A Malaysian client already owned four properties. He came to me with a new launch he liked and wanted help closing the deal fast. The fifth unit almost cost him. Here is why.
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Ask Jason on WhatsAppThe one question I asked first
Before saying yes, I asked Client B: how much of your total net worth is already in property, in this same region? He had never added it up. When we did, more than 70% of his wealth was in one asset class, in one area.
A fifth unit was not diversifying anything. It was doubling down on the same risk: the same local market, the same tenant pool, the same interest-rate exposure.
What else a fifth property changes
- Financing gets tighter. Bank Negara caps the loan at 70% of the price for a borrower’s third and subsequent housing loans, so each extra unit needs more cash.
- Debt service ratio climbs. Every existing loan counts against the next application. See DSR explained.
- Cash is thinner in a vacancy. With several units in one area, a slow rental market hits all of them at once.
- More for the family to untangle. Each property is another title to transfer through the estate if something happens to you.
The outcome
We paused the purchase and looked at the whole picture first: cash buffer, loan exposure, and what the family would face in an emergency. More property is not automatically more wealth building if it is not actually diversifying anything.
The portfolio question comes before the property question. For property-heavy owners, see also the insurance gap behind a property portfolio and will or trust for multiple properties.
Thinking about adding another unit? Let’s look at your whole portfolio before the next booking form.
Client details are anonymised. General information, not financial advice. By Jason Lim (REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6).