Cityscape with railway and high office buildings in Kuala Lumpur, Malaysia

With current economic conditions, Malaysia property owners might need to revise their property plans.

Like Lady Gaga, we can give you “a million reasons” why student accommodation is a booming industry in Malaysia. To save you the hassle, we have narrowed it down to these points on why you should convert your property into a student accommodation hub.

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There would always be a fresh cycle of students looking for rooms

Did you know that in Malaysia, there are at least 200 (or more) higher learning institutions? In 2015, it was reported that there are a total of 120,000 international students and over 1 million local students pursuing their higher education in Malaysia on an annual basis. Each institution has at least 2 intakes per year, which doubles the chances of you getting a student tenant.

Another interesting fact is that Malaysia was ranked 10th on the list of “Top 10 countries with the highest number of inbound international students”, Now isn’t that a food for thought?

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Rental by room to students yields higher rental returns

Sometimes we would rather save ourselves the hassle of dealing with multiple tenants and issue only one set of keys to one tenant to take up your whole unit. But sometimes this isn’t the best way to enjoy a higher rental yield per year.

Now, based on renting out by units, something to bear in mind is the average market acceptance for yearly rental yield  is 4%. Let us illustrate to you in the table how it roughly works.

Property Name Nadayu28, Bandar Sunway Temasya Kasih, Glenmarie
Square Feet 990 sqf 936 sqf
Price RM700,000 RM700,000
Monthly Installment RM2,884.73 RM2,884.73
Furnishing Fully Furnished Fully Furnished
Rental per Unit RM3,300 RM2,350
Rental Yield per Year 5.6% 4.2%

** Numbers are based on online loan calculators and pricing is based on prices from property websites. For illustration purposes only.

Nadayu28 is a condominium located 550m away from Sunway University. Temasya Kasih is a condominium with the similar square feet but with no institution located within 1km of its radius.

There is a difference of 1.4% between the two properties even though it has the same price point.

Does this look convincing enough? Let’s break it down even further:

Let’s break it down by rooms:

Property Name Nadayu28, Bandar Sunway Temasya Kasih, Glenmarie
Square Feet 990 sqf 936 sqf
Price RM700,000 RM700,000
Monthly Installment RM2,884.73 RM2,884.73
Furnishing Fully Furnished Fully Furnished
Master Bedroom RM1,700  RM1,200 
Medium Bedroom RM1,250 RM850
Small Room RM1,100 RM700
Total Rental RM3,950 RM2,750
Rental Yield per Year 6.7% 4.7%

** Numbers are based on online loan calculators and pricing is based on prices from property websites. For illustration purposes only.
You may be wondering, what should you spot in these two tables? Well, this is what it means in a nutshell: From both comparisons, it is proven that room rental can bring you more rental profit for you as an owner or a property investor. You can earn up to 2% (or more) depending on how many rooms your unit houses.

Secondly, room rental nearby institutions that targets students can yield a higher profit than room rentals that are located in just a normal housing area.

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What are the hot areas for students?

We’re extremely pleased if we have managed to spark your interest. Why? Because it means that you want to know more about the hottest places for student accommodation!

Based on what we have recorded so far, the most transactions of bookings due to the high demand of student accommodation is as per below;

  1. Bandar Sunway

  2. SS15

  3. Cyberjaya

  4. Sungai Long

  5. Kampar

It’s okay if your property is not listed in any of the areas mentioned. These are just the a few that we’ve had numerous enquiries on. As long as you can prepare a shuttle service or if youre located near a BRT,  MRT,  LRT or monorail then you can always reach out to targeting students as your tenants.

Other essentials that you need to consider while preparing  your room for students is a WiFi connection with an acceptable speed, a clean and tidy fully furnished room, utilities included in the rental, a reasonable rate for the rental and also shuttle service for accommodation located more than 1KM away from institution.

If you could provide 3 out of 5 of the items stated above, your room would be a hit.

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Want a more in-depth details on how to make your room student friendly? Don’t worry, we will be featuring them soon! Stay tuned.

 

 

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