De Olive Northern Hub: Buy Versus Rent Analysis

• Main Authors: Abdul Rahman, Nora Azureen, Nordin, Norhafiza
• Format: Teaching Resource
• Language: English; English
• Published: 2021
• Subjects: HD28 Management. Industrial Management
• Online Access: https://repo.uum.edu.my/id/eprint/29698/1/14644_TC.pdf; https://repo.uum.edu.my/id/eprint/29698/2/14644_TN.pdf; https://repo.uum.edu.my/id/eprint/29698/

This case study is about Noor Aziah, the owner of De Olive Northern Hub store, an agent of Olive House products. She wanted to move her business from Tesco Jitra building to a nearby shoplot. There were two available shoplots located near to each other. The shoplots had similar size and design, but came with different offers; one was for rent and the other was for sale. Noor Aziah was in a dilemma to choose between the two shoplots as rental and buying a commercial property had their own costs and benefits. Considering the current situation of her business and financial condition, Noor Aziah was very worried that she might make a wrong decision. She was aware of all the costs involved in renting a commercial property such as security and utility deposits, the tenancy agreement fees, government’s stamp duty and agent’s fees. At the same time she was also mindful of the costs involved in buying a property such as downpayment, valuation fees, legal fees, agent’s fees, insurance, loan instalment and interest. Thus, this case was designed to analyse and discuss the current situation of Noor Aziah’s business, to explain the financial and non-financial risks that she might face and finally, to come out with a suggestion on either to buy or rent the commercial property.