FundMyHome's property crowdfunding, will it helps?

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In the announcement of Malaysia Budget 2019, it introduces property crowdfunding for the Malaysian who has difficulties to own a home. It is P2P and in short, buyer can own a home with the help of public funding.

There are not many details about how it actually works, or how soon it will be implemented upon announcement. Anyway, I feel it is a very innovative idea and I am extremely excited about it because it overcome some barrier of owning a home, especially for those of you who have been rejected by the bank.  

Few days later, I came across FundMyHome and introducing a whole new way to own a home with no monthly repayments. Buyer needs to fork out 20% of the purchase price and the remaining 80% will be funded by institutions. After 5 years, you are forced to sell because the institutions who have been financing your home must get back their return as promised by FundMyHome scheme deal. On the other hand, if you insisted not to sell, then you can choose the traditional way to refinance your home if you have the ability to continue owning it.

For most majority of people can’t effort to pay a lump sum of 20% to get started the FundMyHome scheme. However, you can still work out with your bank to borrow a personal loan so that you have the fund to get started with FundMyHome scheme and proceed to do the legal paper work. You only have to pay back to your bank on the monthly installment basic.

Solve your problem owning your home? Not really. The reality is you are actually renting it for the first 5 years with a contact. You feel you are owning it because legally the home is has your name but in fact you should not be forgotten that there a few special clauses added in your S&P.

What do I get? You can use it for your own stay. However, If you are not planning to own it for stay, I think is not worth the trouble. How about I own it and rent it to others? You might be renting it high otherwise you can’t cover your cost.

In my opinion, if your chosen property has a lot of growth potential and high chances of property appreciation after 5 years, I think it is worth the try provided that you are not buying it over valued property. It is important because you made a good profit after 5 years and eventually help you better chance to refinance. On the other hand, if the chosen property has a lot of uncertainty, I think you’re better off renting instead of buying it because you don’t want 5 years commitment of “owning it”.

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