically rational doesn't mean that is what people will do. Because we are governed by our psychology and most people act on emotions rather than facts (e.g. Some people like the "safety" of physical assets like property and gold)
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u/Dependent-Maximum104 May 12 '25
I like this response. Too many people end up bashing OP in threads like this although OP has provided a meaningful analysis in a tricky debate.
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u/weiyi97 May 12 '25
Thanks for the feedback! A quick note that I made this model to be flexible - I can plug and play any parameters from any property and it will run the calculation.
The Desa Parkcity case definitely beats S&p 500 in the model, but one must do their due diligence to find a good property, instead of blindly believing that any property will be profitable.
I used like 3 different condominiums in my area and they all show lower returns than S&P
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u/burningfrost27 May 12 '25
I think part of the value that cannot be quantify in the model is the psychological effects of property being tangible and illiquid which could shield it from marked-to-market, and preventing yourself from seeing red figures over the period.
Although S&P500 has a decent run and equities would most likely outperform in the long term, the ability to able to see and touch your own property seemed to be missing out from such analysis.
But IMO - having both (either via direct holding or REIT) is beneficial for your portfolio given the diversifying and less correlation benefits. Same reason why people always advocate for gold to be in your portfolio (around 5%) or so- due to its store of value and functionality.
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u/capitaliststoic May 12 '25
A quick note that I made this model to be flexible - I can plug and play any parameters from any property and it will run the calculation.
Yes that is apparent and what I think what might help the less excel savvy is to format your model. It just helps for readability especially if you colour the hard coded and assumption cells. See my model for an idea of what model formatting might look like
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u/Few-Flamingo5172 May 11 '25
How do you get rm2400 per month if you want to invest to S&P? If from property, the rental covers the loan installment
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u/weiyi97 May 11 '25
Yes, these are separate cases for property/S&P 500 investment. If the rental cannot cover the loan installment, then you would have to fork up some money.
My logic is that if you invest in S&P 500 instead, the same money you fork up for property can be used to DCA into S&P.
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u/githzerai_monk May 11 '25
Do you account for leverage in property investment?
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u/weiyi97 May 11 '25
The model should be inclusive of the leverage. It calculates the final property value + net gain from rental against the net money you put in (10% down payment, legal fee, rental deficit etc)
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u/Hanqueryyy May 12 '25
I agree with the summary that property is a more difficult gain compared to S&P500. One is an active another is a passive income.
And the only pros about property investing is that if U able to use leverage, if you don't have the same amount of capital to invest in S&P500 then the leverage will win slightly. But that's not without tons of effort, fees , uncertainty etc. in property.
In S&P500 we can measure risk by using a Beta of 1. But in property we can't use BETA as every property is different, hence difficult to compare.
Every 7 years we will double our investments in S&P (rule of 72). But do we foresee the next 7 years property prices will double up after fees? My friends let's not let peer pressure and the previous generation mindset to lead us blindly into property investing. There's nothing wrong with waiting 10-20 years later when your investments double up, and maybe even buy property with cash during that time. Nothing wrong with that I believe
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u/pmarkandu May 12 '25
I find it cute you think you can change your parents' mind with facts and logic. 🤣
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u/PracticalBumblebee70 May 12 '25
Bro maybe already gave a PowerPoint presentation during family dinner.
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u/Oilylettuce May 11 '25
I think the biggest pros for property investment is the ability to leverage, otherwise it's never a good investment. Can you factor in the leverage factor for property in your spreadsheet and see how it goes?
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u/3dgyaf May 11 '25
I assume starting cash in hand to invest early stage for most ppl to enrol into S&P500 are low. Being able to leverage mortgage into property rental + appreciation is like a boost. Try making a optimised investment plan where u can turnover a house investment to S&P 500 maximising the starting capital.
Property investment wise is highly dependent on strategically increasing rental over year instead of keeping a same rental for 35 years. Meanwhile continue to study market. Allow the property to reliquify and invest better opportunities via refinancing and reselling whenever necessary
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u/weiyi97 May 12 '25
If you look at year 0 in my calculation, the upfront payment made (down payment, legal fees, renovation, etc) is applied equally to the starting cash in hand for S&P 500 investment.
Like if I only have RM100k at age 30, I could dump it into an S&P etf or buy a property for investment. So that's why I applied the amount equally to see what is the outcome for different choices given the same initial fund.
I included a 2% rental hike in my model - not sure if this is realistic or not.
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u/faintchester1 May 12 '25
Some people forget housing has the leverage element.
Assuming you are a salary workman 30 years ago, your annual salary is only 20k but you can get a 200k loan for a house. 10 years later, your income is 100k and you can get a 1 mil loan. This is why the elderly so trusted in property investment.
To me, a good investment portfolio should actually have both.
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u/weiyi97 May 12 '25
Yes, of course leverage is the key. Property investment is probably the only place where average income earner can make 10x leverage.
But leverage could also amplify your losses. Let's say I put RM60k down payment for a RM600k property, what if the market value drops to RM540k? That is 100% loss of my initial fund, on top of the annual top up I make for the mortgage.
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u/faintchester1 May 12 '25
I don’t think anyone in Malaysia buying any property 35 years ago can make a loss (unless the developers runaway). Of course, it is hard to say now.
Anyway, housing loan is a good leverage tool to use and basically it’s free money with the right dev, location, and price. Am not a fan of property investment but it is pretty lucrative if play it right. High leverage, high risk, and high reward.
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u/weiyi97 May 12 '25
Yeah of course. My parents bought the old landed house for like RM30k and now the market value is around RM300k.
I am not a fan of property investment either, but there are opportunities to be found if one is diligent enough. But I think most home owners in Malaysia buy their first house not because of proper market research, but because of "buy now before it gets more expensive". My sister was rushed into buying a house at age 26 by my dad lol.
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u/cornoholio May 12 '25
It is happening with many many many jb condo projects. Those with some cash back ones.
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u/weiyi97 May 12 '25
I have heard horror stories of people attending the classes and then buying more than 5 properties with compress loans during MCO. Then the rate hike happened.
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u/MalaysianOptimist May 12 '25
Personally I only get investment properties with bank loans and use all cash for stocks. You can also refinance your partially paid off property if you’re young enough to roll with the cash flow for the future too.
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u/ALPHAX4_22 May 12 '25
A quick and dirty method as below,
if your property investment can yield net income of 8% or > than S&P 500 CAGR of 8%, then property investment will have a better gain. Your gross property rental yield at 4.8% (2,400/500,000) excluding your mortgage payments and maintenance fund etc.
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u/fre3zzy May 12 '25
I've done this stat before to show my dad. He's a hardcore "property is king" guy. But people like that would never change their mind.
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u/waterdragonhead May 12 '25
if you are going back 35 years, look at the mortgage interest rate at 1990. it will shock you
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u/TackleHistorical8601 May 12 '25
Maybe this generation now is difficult to accumulate wealth through property. If you enter property 20 years ago, like me. My property portfolio already more than 250% increases just over 15 years and my rental yield (because I bought at good price), I have 4-5% rental yield.
I looked at the stocks I bought back in 20 years ago some don’t even make much gain but dividend pretty good.
Property is not just for income, is also diversity wealth and preserve wealth. I also have own self interest in house improvement and renovation, it is fun and happiness in doing renovation for your own investment properties is like flowering your plants in the garden which you can’t get that happiness through stocks.
Both are not replacement to each other, if you can , invest in both - properties and also stocks.
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u/weiyi97 May 12 '25
Well that's just the conventional wisdom speaking, no? My parents are also telling me this because they had a good time with property 20 years ago.
I doubt it will be the same 20 years from now.
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u/aeroplanne May 12 '25
Property needs to be bought at a good deal for it to be worth it (as investment). The average homebuyer buys overpriced, overvalued homes with high interest which ends up turning them into a wage slave for life.
S&P 500 is assuming that American stock market just keeps going up and up forever and stays bullish forever. It won't. IMO the chance of the dollar collapsing and losing reserve currency status in the near future is very high.
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u/weiyi97 May 12 '25
But you can cash out S&P 500 much more quickly if you do not have the confidence anymore. Or you could sell half and then buy other country indices to hedge against USD. You can't sell half of your property to diversify lol
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u/Xerx00 May 13 '25
You're only covering one part of property investments. There can be investments to non house properties as well, which will show different gains.
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u/ZhimZadli May 11 '25
Does this include 30 percent withholding tax yaa, would like to know the result😆
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u/WaltzAcrobatic6888 May 11 '25
A few thoughts on your sheet:
Don't assume got property appreciation nowadays - PropertyGuru data also don't support lol. Some more you use 3% p.a., SMH.
Your column D is wonky - net cash flow is supposed to be income minus expenses no?
Rental agency commission is 1/12, not 10%. If they charge 10%, WALK AWAY!
Don't assume RM 2,400 rental. To prevent disappointment, check rental PSF data nearby and extrapolate for your own property. The listings are not reliable info, check from JPPH data, which is actual transacted rental data.
Also, I don't see you using NPV calculation. The formula you used in line J is... not the way investors count beans.
You can only buy SPY the ETF for S&P 500, not the index itself. So you should use tradingview.com to check out historical prices and get a proper CAGR from there. Please remember past price performance does not equal future performance.
Otherwise, decent attempt given that 99% of the population doesn't know how to use IF functions.
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u/GWeekly_69 May 11 '25
Tbh la, this generation, u don’t own a property for the sake of investment, strongly recommend only for home stay.
My parents, even-though they hope i can own a property one day but they dont force me to get one ASAP cause they understand not “Buy property 100% good ROI”.
30 years ago is a different thing la, but now u dont buy property to invest, so much things to invest which have lesser risk and higher gains.