We had a requirement list for the land of our choice. Yours may be different.
When we decided on buying the land, we were thinking of buying it together with hubby’s siblings and in-laws. In order to make sure everyone is on the same page, we decided to come out with a list to fulfill everyone’s requirements.
If you are also thinking of purchasing land for your retirement, below are some factors you should consider:
That is the first criteria to think about as you can immediately start mapping out the locations. We decided that it should not be anywhere above 1.5 hour’s drive so that if we need to come back to KL, we can do so easily. But it depends on your choice, if the distance is not an issue for you – then you have a bigger pool of choices to consider!
How big is enough? It really depends on what you have in mind.
Our plan was to build a 1,000 sq ft house, have a 1,500 sq ft vegetable garden, and the remaining land be filled with fruit trees. So in total, I thought 5,000 sq ft was enough. I was realistic, as I had a strict budget to follow.
What did we finally decide on? 47,916 sq ft! Nine and a half times more than we initially planned. Read my next article on why we deviated from our original size idea and budget.
Have a rough idea of what you want to do, and then work out a rough land sizing that would fit your requirements. Stay flexible though because you never know what can change. An ideal plot of land may not fit your initial size plan but it may fit your overall retirement vision.
3. Land Type
I have always known that there are many land categories in Malaysia. For starters, there are residential, commercial, industrial, and agricultural. These are self-explanatory and you need to adhere to the specific use that it was designated for.
Some are freehold and some are leasehold. For non-muslim, you cannot buy Bumi Lot or Malay Reserved land. Usually, the land listings and real estate agents would be very clear about the land classification.
Always check if there are special conditions that come with the land. We have come across a land that has a condition that you need to plant paddy. Or that the land cannot be sold to non-family members. How to check? Once you are keen on the land, head to the land office for a detailed land search. Having a good real estate agent to assist you is key to all these questions and more.
We decided that we would only want land with freehold status. We are okay with residential or agricultural land. The only difference between the two is the building size, and some additional taxes to pay. For agricultural land, we can build one dwelling not exceeding 20% of the total land size. For residential, you can use the entire land for the same purpose, while adhering to all the local building laws. We were not building a mansion, so we are okay with either as long as other criteria are met. Residental land is subject to cukai tanah (quit rent) and cukai pintu (assessment) while agricultural land is only subject to cukai tanah.
4. Land Tier
You will hear this terminology used by most real estate agents – Tier 1, Tier 2, Tier 3. Basically, Tier 1 means it has direct access via a proper tar road. Tier 2 means that the land needs to go through a Tier 1 land through a designated right-of-access road. Tier 3 means that it will be going through Tier 1 and Tier 2’s right-of-access roads.
Right-of-access is clearly outlined in each land, so there is no land without access. The landowner cannot deny you from using the area that is designated right-of-access roads, even if that is on their piece of land. However, as it is ‘no man’s land’, it also means that it is up to all landowners to maintain the road. Most of the time, these roads are gravel or muddy roads that may require a 4-wheel drive to access. So bear that in mind when you start the search. The cost of maintaining roads is not a small sum.
We ideally wanted something easy to access with our tiny car, so we prefer land that is either in the Tier 1 category or had fair road access. Land in this category is also pricier.
5. Flat or Slopes
Flat land is generally easier to manage – to build anything, to plan your plantation, roads, etc. Sloping land is harder to build, and you’ll need terraces to make the land usable. However, you will likely get a nice view due to the elevation and structure of the land.
After much consideration, we chose sloped land on which we will be building our home perched on the slope. We will have to do slope management works, monitor water flow, build drainage, build a pond, build terraces, and internal roads. The cost of building on sloping land is higher, but the view and elevation are worth it.
If you have a vision of going off-grid in totality, then maybe you won’t need this. I’m talking about electricity, pipe water, and phone/internet connection. If you need all these, then make sure you check whether there is an existing connection or that you can potentially get all these. Check on the cost too as it will surprise you as to how expensive it can be to get electricity poles from the main lines to your land.
If you are happy to go off-grid, you can choose solar systems for all your electricity needs. Be ready to put aside RM15K for a starter solar system, and that excludes regular maintenance, etc. Speak to a reputable solar systems provider that can provide you with support, maintenance, and spare parts. For water, you can do rain harvesting or rely on spring water (some land has natural spring water or what we call “air mata air” – as in water from the ground). If you are using this for drinking, make sure that the water is from the source itself. This means the water from the ground has to originate from your land.
Our choice of land came with piped water, and electricity from TNB – this fulfills our criteria as we did not intend to go off-grid. For the internet connection, we needed a special device to amplify the mobile signal and internet connection as the land of our choice is deep in the jungle. It is workable for us, as we don’t expect a fiber internet connection. We would also dig a well (potentially) as we have an underground water source on our land.
Have a rough idea of what you would like to put aside for this. Be realistic. You can get loan financing for land but make sure that you are able to pay off the mortgage before you retire! When we made an inquiry, we found out that land financing is pricier than home loans and the financing amount is also lower. So make sure you have saved enough to pay the initial downpayment.
What our land is like…
As we had a list to cross-check with, it was easy for us to streamline our choices. After a lot of contemplation, we made our choice, and here’s a map of where it is. It is in the middle of the jungle, so there is no way I could pinpoint it to precision. It is a guarded area, so you can’t actually walk in without registering or an owner’s pass.
Summary of the land:
- Distance: 1.5 hours drive away in Karak, Pahang
- Size: 1.1 acres (47,916 sq ft)
- Land Type: Agricultural Land, Individual Title, Freehold
- Access: Tar road access accessible by normal car
- Flat/Slope: Gentle terrain, elevation 170m at the highest point
- Utilities: TNB, piped water, underground water source available (will dig a well), need a special device to amplify mobile/internet signal
- Security: Guarded 24 hours (with that it also comes with a monthly maintenance fee of RM200 per acre per month)
Hope all the above tips help you in selecting your choice of land for your retirement dream. I will be sharing our progress from time to time, but we will be going slow from hereon. We envision this entire project to be completed in 10 to 15 years, just in time when we are ready to retire.