Why Shop Apartment Can Be The Best Real Estate Investment With Little Or No Money Down

Why Shop-Apartment Can Be The Best Real Estate Investment?

Shop-Apartments are small rental units that normally can be office-use or residential-use; strata-titled above retail stores or shops where businesses of stores, restaurants, goods, wares, drugs etc are sold by retail for the convenience of those who live in the building or near-by areas.

What accounts for the primary of Shop-Apartments over other types of real estate investment; especially with little or no money down? The main reasons can be realized in a number of ways:

1. Cash Flow – is such a vital element of the power of real estate investments to have excess of cash received from rents over cash expenditures. Smaller apartments have an advantage in that, because of demand, they are usually more readily salable that larger units would be. Excellent financing is also often available for these smaller units.

2. Demand – people always need a place to live, as shelter is one of the basic requirements of existence. At the present times, there may be great opportunities in buying those run-down or foreclosed units. Many of these properties can be purchased at prices and terms where reasonable management can result in a good positive cash flow. One caution is to buy closer to where you stay. It must make economic sense.

3. Affordability – smaller shop-apartments are always cheap to rent and cheap to buy. With the leverage of using bank’s money, shop-apartments can be extremely affordable as compared to other types of real estate investments; as shown in the real case below.

4. Business Cycles – the occupancy rate of shop-apartments are normally not affected by business cycles traditionally view as negative. With current financial turmoil and recession, more people are looking for cheap housing. As demand increases, occupancy rates and rents increase.

Below is a real case demonstrated to start real estate investment with little or no money down for a shop-apartment in Taman Bukit Tinggi, Klang, Malaysia.

CASE 1 – with 10% downpayment on selling price @ RM 60,000.00

CASE 2 – with zero% download on selling price @ RM 70,000.00 (mark-up RM10,000.00 for downpayment + legal & other expenses)


In both cases, we realize a positive cash flow in this shop-apartment investment without even taking into consideration of tax benefits and appreciation in value or to increase the current rent 0f RM 500.00 based on the market trend and demand for cheap housing in that area.

To simplify the whole process, here is an Investment Tool that you can use to estimate monthly cashflow, monthly installment and return-on-investment(ROI) to help you to justify your investment by just entering all the relevant data in the yellow cells. Login to:

www.elvincom.com.my

Scroll to the bottom of left-side bar & click ER-Investment Tool to open the excel file as follows:

With the application of the above ER-Investment Tool, with the compliment by Elvincom Realtor; improving the return of your property investment becomes much more easier and straightforward. Sometimes the result of improvement may not be significant, but what we appreciate is to explore the opportunity for us to enhance our investment skill.