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Sunday, October 28, 2018

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Should you buy property near LRT or MRT stations?

Public transportation in Malaysia is advancing and improving especially in the Kuala Lumpur and Selangor area. Mass rapid tranist (MRT) has been expanding in the KL area and sprawling across the Selangor over the past few years with government’s initiative. Combined with the existing Light Rail Transit (LRT), monorail, KTM komuter, KLIA Express and KLIA Transit systems that gives convenience for the residents nearby the stations to commute on daily life. Properties situated around the vicinity of the MRT stations are in great demand and this has proven in Singapore, Hong Kong, Taiwan and China. These properties are usually fully occupied and high rental yields especially commercial properties, similarly like the bustling Old Klang Road area where it was developed way before the Federal Highway was built.


Property investors are hoping to earn their gold bucket and jump into their bandwagon by investing properties located near MRT stations. It is true that many have earned their profits but if you don’t research well the projects, you may not gain maximum profit. Let’s weigh down the advantages and disadvantages of investing properties situated near MRT stations.

Advantages

a) Appreciation in value

It is known that properties close to transportation hubs are incline to value appreciation faster and value retention is far more stronger than others. Due to it’s accessibility and convenience for commuters, the properties are regard as needs especially for working collars or students. In Kuala Lumpur, many of the residential projects including landed houses located within 5km from MRT stations are experiencing increment of value between 10% to 16.3% in year 2017.

b) Higher rental rate of return

Similarly to value appreciation logic, rental yield also increase when the MRT stations are built. Residential properties near MRT or LRT stations in Kuala Lumpur can fetch rental yield between 1.2% to 6.6%. Thus, it is obvious that the rental yield do appreciate after the development of MRT or LRT line.

c) Convenience

With the development of MRT and LRT lines around KL and Selangor, it brings convenience to the residents to get around to the city. The easy accessibility has made commuter to travel easily. There is a group that is sizeable target tenant market as it would be their residence of convenient to MRT or LRT station.


Disadvantages

a) Noise pollution

For a person who loves to be in serene and quite place, staying near the MRT/LRT stations is not ideal as during the rush hours tend to create more noises from the commuter crowds to the train screeching sounds. The noise pollution could begin as early as 6 in the morning and end as late as 11 in the night.

b) Traffic congestion

During peak hours, there’s always traffic congestion on daily basis. This condition will affect the residents around the area, could be the downside for potential buyers that wanting to use it for own stay.

c) Unpleasant aesthetics

Residential properties that is facing the stations are pretty unpleasant with the view of crowds and traffic congestion. With the noise pollution, your dream home has become everyday nightmare home. Besides, you’re living with less privacy where people could be lingering around the area, risking the safety of your home.

After weighing all the advantages and disadvantages of getting a property near LRT/MRT stations and you are ready to purchase the property. Here are some things you should know when purchasing it.

1. Expect to pay more 10% to 15%

When setting your budget, buffer at least 10% to 15% more for the property you intend to buy is located within the 500m distance from the stations. This is because many homeowners around the area will increase the price, same goes to property developers. If you intend to get your property from property developers, they are more likely to pass on the cost to you happily after they have secured the land after paying huge sum of money.

2. Good areas

Do your research and often do some site visits to the MRT or LRT locations. There are some areas that is slightly lesser crowds and quieter compared to those located in the office areas like in KL city centre’s stations.

Now that the MRT Line 1 was completed in year 2016, MRT phase 2 is on it’s way and will be completed in year 2021, sprawling from Kwasa Damansara to Kampung Batu area. Perhaps, now would be a good time to look for properties around the area before the prices increase after the MRT stations completed.

1 comment:

  1. Bisinglah kalau beli rumah dekat MRT.. tapi tulah.. mudah untuk pengangkutan..

    ReplyDelete