“Adrian, I am only 21 years old this year and I’m still studying. Can I possibly buy my first property?

It is a very common issue these days – young people struggling to get a house. Hey it is not as hard or complicated as you think it is!

I have received tonnes of Facebook messages from young people (the millennials). They would like to purchase real estates, but they are still studying, or just got their first job after graduation and is not economically stabile. So, how should they go about this problem?

There is no denying that the sooner you buy a property, the better it is for you. However, do take note that you must be 18 (age of majority) before you can sign your mortgage agreement and Sales and Purchase Agreement. Otherwise, the law will assume that you are still a minor and cannot sign a valid contract. So even when I say the sooner the better, there is a general presumption that it must be above the age of 18.


Graduation is just the first step to step into the employment world!

Here is a case study:

Hebe is 21 years old. She has been a coordinator for a company for a year and has a monthly salary of RM3,000. Recently she was in a property fair and leaves with an interest to buy an apartment in Seri Kembangan for RM250,000. This is her first property, so she wants to borrow 90% of the purchase price from the bank.

The question is: Can Hebe buy this apartment?


If you want to play a game, you must first understand the rules of the game. Similarly, when purchasing a property, you must understand the rules of mortgage loans. Every bank has different regulations, but it is not far different from each other. These following are some of the key points that all the banks will refer to:

  1. Calculating loan ability (LA)

I often teach my students that the first thing to do before buying a property is to calculate LA. If you can’t get through even the initial LA stage, you don’t have to waste time talking about buying or not.

Usually the first and second properties can apply for a 90% loan from the bank. Take this story as an example. Hebe wants to buy the first property, so she can get a 90% loan.

Leverage ratio 1:9

Property price: RM 250,000

Loan to apply for: RM 225,000

Steps Item Input Note
2Multiplied by (×) 0.82,000After income tax deduction, cost of living (80%)
3Multiplied by (×) 0.71,400Debt Service
Ratio (DSR) 
mortgage /
0Nil. Figure will
depending on
your own
 Monthly car
 Monthly credit
5Balance1,400Leverage /
Lending Ability
6Multiplied by
Number = 200
Calculate wisely your monthly expenses and how much money left for you to buy your property is crucial.

That’s right, Hebe’s loan ability can go to RM 280,000!

In other words, there is a high chances that the bank will approve her loan for up to RM 280,000!

However, what if the price of the property she wants to buy is RM 500,000 instead? We all know that it is quite hard to find a property priced at below RM 300,000 in the city centre, right?

If that is the case then we must refer to the second step below.

2. Increasing income

From the above LA calculation table, we know that the proof of income is the most critical part. In the case of Hebe, she has no other mortgage and car loans, so the monthly commitment is not the focus that can be started. Instead, income, Hebe can find ways to increase her income so that her ability to borrow can be strengthened.

Another way is to joint name. Hebe can work with parents or brothers and sisters to borrow their payslip to strengthen their ability to borrow a mortgage loan. Let’s say Hebe is looking for her mother to buy a house:

Mom’s salary: RM8,000
Mom’s monthly obligations:-
Mortgage: RM2,000
Car loan: RM1,000

It is okay to ask for a little help to start off in life – like Hebe asking help from mom to finance her first property.

Using the above LA calculation table to calculate, the mother’s lending ability is RM 1,480, multiplied by the magic number 200, and her LA is RM296,000. Therefore, it is absolutely feasible for Hebe and Mom to jointly buy a property of RM500,000!

As a young person starting out in life, everything is difficult at first.What is important is that you take the first step to own your first property, then second, third, fourth properties should be easier.. Furthermore, we have to understand clearly why we want to buy a property? What is our purpose?

Some people buy a house to give their families a better quality of life; some people buy a house to leverage on it and use the rental to get more passive income. Whatever your reason, you must master at least the basic of property investment strategy. If you don’t understand, read a little more related books, or learn directly from experienced people.

If you are interested to learn about property investments, you can contact our team @ 010-2008828 or leave us a message here or at Facebook.

Disclaimer: Different banks have different methods to calculate your Loan Ability. Please communicate with your bank before proceeding.

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