Secret of Successful Property Investment Strategy #2 – Cost/Fee Estimation

There are a few costs/fees that we need to take care upon buying a property.

1. How to estimate SPA legal fee (lawyer)?

1st RM150,000 – 1%

Next RM150,000 – 0.70%

Next RM2,000,000 – 0.60%

E.g., purchased price = RM350,000, total SPA legal fee is RM1,500+RM1,400=RM2,900

2. Stamp duty fee (government, Memorandum Of Transfer)

1st RM150,000 – 1%

Next RM400,000 – 2%

E.g., stamp duty for the example above is RM150,000×1% + RM200,000×2% = RM5,500

3. How to calculate loan/mortgage agreement fee?

Similar calculation as SPA legal fee but based on 90% of the approved loan (let’s assume that this is a residential property).

Using the example above, mortgage amount = RM350,000 x 90% = RM315,000

Loan legal = 150k x 1% + 150k x 0.7% + 15k x 0.6% = RM2640

4. Stamp duty fee for the loan agreement

Mortgage amount x 0.5%

Stamp duty = RM315,000 x 0.5% = RM1,575

My example above is based on my previous purchases. For property price more than the given example, you can always check for the latest fee (%) online. However, I would not expect much difference when comes to cost/fee estimation upon purchasing a property.

For 1st time property investor, you might want to set aside some other fees such as agent fee and renovation fee. Check out our formulation to evaluate a property investment here.

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