---
title: "The Top 3 Ways to Invest in Property in Malaysia"
description: "Looking to invest in property in Malaysia? Discover 3 alternative ways to reap the benefits without the hassle of owning property. Subscribe for more!"
url: "https://www.mrmoneytv.com/articles/the-top-3-ways-to-invest-in-property-in-malaysia/"
category: "Property"
author: "Finlit"
published: 2024-08-15
source: "Mr Money TV"
---

# The Top 3 Ways to Invest in Property in Malaysia

Looking to invest in property in Malaysia? Discover 3 alternative ways to reap the benefits without the hassle of owning property. Subscribe for more!

## Key takeaways

- There are three ways to get property income in Malaysia without owning a property: Real Estate Investment Trusts (REITs), subletting a rented unit, and investing in tiny houses.
- A REIT must distribute at least 90% of its taxable income to shareholders as dividends each year, and buying one makes you a part-owner of large commercial property, for example Pavilion REIT gives you a slice of the Pavilion malls.
- REITs are liquid: because they trade on stock exchanges you can sell shares immediately and get your money the next day, versus 3 to 6 months to sell a physical unit.
- Subletting means renting a whole unit cheaply on a long lease then renting it out room by room, for example paying RM2,200 to RM2,300 a month and collecting RM3,200 from four rooms at about RM800 each, with upfront cost likely under RM10,000.
- Tiny houses (200 to 600 sq ft) via Big Tiny start from SGD 10,000 (around RM30,000) for a whole house or a fraction, leased back for a return of up to 10% a year, and you can sell it back later at the original price.
- You buy REITs by opening a stock brokerage account and trading on Bursa; Malaysian options named include KLCC Property Stapled, IGB REIT, and Sunway REIT.

Property investment is attractive for its potential to generate passive income and protect against inflation. However, owning property comes with challenges like high upfront costs and ongoing maintenance. For those who want the benefits without the hassle, there are alternative ways to invest in property. In this article, we’ll explore three methods to invest in property without actually buying one.

## 1\. Real Estate Investment Trusts (REITs) 

A REIT is an investment vehicle that pools money from numerous investors and passes it to a professional management team to purchase, develop, manage, and sell real estate assets.

### Benefits of Investing in REITs

1.  **Great dividend returns** To qualify as a REIT, a company must distribute at least 90% of its taxable income to shareholders annually in the form of dividends, that means you’ll get money from the company at the end of the year.

2.  **Opportunity to own significant properties**

    We’re not talking about big houses or bungalows; we’re talking about owning parts of huge commercial properties like shopping malls. For instance, when you invest in Pavilion REIT, you become a part-owner of the Pavilion shopping malls. So, the next time you walk into Pavilion, you can tell yourself, “I actually own a part of this mall.” For most average people, owning a big commercial property like a shopping mall is almost impossible, but with REITs, you can do just that. You can become a co-owner and enjoy rental income from top brands like Chanel, Hermès, and Rolex.

3.  **Liquidity**

    You can buy and sell your REIT shares anytime you wish, unlike owning real property, which takes months or even years to sell. If you own an apartment and want to sell it, you have to contact a real estate agent, do multiple viewings, wait for the buyer’s loan approval, and only then can you complete the sale, which could take 3 to 6 months. But with REITs, which are listed on major stock exchanges, you can sell your shares immediately and receive your money the next day.

    REITs are especially popular in places where property prices are very high, like Singapore, where rising property and rental prices generate high rental income that is passed on as dividends to shareholders. Malaysia also has some good REITs, such as [KLCC Property Stapled](https://www.klcc.com.my/property-reit.html), [IGB REIT](http://www.igbreit.com/), and [Sunway REIT](https://www.sunwayreit.com/). 

#### How do I Invest in REITs?

All you need to do is open [a stock brokerage account](https://tinyurl.com/flmm24) and buy them on the stock exchange. In Malaysia, you can use Bursa, and in Singapore, you can use the Singapore Stock Exchange. You can open an account with platforms like [moomoo Malaysia](https://tinyurl.com/flmm24), which allows you to buy Malaysian stocks, US stocks, and even Singaporean stocks.

## 2\. Subletting a Rented Property

Subletting a rented property might sound confusing at first, but it’s actually quite simple. It’s where you rent a whole unit from the landlord, ideally at a lower price and for a longer lease, and then sublet it room by room at a higher total rental rate.

![Subletting a rented property](../../assets/articles/the-top-3-ways-to-invest-in-property-in-malaysia/img-1.jpg)

Let’s say a unit costs RM2,500 per month to rent. You negotiate with the landlord for a three-year lease and get the rent reduced to RM2,300 or RM2,200 per month. You then sublet each room individually, charging an average of RM800 per room. If there are four rooms, you could collect RM3,200 in rent, but your cost is only RM2,200 or RM2,300, allowing you to earn the difference as passive income.

### Benefit of Subletting Rented Property

The upfront cost is lower compared to buying a property, where you’d need to pay a 10% down payment plus legal fees and other costs. For subletting, all you need is the deposit and lease agreement, which would cost you much less—probably under RM10,000. Secondly, since you don’t own the property, you aren’t responsible for most maintenance costs.

If something like a light bulb, fan, or air conditioner breaks, it’s the landlord’s responsibility to fix it.

This method is quite popular, especially in areas with many colleges or educational centres, where students need affordable accommodation and prefer renting a room rather than a whole unit.

## 3\. Investing in Tiny Houses

Investing in tiny houses involves putting your cash in small homes, usually ranging from about 200 to 600 square feet. These homes are modular and custom-built to suit specific needs. Tiny houses became popular in the US as an affordable alternative to traditional homes. An example of a company that offers investment opportunities in tiny houses is [Big Tiny](https://bit.ly/tinyassetsmy), from Singapore.

### How it Works

You can buy a whole tiny house or just a fraction of one, starting at SGD 10,000 (or around RM 30,000). You then lease the house back to them, and they deploy it to eco-tourism spots like Australia, New Zealand, or Singapore. They manage the property as an Airbnb, and you receive a return of up to 10% annually. After a few years, if you wish, you can sell the house back to them at the original purchase price. This way, you generate passive income just like a landlord, but without the hassle of managing the property yourself.

Tiny houses can generate more income than regular rentals, but they can be a hassle to manage. With [Big Tiny](https://bit.ly/tinyassetsmy), however, they handle all the management for you, including maintenance and finding tenants. In Singapore, this type of investment is gaining popularity, and the company is even working with the Singapore government to deploy tiny houses on Lazarus Island as an eco-tourism spot.

## Conclusion

These are three ways to reap the benefits of property investment without the hassle of owning a property. Whether you prefer subletting or investing in tiny houses or REITs, there are various options available that can suit different investment styles. Which one do you think is the most suitable for you? Let us know in the comments below! 

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## Frequently asked questions

### How can I invest in property in Malaysia without buying one?

There are three ways: Real Estate Investment Trusts (REITs), subletting a rented property, and investing in tiny houses. All three give you the passive income and inflation protection of property without the high upfront cost and ongoing maintenance of ownership. REITs let you co-own commercial buildings, subletting means renting a unit and re-renting the rooms, and tiny houses let you buy a small modular home and lease it back to a manager.

### What is a REIT and how do I invest in one in Malaysia?

A REIT pools money from many investors so a professional team can buy, develop, manage, and sell real estate. To qualify, it must pay out at least 90% of its taxable income as dividends yearly, and owning shares makes you a part-owner of properties like the Pavilion malls. To invest, open a stock brokerage account and buy them on Bursa. Platforms like moomoo Malaysia let you buy Malaysian, US, and Singaporean stocks.

### How does subletting a rented property make money?

You rent a whole unit from the landlord, ideally cheaper and on a longer lease, then sublet it room by room for more in total. For example, negotiate a unit down to RM2,200 or RM2,300 a month on a three-year lease, then rent out four rooms at about RM800 each for RM3,200. The difference is your passive income, upfront cost is likely under RM10,000, and the landlord still handles repairs like a broken fan or air conditioner.

### How much do you need to invest in tiny houses through Big Tiny?

You can start from SGD 10,000, around RM30,000, buying a whole tiny house or just a fraction. Big Tiny, a Singapore company, deploys the homes to eco-tourism spots in Australia, New Zealand, or Singapore and runs them as Airbnbs. You lease the house back and receive a return of up to 10% a year. After a few years, you can sell it back to them at the original purchase price.

### Which Malaysian REITs can I invest in?

Malaysia has three well-known ones: KLCC Property Stapled, IGB REIT, and Sunway REIT. REITs are especially popular where property prices are high, like Singapore, where rising property and rental prices feed high dividends. To buy Malaysian REITs, open a stock brokerage account and trade them on Bursa. A platform like moomoo Malaysia lets you access Malaysian, US, and Singaporean stocks.