Understanding Sub sale property in Malaysia

Young man with coffee mug looking out through window at home

What are sub sale properties?

Sub sale, also known as the secondary market are previously owned property purchased on the market where homeowners and investors interact through buying, selling and renting.

The sub sale market mainly consists of landlords who rent and lease their property out before deciding to sell it. With sub-sale transactions, both parties are free to negotiate any mutually agreed terms of an agreement. Unlike new properties which are governed by specific terms overseen by the housing authority, each sub-sale transaction can be different in nature.

Breaking it down

Sub sale properties are known to appreciate slower compared to new properties in the primary market. This is because depreciation, wear and tear, and other factors are incorporated into the valuation procedures.

The sub sale market is attractive to investors looking to strike a deal on a potentially profitable property. When new properties are leased out or sold, they are listed and transacted through the secondary market.

An experience investor or homeowner will know when to exit the market based on economic, political and time varying conditions.

Why Sub sale?

Sub sale properties in the secondary market have the option for a house viewing before buying the property. Rather than imagining what it may look like from the models and brochures, you get to see the property as it is.

Being located in established neighbourhood is an added advantage as there are historical figures one can use to evaluate an area. Does the area have all the amenities you need and are they convenient to access?

Sub sale properties are ready for staying, allowing the buyer to move in shortly after the transaction has been completed less any damages or renovation required. Remember to check out if the property matches your requirements and if any existing damages is recoverable and worth the cost.

When viewing the house, you get the opportunity to feel and imagine yourself living there. Take a deep breath and ask yourself if living there is really what you want for you and your family. Sub sale properties ,relieves some of the risk of staying in a new area and regretting the decision. Allowing more options to choose from is a liberating feeling during your property search.

Existing fixtures and fittings are an added value to some. Sub sale properties are normally fitted with old or used goods such as shoe racks, gardening tools, cleaning equipment and more. This leaves you a smaller shoestring budget before renting it out. Additionally, it may already be fully or partially furnished, leaving you the hassle of furnishing the property.

One of the reasons for buying a sub-sale property is the lower price tag. New properties can be sold at a premium price as the property gains traction and demand. You may be able to negotiate for a good deal. House flipping old properties in the secondary market can bring in a good payout.

Sub sale properties are considered less of a risk compared to new development units launched in the primary market. Off plan units sold by developers are considered risky due to the uncertainty it brings. Sub sale property has a lesser risk overall and no development risk.

Additional notes

There are many incidents of sellers claiming to sell the particular unit, but they turn out to be a fraud and the buyer is left feeling cheated of their deposit. Make sure to verify that the property title belongs to the seller and there is no third party having an interest in the same property. You can personally check this by visiting the land office based on its attached district.

When considering investing in sub sale properties, you will have to take into account the taxes, depreciation and interest. These factors heavily affect the profitability of the properties.

With the sub sale market comprising the bulk of property transactions, there is plenty of information needed to make a buying decision. Are you passionate about turning old homes into breathtaking airbnbs? Do you love to renovate houses and putting a little bit of personal touch? Do you love the challenge of turning old houses into beautiful masterpieces? Then sub-sale properties might be suitable for you.