We did a lot of research before deciding to get a land. We didn’t know buying land is quite different from a house. Besides location, these are the few things you want to know/prepare before buying a land.
- Finance/Loan – Did you know you can also get a loan to buy a land? The only difference is that you need to have 30% cash of the land’s price before buying because the bank usually will only approve 70%-80% of the total land price depending on location and title. Freehold title and residential title will be a preference for bank approval. So for example if you found a land for RM300,000. You need to have RM90,000 cash to pay for the land because the bank may only loan you RM210,000.00. Also, spare about 15% extra for the lawyer fees and any necessary processing fees.
- Land title – When it comes to land title, it is not just about freehold or leasehold. There are a few types of titles for land in Malaysia. The cheapest land will be with an agriculture title. With this title, the land usually comes a lot cheaper than a residential title but with a catch. Agriculture titled land only allows you to build 1 building (usually a small hut, quarter-sized of the land) within the land itself. When it comes to land, it is also advised to consider a freehold instead of a leasehold to minimize the risk in case the government wants to take it back in the future for development. You know, another highway or LRT project or a mall. You know, like we need more of those >.< Since we are going to put our heart and soul into the land, we want something more permanent.
- Infrastructure – This is an important consideration. We found many affordable lands (mostly agriculture titles) but there is no road/electricity. Unless you plan to build your house as an off-grid house (which means using purely solar, purely rainwater harvesting system, etc), it’s important to have roads and easily accessible. This is because building roads itself costs a bomb and you don’t need the unwanted stress of explaining to authorities when you apply for a water/road permit. Even with infra, the process is quite a lot, so if the land has no access, the approval may take a long time. What is at stake here is not just money but time and the money I’m talking about here is not RM2000 but expect about RM15,000 to build a road to your house and it may not even look nice.
- Local council approval – Depending on your plan or house design, you may also want to consider which local council covers your area. Based on our research, if you bought a residential land but within a gated & guarded community, strata/master title, you need to pay your developer a big deposit(RM15,000 in one case) before you can get approval from the local council. These are the little things but cost a lot of money if you do not prepare for them.
- Area/surrounding – This is something important to have in mind because buying a land is a big risk. If you have a choice, choose a neighborhood that is in the developing stage (not too ulu) because in case you are still saving money to build the house, the price of the land you bought will also increase in time. If things don’t work out, you can always resell the land without losing too much money and also the demand is higher compared to the outskirts area.
- Geographical position – Learning from my past experiences staying in different areas, find a slightly higher ground land but not too high so you don’t have to spend extra money to build protection from landslides and all. I’m talking about RM15,000 here for a retention wall or building a house on a slope generally requires more money due to architect/engineer consultation fees (they’re taking the risk for you) or just using more steel to support the foundation. It does give a nice view for sure so if you are rich, go ahead. No one is stopping you :). Another thing to look out for is water. River/creek sounds nice but take into consideration the weather of your country. A country like Malaysia is prone to flood and rain and it’s unpredictable. Save yourself the unnecessary headache, if you like water flowing sound, just dig yourself a nice drain, and put some koi fish inside, you got plenty of land for it 🙂
I hope this post will give you a headstart on the consideration factors of buying land in Malaysia. Don’t be afraid to take the first step. It’s all about preparation, both mentally and financially. With our experience, we want to encourage more people to be bold and live a sustainable life together.
Happy planning!
RR