What’s wrong with buying a secondary property today?

New Home

My first property, a 730 sq ft apartment was purchased from the secondary market for RM123k. That was 13 or 14 years ago. I spent RM25,000 on renovations and electrical goods. Yes, only RM25,000 because it was
already a renovated unit.

The current home I stay in was also bought from the secondary market over 3 years ago for RM540k. It was also fully renovated and furnished. For example it came with even a twin-door fridge, 6 air-cond units and built-in cabinets throughout the home. The total renovation expense for this current home was just RM10,000. I retiled two out of three bathrooms because I did not like the original colour. The reason I bought from the secondary market is because I needed a place sooner rather than later. First property was because my father-in-law pressured me, else he would not allow me to get married to her daughter. Current home was bought because after moving from Penang to KL, we stayed in my 1,053 sq ft home in Kelana Jaya and my wife said she wanted a bigger place. Our daughter needs a proper park to run around too. Thus, if we require a place fast, secondary property market is a great choice.

Beyond just speed, actually secondary properties are good for the following reasons:

What you see is what you get, usually.
 This is not buying off a shiny brochure and completed only 36 months later. This is a real property that you can view, touch, feel and even SMELL. So, there are usually no surprises. Just remember to switch on the lights and turn on all the taps to see if everything is working too.

It is COMPLETE.
Do not worry. There is no chance for the developer to run away with your money halfway or even stop building due to some unforeseen circumstances. For this one, the day you get the key, you know you are walking into a completed unit and you need to only think about making it awesome.

Savings, lots of savings.
Buying a renovated unit for example saves you lots of money. Well, unless you need to do lots of renovations or you hate the renovations done by the previous owner. (If you hate the renovation, perhaps don’t buy?)  As long as you are buying a unit which has been occupied, chances are the owner would have done a lot for the unit.

Choices for negotiation.
As there are choices, prices are more flexible. Negotiations are usually possible because the real estate negotiator representing you can help as well. If it is advantageous, show them the transacted prices of other units and get a better price. Here’s one site for you to check.
brickz.my

Location decision
. It is possible to drive around the neighbourhood and see the things you like and dislike before deciding. Usually, we could buy into a location we like or familiar with. In fact, we can even survey the neighbouring units too. Are there units which are doing some ‘unbelievable’ stuffs like painting the whole unit into some special colours?

Rental advantage.
 If it’s buying with the intention to rent, then only secondary unit provides almost immediate returns. Besides that, for young professionals, it is possible to buy a unit and rent out the other room for extra income. The rental income helps a lot with savings for the next unit.

Usually cheaper in price.
 Just compare similar sizes and types and you may notice that some secondary units are actually cheaper than buying new. Well, that’s also because people love something new and not secondary. A cause from perception too.

Before you rush to buy a secondary unit instead of a new one, do note the cons of buying a secondary units yeah. There’s no such thing as everything rosy. 🙂  (Unless you are Phua Chua Kang’s wife)

Cons

No special deals.
 Many developers may provide special deals now and this is something extra that secondary property owners will not give you. 😛

Not latest design.
  From external, the paint may even be peeling off. They are secondary units. Depending on long they have been in the market, they do not usually look modern.  They may not have inifinity swimming pool on top of the building giving you great views for example.

Choices of units.
 You would usually have lesser choices compared to a new development. In a secondary market, it is almost certain that the number of units up for sale is limited. Thus, it is not easy to get a unit with a view you like for example.

Maintenance costs may be higher.
  Depending on the number of years, it may require some maintenance especially the electrical wirings and pipings. Best to do them before we move in, else it is very troublesome later. That’s why it is a must to try all the switches as well as switching on all the taps and let it run for a while to see if there are water leakages seeping through the wall for example.

As someone who has purchased both secondary and new units, I can safely assure you that both have their pros and cons respectively. Choose one which you feel
gives you more advantages
 and you will enjoy your home sweet home in the near future. In terms of price appreciation, both would appreciate too. Imagine if our property prices remain stagnant, then no one would buy and no one would sell too, since there’s really no advantage whatsoever. Happy buying one.

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written on 9 Dec 2017

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Secondary property can be primary choice but money is still needed

EdgeProp has this article,
“Can’t afford a home? Turn to the sub-sale market.”
 I think this makes a lot of sense and has written on this topic a couple of times. One earlier article:
Secondary property not necessary a secondary choice

Quoted in the Edgeprop’s article was real estate and investment writer Dr Azizul Azli Ahmad who said that prices of sub-sale units are often cheaper than their primary market counterparts. He shared an example by sharing, “For example, a secondary condominium unit in
Bangsar
 is sold for between RM600 and RM1,000 per sq ft, compared with a newly-developed condominium unit that sells for  RM1,500 to RM2,200 per sq ft.” Then, Edgeprop quoted a search in their own listings to yield listings such as a 758 sq ft freehold apartment at Taman Sri Kuching, Jalan Kuching, with an asking price of RM200,000 and even a 950 sq ft leasehold two-storey terraced house at Jalan Rejang 10,
Setapak
, with an asking price of RM180,000.

Dr Azizul also said, “In addition, secondary or sub-sale homes are ready to be occupied, have easy access to facilities such as shops, and they [the buyer] can also deal directly with the original owner if there is damage to the house during the buying and selling process.” The next comment by Komuniti Pejuang Hartanah founder Ahyat Ishak is something which I think is affecting most potential buyers all over the world and not just Malaysia. I have just learnt about a distant relative who started working in Hong Kong last year and has been using her earnings to travel to many places. The salary she is earning in Hong Kong is definitely high because both my ex-staffs based there has a higher salary than me; the one who signed their offer letters. However, all these spending meant that this young relative has no savings at all despite earning such a high pay (when converted to Ringgit). Coming back to Ahyat’s comments. He said major reasons for these younger folk’s inability to buy property is because of their
expensive lifestyles, where the latest gadgets, fashions,

and travelling took precedence over savings for the future. BINGO.
This is the full article in Edgeprop.

Source: iproperty.com.my

Beyond Malaysia, we also have some property experts in Australia saying the same thing about how the young are spending their money today.
‘Luxurious’ coffee and avocado toasts? Skip it to be rich!

Oh yeah, a search via
 iproperty.com.my
 would reveal that choices are definitely still aplenty. The question is always based on ‘acceptability’ once the affordability part has been solved. Remember also that buying secondary meant that we can move in and make it a home sweet home soonest too. Yea, my first property was also a secondary one and I stayed there for 4 years. During that time, my brother, my sister and even my brother-in-law stayed rented a room from me for different periods of time. Happy considering and remember, secondary property can still be a primary choice for many. Just get ready the money part too. Cheers.

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written on 22 Feb 2018

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Secondary property not necessary a secondary choice.

A young lady friend called the other day to ‘date’ me for supper. Too bad, I was in Ipoh, followed by Hong Kong for a business trip and then Singapore for a 5-day family break. She was considering a new property versus a secondary one. She asked me which one would be better for her. I asked if she needs a place to stay now or she is okay to wait for a few years down the road. She said it would be good to have a place to stay now but she is worried about all the issues with secondary properties. For example, she may not like the renovation and thus the cost of renovations may be even higher than new properties. In fact, she’s also worried because secondary properties are older and tend to have more issues. For example, burst pipes, peeling paint job (external) and even the maintenance of some of its facilities!
Maintenance is key to secondary high-rise property

I told her that there are also disadvantages of buying a new property from the developer. For example, no one knows if the development would definitely be completed on time or at all. Of course, the chances of that happening these days would be lower today. In fact, it’s hard to argue or take actions later when what was ‘promised’ was not what was delivered. Do note that if the promise was not specifically stated in black and white, we would have to accept what was built. The prices of these primary properties would already be taking into account the potential future prices too because the developers would also have to factor in the cost increases etc.

The good thing currently would be that the developers would definitely try their best to sell currently which meant better overall packages being offered to buyers. Do note that even when the property is completed, it does not mean we can immediately sell because at the same time there are also many units up for sale. In other words, we may not be able to sell fast. In this case my young lady friend should have no issues because she will be staying but moving in way too soon before everyone else would also be a little scary. My main reason for buying from developers would be if the prices they offer are really extremely attractive or perhaps close to the current prices within the area. Then the purchase would be a calculated risk.

The advantages that I could share with my friend is that buying secondary means you see everything there is to see. Touch, view and feel the whole development. Do you like it or do you not? Besides that we can drive around the neighbourhood too. Oh yeah, check thoroughly too!
12 tips on inspecting condos

We are also able to determine if the price we are paying today is below or above the market price too. Just go to the usual property portals to check it out. For the luckier ones who has good real estate negotiator serving you, there may be units which is way below market price! For example, expats who are leaving is not likely to negotiate too long. Who knows, you may find a unit which you love even the renovations! Or at least grow to love it because if you do not, you would have to spend lots of money for it?

Well, there are disadvantages too. Cost of acquisition tend be higher. For example, Sale and Purchase Agreement (SPA), loan documentations, and stamp duty too. You may need some serious renovations. That wall colour, that wall itself and even those ‘classic’ kitchen cabinets? The owner may even ‘chicken’ out and not sell, after you have viewed it three times and checked your finances 10 times. Most of the time, a leasehold secondary property may take a long time to complete and thus not necessarily be by far faster than a primary one. Last but not least, the potential for a bursting pipe is there and there’s no warranty period. 🙂  I told my friend to decide by herself. The feeling of owning something new is special but the time needed to own a secondary may mean more savings since she is paying rental today. Happy deciding!

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written on 20 Mar 2017

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Secondary residential property market recovering in H1 2021

A close friend just asked me an hour ago about her current tenant (a friendly couple) offering to buy her condominium unit in Penang. The tenant told my close friend that they loved her unit and asked her for the best price she could offer. At the same time, they found a unit at the same development for RM750k.

I told my friend, “If you need the money to invest into something else and it’s a profit, then can sell. Else, ask them to go buy the other unit.” The reason I say so is because this is indeed a great time to sell IF we have another investment we are eyeing. Else, if we sell and then leave the money in the Fixed Deposit, chances are the returns are likely to be lower versus waiting for better times.

My friend’s final decision? She will tell the tenant to go for that RM750k.  She was not ready to offer the same price to the tenant. By the way, this is indeed what’s happening in the secondary market yeah. We have buyers who are still keeping their job and they are thinking of buying. We also have owners who could sell or could hold and that’s a choice. This is why the secondary market is so vibrant. This is also confirmed by iProperty.com.my too.

Their latest press release as below: (Full article here)
  iProperty.com.my today revealed that Malaysia’s subsale residential property demand experienced positive growth in H1 2021, rising to +19.2% from -2.5% in H1 2020.

Premendran Pathmanathan, General Manager for Customer Data Solutions & Quality, iProperty.com.my said, “It is encouraging to see recovery for the subsale residential market in H1 2021. The COVID-19 pandemic did not adversely affect this segment as it did in the first half of last year where the H1 2020 demand figure dropped into the negative region.”

Increase in home loan applications and positive demand for all property types

The double-digit demand growth does not only represent an increase in property interest. Homebuyers also took follow-through actions as many applied for home loans in H1 2021, expressing genuine purchasing interest.

Premendran continues, “The upward trend of approved home loan applications is promising. It shows that financially abled Malaysians are still interested in purchasing homes either for their own stay or for investment purposes.

Kuala Lumpur’s affluent areas holds steady

Kuala Lumpur posted an +8.1% growth in subsale residential demand, compared to +0.3% in H1 2020. The asking prices in affluent areas such as Damansara Heights, Sri Hartamas, Mont Kiara and Desa Parkcity are more likely to be higher as these are prime areas for wealthy property seekers.

Demand remains high for suburban areas in Selangor

Selangor’s subsale residential property demand grew by +17.6% in H1 2021, mainly driven by the +20.7% YoY demand increase for terrace houses (+3.5% for asking prices). The state’s suburban areas remain the top choice seeing that the working from home trend is here to stay and consumers are interested in affordable, spacious properties.
Their latest press release as below: (Full article here)

Property market will always be supported because demand for home will be robust

There is really no need to wait for any surveys. Just ask 10 friends if they have a home, yet? Ask the ones with a home, will they upgrade if they found a better property at an attractive price. For the ones who are older or have university going children, ask them if they will help their children buy a property. These are just the demand for properties among our friends yeah.

We have yet to include the fact that every year, we have 250,000 fresh tertiary education graduates too. The only reason they are a little delayed this time in moving to all the major cities is because of Covid-19 lockdowns. Imagine, if it’s back to normal and they move to the bigger cities. Then, demand will be back to normal yeah.

This is why demand for residential property will be robust. Well, at least until the time when our population of over 60 year olds are over 25% of the population. Then, the demand does NOT drop yeah. The demand changes…

Happy understanding and nope, there are NO LINKS below for you to buy any property. Cheers.

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Secure and protect your wealth – Part 1

This is a duplicate of an earlier article, changed title for easier reference as a series.

I always believe investment is the only real key to financial safety. However, are you covered during this journey towards financial safety? Note, I am not even talking about financial success or financial freedom. Thus, I have some of my money in FD, a little bit in unit trust, a tiny bit in my own version of blue chip stocks, some properties and of course to protect my wealth I have insurance. A complete set of my life planning consists of medical insurance, illness insurance, whole life insurance, education, lastly savingzs and investment. In short, refer to the chart below. Today, let’s start with Medical Insurance.

Medical Insurance. You can be earning RM5,000 per month, have a healthy savings of 50% of your income every month. Yet, if you suddenly found out that you have kidney stones and needed a few ESWL treatments, it may cost you up to RM20,000 depending on which hospital you go to. This has just eaten up your savings for 8 months. However, if you have invested in a good medical insurance plan, at most it will cost you one month’s savings and you can still claim if you are hospitalized again. You only pay for the hospitalization charges such as government tax, uncovered items and core insurance on your medical card. Of course, if the insurance coverage is insufficient, you would need to fork out the balance. For medical insurance, you enjoy the medical benefits but of course the payment goes to the doctor directly and not to you.

Yes, it is true that majority of us would have a medical card given to us by our companies but please be reminded that should you stop working, the card automatically lapses. The older you buy, the higher premium that you would need to pay. Personally, besides my company’s medical card, I have also signed up for another medical card. I feel that this is an investment to cover myself financially. No interest earned but ‘touch wood’, if something were to happen, it will cover majority if not the whole bill from the hospital.

Part 1 – Jointly written by Crystal Teh and charles on 5 March 2014. Part – 2 to follow in a few days’ time.

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Secure and protect your wealth – Part 2

Illness Insurance. No one in right frame of mind would tell you I want to get sick. However, can you predict for sure when would you be falling sick? Or worst still your illness is a critical one? For example heart attack, cancer, stroke, kidney failure and etc? With an illness insurance, you are able to get a lump sum of money from the insurance company. Based on the package that you purchased, the insurance company will indemnify you accordingly. You can be covered up to RM1 million or for some up to RM2 million.

This insurance serves many purposes. It could serve as an income replacement to replace a person’s income when a person loses the ability to perform a job after suffering from a critical illness. It can help the family as a debt cancellation for house loan, car loan and even personal loan. Do not let the family suffer just because of a critical illness. Besides this, it could be a backup for insufficiency in coverage or uncovered items on your medical insurance. For example, medical insurance allows for kidney failure operation and outpatient kidney dialysis but not operation to transplant a new kidney and supplements.

A real life example. Crystal’s aunt had kidney failure when she was only 38. She started dialysis which costs RM3,000 per month not to mention the pain of doing it three times a week. This would cost her RM36,000 per year and after every treatment, she felt tired. Thus she took stem cell supplement to help her lead a more balanced life after all the dialysis treatments. This stem cell costs her RM50,000 per set. After waiting for 2 long years, a matching kidney was found and the total cost for the kidney operation was RM300,000. Fortunately for her, she was covered by a RM500,000 illness insurance. With this, she was able to cover the whole cost of the kidney operations and the balance can be used for supplements etc.

There is no guarantee that you will enjoy the illness insurance coverage. Personally, I do not want to have to use it. However, buying a coverage? That’s a foregone conclusion; Yes. You should buy yourself an illness insurance coverage.

Jointly written by Crystal Teh and charles on 8 March 2014

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Security? Just like Trump, we want to feel safe too.

It’s not an
easy time for the U.S. Secret Service.
They need more $$$ in order to continue protecting their President. Reason stated was that the current President has many homes and a large family. (Perhaps this could be used as a reason for the U.S. Presidential election in future? Vote for me, I have a smaller family…) According to the article, 42 people in Trump’s administration have Secret Service protection, including 18 members of his family. Let’s assume each of these 42 people are protected by just two agents and there are two shifts per day? 42 x 2 x 2 = 168 Secret Service agents needed. (By the way this number is conservative. Just look at the number of security details that the American President had when he was in Malaysia back in 2014. His entourage then passed through my office…)  As per the article, a special agent could earn up to US$160,000 per annum. (RM683,000). They are asking for it to be increased to US$187,000 (RM800,000) That’s RM800,000 x 168 people potentially. RM30.2 million per annum.

When it comes to our home sweet home, we want to feel safe. I say ‘feel’ because there’s no guarantee. Whether it’s a gated and guarded community or an old development with a boom gate or even a neighbourhood where everyone knows everyone, we will still lock our doors because we want to feel safe and because we want our family to be safe. This is true for any high-rise community, whether one with many layers of security to one with easily 12 guards per session or even just one guard, we want them because we want to feel safe. It is true that regardless of how safe we feel, there is always a chance for the home to be broken into, like my friend’s condo just recently. So, it’s definitely not true that high-rise will always be safer when compared to a landed one. By the way, even with the Secret Service, the President of the United States is definitely not 100 percent secure yet.

In the near future, I believe safety will be the single most important factor that all potential buyers will ask well in advance before they buy. They may prefer to have some official statistics in order for the developer or the real estate agency to convince them. ALL property sites would have reviews about the crime rates within the neighbourhood in which the development is in.
Here’s one such example from propsocial.my
 about crime level. For advanced property markets such as Australia, there are more available information about crime level. A good article here:
www.finder.com.au – How to research crime in a suburb before buying a home.
 Everyone knows London is an international property market of the world. They also have these information published and made available for references.
www.propertydetective.com – Crime Rate in London – How bad is your borough?
 For now, perhaps a check with the locals around the neighbourhood may be a good reference. As for high-rises, looking at how tight the security is during our viewing would provide a clue. Just like Trump, we want to feel safe too. (We just do not have Secret Service agents surrounding us like him)

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written on 27 Aug 2017

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Security? Safety? Gated and Guarded. ‘Checked’

One evening way back in the year 1999, I left my first notebook INSIDE a backpack INSIDE my car. My car was parked INSIDE a landed semi-detached home in Georgetown, Penang. It’s considered a safe neighbourhood and I have never heard of any break-ins before. Well, I found out that my car was broken into and my notebook stolen. These days, my backpack goes to everywhere I go and I will walk back to the car to take my backpack with my laptop inside even if it’s a 10 minute walk under the hot sun. You can call it the “Once stolen, forever not forgotten” syndrome. Actually, this is also the reason for the popularity of gated and guarded developments. Assuming we want to look for one, how do we evaluate if it’s PROPERLY designed as a gated and guarded community? Here’s a very good article from
iProperty.com.my by good friend Reena Kaur Bhatt.

We should be savvy yeah because even the article says, Gated & Guarded is no magic bullet for crime. Some key points I picked up include looking at the actual scale model of the development. There should be lots of open areas to allow for natural surveillance because this is how everyone can help everyone as the “the eyes on the street” There should be proper walkways and sufficient lighting. Usually, newer developments these days would incorporate these into their design which is a plus.

Secondary safety measures include security guards. I personally would feel worried if the security guards could not understand me or if there is just ONE of him plus he does not look to be fitter than me. I know, these days proptech has allowed security to be enhanced but I still feel safer with security guards who could communicate with me when needed.  For developments WITHOUT a proper guardhouse, I will personally skip them. Frankly, if they could not treat the guards well, how are we supposed to believe the guards will treat us well?

CCTV is the 3rd thing mentioned. This usually prevents many potential incidents right from the beginning. The chances for any crime to happen is lessened once the criminal knows that someone is watching. This brings us to the question of, ‘is someone really watching?’ plus are the CCTVs working? It’s good to ask to take a look when we are viewing the potential home to buy.

Nearby police stations or fire stations are mentioned which is a great plus to have. These days, some developments even have auxiliary police as the security force which is a definite plus.

Last but not least would the actual fencing used. I have gone to many of these gated developments where there are holes in the fencing! Well, the guards stationed in the front of the development may not be able to know if a criminal has entered your home if it’s not near to the guard post. Driving around the gated development would give you an idea if proper fencing has been used. For the higher end ones, usually even the fencing has CCTVs too.

Personally, I think it’s very important to also lock our doors, windows properly. Grilles are a pretty good deterrent too because if the criminals need a bit more time to do their work, they would usually skip our home and move on to the next one. Last but not least, always tell our family members not to open doors or even stand too close to the grille when speaking to strangers. Oh yeah, even for gated and guarded communities, I would still advise everyone NOT to leave your backpacks in the car yeah. Happy selecting.

Please do read the article in full for better

explanation by Shamir Rajadurai
(www.PreventCrimeNow.com)

written on 24 April 2018

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See you in Kota Kinabalu: HOC 2019 – “10 things a first time home buyer must know.”

I think this is the first time I am speaking in Kota Kinabalu. I love Kota Kinabalu and has been travelling there at least once a year ever since I married my Sabahan wife. She’s from Sandakan. The event that I will be speaking in is Home Ownership Campaign Expo 2019 organised by Shareda and Property Hunter. The venue is Dewan Foo Chow and my topic for this talk is aimed at first-time home buyers but the content is very good even for property investors. “10 things a first-time home buyer must know.” Some of the topics within the talk include: ‘Is a property bubble coming?’ ‘How much will property prices be dropping?’ ‘Is Malaysia facing a recession in 2019?’ and more… The banner as below for reference.

Earlier article on this event here:
Sabah: Home Ownership Campaign 2019: (Do not miss this)
 Besides me, there are many other good sharing which I think is great since all these people are speaking to you without charging a single cent. In fact this one looks very interesting to me. “Why should you invest in a house before turning 30?” by Mr. Chew Sang Hai, President of Shareda. Truth is, the earlier we start the better it will be but without any doubt, it’s worth nothing that to start is better than not to start at all. Many may argue that property investment may not yield high capital appreciation but when we look at the property price trends, we will have to agree that it is a good hedge against inflation; depreciation of the value of our money. See you all.

written on 27 Feb 2019

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Segamat roasted kopi by Oriental Cravings in 1 Utama

My wife and I were exhausted, hungry and thirsty. we wanted to go to News.com cafe where magazine were provided for free reading. However, we chanced upon this cafe, called Oriental Cravings. As it was already 5pm, we decided to just take the toast and drinks. I saw something interesting, ‘Segamat Roasted Coffee’ in the menu. I ordered hot but then I thought, I better try the iced one because I wanted to see if it’s thick enough to last till the last drop even with the ice.

The toast bread came, with a piece of butter and a small ‘container’ with pandan kaya. Both butter and kaya were great but the bread was not ok. Perhaps too thick. I feel for toast to be great, the bread should be as thin as possible so that you have the ‘crack, crack’ feeling when you bite it. The Segamat iced coffee came. Nice. Sufficient coffee taste, not too sweet. And yes, it was good till the last drop which meant it was thick enough. Kudos to a cafe which is not actually serving coffee as its main specialty. 🙂

No comments on the food, did not order any but the choices are aplenty and even at 5pm, there were many tables ordering their oriental cravings!

written on 4th jan 2014

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Selamat Hari Merdeka 2021 my dearest Malaysia

One poster says it all. No other words can describe my love for Malaysia. How I longed to come back to Malaysia after completing my studies in the UK. How I will not shy away from any ‘debate’ if someone were to say something wrong about my country.

Well, it’s 31st August 2021 now. Happy Independence Day Malaysia. Thank you for giving me a home sweet home. I do not love everyone here but I certainly love you my dearest Malaysia. May you continue to prosper too.

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Selamat Hari Raya Aidilfitri from kopiandproperty.com

1 Syawal disambut gembira,
Walaupun tidak bersama,
Video call lah sambil ketawa,
Yang tersayang, semua diingati,
Yang jauh di rantau, semua dirindui,
Setiap hari, tersemat dalam hati,
Selamat Hari Raya Aidilfitri,

Dari kami kat kopiandproperty.

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Selangor property? Average price RM442k – Q1 2015

All charts were provided by Michael Geh , Senior Partner of Raine & Horne and also the Vice-President of FIABCI Malaysian Chapter with numbers from NAPIC.

What’s your hunch about property market in Selangor today? It’s okay, since majority are quite negative anyway, let me confirm that you are right. Total number of property transactions in Selangor fell in Q1 of 2015 vs Q4 2014.  From a total of 15,613 in Q4 2014 which was already a slight drop from Q3 2014, it dropped a further 869 units to 14,744 units. Average price has remained virtually unchanged. From RM441k on average in Q4 2014, it is now RM442k on average in Q1 2015. As usual, do note that average number here simply meant that there are higher priced properties as well as lower priced ones and it does not mean every transacted property was RM442k.

In fact for properties which are 1,000sf or higher, there’s barely any at this price range or lower. Even the SOHOs are priced higher and affordability is now pegged at RM500,000 or lower. Looking back a little would reveal that the final peak before everything started coming down was in Q3 of 2012. Taking a 4 year view meant that the new units bought then should start being delivered in 2016. Perhaps this may mean that prices for certain units would remain under pressure for some time more.

Always note that urbanisation continues to happen and with limited land available within KL, the next growth would be all the secondary spots of today. As for whether the buyers then may suffer losses if they sell today, based on the stats, it is not likely. The average price in Q3 2012 was just RM330k.The average price for Q1 2015 is an additional RM112k at RM442k. It meant that even if the buyers were to sell a little lower than today’s price level, they should do just fine. Perhaps a consideration would be the RPGT, like what my old friend told me a few weeks ago. Read here:
Scared of RPGT but willing to wait and risk?

A word of caution, buying beyond the usual affordability level of majority would mean that whatever you buy may not find a buyer for some periods of time. Please do not buy because the agent tells you that the price would always go higher in hotspots or even due to MRT. As for the question of whether there’s a bubble awaiting to burst, I do not think so. Read here:
Spotting signs of a property bubble, 3 points (updated)

Happy investing.

written on 8 July 2015

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Selangor has 30,000 affordable units on the way.

Please know that the demand for homes are far higher than the available supply. We just need more affordable ones instead of units above RM600,000 for example. When it comes to affordable homes, the figure we hear often is 1 million
affordable homes in 10 years. (article here)
. Or the
100,000 units of affordable homes in 2019.
 Actually, I have yet to see the distribution of the 100,000 homes, I mean which state would get the lion’s share, which state gets fewer. it’s definitely not possible to distribute the units on an equal basis for all states. Here’s another announcement on affordable homes but this is by a state Menteri Besar instead of a federal minister.

Article in edgeprop.myhere.
The Selangor state government has plans to build 30,000 affordable units by 2025. Its Menteri Besar Amirudin Shari said, “So far, we have handed over the keys for 3,770 units to the people of Selangor. The rest will be built under the Selangor government’s Rumah SelangorKu initiative.” He further elaborated, “Affordable housing is one of the earliest issues the state government fights for as we want to give every Selangor citizen the opportunity of having their own home. I have instructed developers to intensify the construction of Rumah Selangorku developments so that more people can enjoy the benefits.” Rumah Selangorku is set to have 864 units prices at RM232,000 per unit and will include two parking spaces.
Article in edgeprop.myhere.

I checked. The size of these units are
1,000 sq ft which meant that the price is only RM232 per sq ft and it comes with two car parks.
 If this is the minimum standard moving forward, I think it’s really attractively priced and the only thing the government must focus must be on connecting all these new developments with public transportation so that people staying there need not drive. If they could save a few hundred ringgits every month from fuel, toll and maintenance for their cars, this helps them in paying their mortgages on time too. By the way, this is why all the MRT lines MUST be continued and that delayed LRT line be EXPEDITED too. Happy following and understanding that having a roof over their heads should be made available to all Malaysians.

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

written on 5 March 2019

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I lost a Selayang opportunity by Hua Yang

Since I wrote about this before, will write an ending to this. Earlier:
The location less loved by many, perhaps

Reported in some English dailies, Hua Yang has terminated its land deal in Selayang with Nation Holdings Sdn Bhd (Nation) to acquire 8.09 acres of leasehold land. According to Kenanga Research, the termination was said to be unexpected but not considered negative because the seller (Nation Holdings Sdn Bhd) was not able to fulfil some conditions required by Hua Yang. Thus, better break it off instead of dilly-dallying and thus losing out on other opportunities.

I was actually looking forward to Hua Yang’s launching for the project. The reason is simple. Hua Yang’s projects are mostly affordable ones and Selayang is not considered a hotspot. Thus, both these reasons meant that the new launching would have been attractively priced. Who knows, if the size is right and it appeals to me, I can buy and move there in future and thus selling off my current place for some profits? Haha. Do not attach too much emotions to the properties we own. Always remember that the correct aim should be to live comfortably. The aim is not to live in the same place forever. Agree?

Kenanga Research has put a target price of RM2.20 to Hua Yang’s share and if we refer to the current share price for Hua Yang, it is undervalued. Please be reminded though that target price is based on certain expectations and do buy only if you believe Hua Yang would continue to do well under current circumstances. Hua Yang does however have an unfilled sales of RM702 million. Gearing is at 0.6-fold levels for 2016 financial year. Want to know if they are doping well? Visit their next launch and take a look at the take-up rate. It should give you some indication of the direction that the business is going and soon, it should be reflected in its share price. Happy following or buying.

written on 17 June 2015

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Be selective please because demand will always be selective

Location, location and location
 is the key to a property decision. Everyone knows this, I believe. However, the location, location, location in the right context is not about a certain place or neighbourhood. Maybe it is the location near to our working place, the location near to our children’s school and perhaps even the location which convenient for travelling, shopping and eating. Someone working in Putrajaya ought to buy Cyberjaya for example and no matter how awesome Mont Kiara is, it will not appeal to him. Someone who needs to put his children into a Chinese primary school would have to buy some place nearest to the school, so that his children has an advantage over others who stay further away. (distance plays an important part in the acceptance consideration in case you do not know. )  Lastly, location is also one where I may need to drive 30km lesser to go back to my beloved Ipoh hometown from KL versus if I stay in Puchong, for example. This tells us that every location has their own fans and decisions are based on the reasons for choosing that location and not on the location per se because they mean nothing than just a name.

Being Selective:

Let us always be selective with the property that we buy. The reason is because demand for properties will always be selective as people are buying for all the different reasons. This is why there is no need to keep following because even in the stock market, your blue chip selection may be the choice of many while my personal ‘blue chip’ selection may just be ignored by many. (I do not buy companies with over 16 Price-Earnings Ratio (PER) no matter how big their brand is)  There is no need to follow me. I am not that successful with stock investments. 🙂

History?

An area which is NOT loved by many may still be LOVED by somebody simply because of history (he has stayed there all his life with his parents and he wants to buy a place near to them). There is one mature neighbourhood that my close friend loved to bits and my wife and I? We hate it to bits too. Haha… It may also be due to timing. When development reaches the area, the prices would usually go up. Once upon a time, Damansara Mutiara was definitely not a pearl (pun intended) but today, it is a bustling township with many amenities and huge population. Due to its population, it is covered by MRT lines too.

Comparison.
It’s really possible to compare and it’s best to compare. List down five things that is a must have. Put them into Microsoft Excel or Even Google Sheets. My suggestions? Size (The bigger the better because they will build smaller in future), Price  (Price per sq ft, the lower the better because in future, it’s impossible to build when price per sq ft is too low), connectivity (Both expressways and MRTs / LRTs (the more the better), distance to office (use google map DURATION as tie-breaker), Distance to other conveniences.

Oh yeah, to check out some condos?
Here are some tips.
I know many love primary properties because it is newer. Somehow, it’s more satisfying emotionally.

If you need to inspect a secondary condo instead, here are some tips too.

It is good to note that when we love a certain area, acceptances of other areas would be harder. That’s why prices for popular areas tend to rise faster before it is followed by
nearby secondary areas.

What this tells us is that as long as we are buying nearby some popular areas, as long as those areas increase in price, rest assured that ours would too. I define less than 10 minutes as nearby. Happy selecting as what you demand is definitely a selective choice.

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written on 18 Dec 2017

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choices, choices, choices, really

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Should I sell since my rent could not cover my mortgage?

A good friend asked me recently this question. She has a condo and she’s upgrading to a landed. (Haha. Ok, ok… condo to landed is considered an upgrade for this article.). She said, “I am moving out and the potential rental for the condo is insufficient to cover the monthly mortgage plus the maintenance fee. I think the best option is for me to sell and use the money to settle as much as possible for my new landed home mortgage, right?” I told her, if that’s what you want, of course it is okay. In fact no right and wrong yeah. Satisfy own preference. Debt-free is always a good option. Anyway, how much is the condo’s current price and what’s the negative in mortgage like? She said the condo is probably worth RM500,000 and the negative per month should be around RM600. Let’s look at some numbers yeah.

The average property price increase for the past 26 years has been over 6 percent. Image attached. We assume moving forward, this will be much lower. So that our yearly increments can catch up and enable us to purchase a property in the near future. So, we take the property price increase to be half of what has happened for the past 26 years. By the way, it may be even lower or higher, I have no idea yeah. Please ask those senior bankers, prominent property gurus or even valuers for a better idea. I am just like most of you, a working professional here in Malaysia. So, our assumption is 3 percent up every year, moving forward.

My friend’s condo is RM500,000. Negative RM600 per month. RM500,000 x an increment of 3 percent per year is RM15,000 per year. That’s RM1,250 up per month basis. In year 2, it will be RM515,000 x 3 percent up and it will now be RM15,450 or RM1,288 per month. Anyway, let’s look at the next 3 years. Image below:

Initial Amt

3% up (yearly)

Monthly

Negative

Net

Year 1

500,000

515,000

1,250

600

650

Year 2

515,000

530,450

1,288

600

688

Year 3

530,450

546,364

1,326

600

726

We can note one thing. The negative remains at RM600. Actually, rental will increase slowly and is not likely to stay stagnant. The only issue is that the negative number (lower rental yields) may also increase in the future if the property price rises faster than the rate of increment for rental. This is the reason why the rental yield for a property which is increasing in price will always be low or even negative. Only if the property price does not move much and the rental keep going up that the rental yield would show a positive number.

I know, there’s also those other assessments like Indah Water or the local councils and even the typical wear and tear if we rent out the unit. This is a risk that comes with property investment yeah. Hey, the property price may even drop if there’s a crisis unfolding. On a longer term though, as shown by all advanced property markets, the property prices will recover and go up as years pass by. At the end of year 3, the same property at just 3 percent up would have increased to RM546,364. As for whether my good friend should sell or still keep, it’s for her to decide lah. Lowering one’s debts will always be a good choice.

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written on 12 July 2018

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Sell to buy more or keep getting rental surplus?

During Ho Chin Soon’s latest book launch recently, I was chatting with a fellow property investor who told me that she was facing a dilemma. She has an apartment which has
appreciated in value
 which is great. The apartment  can be easily rented out as it is nearby a private university. She does not know if she should keep renting and get the small surplus every month or sell and perhaps use it to
buy another potential unit
. Just relying on savings from her salary would mean she needs to wait for many more years before she could buy another.

I shared my views as below. We should focus on having
good rental income
 one day. Yes, I repeat, one day in the future. For example, when we are 45 or when we are already very comfortable and may not want anymore risks, even calculated ones. As of now, since I have yet to reach 45 years old, I would focus on increasing the number of properties first. Thus, it’s calculated risk and a focus on the potential capital appreciation instead of being too fixated on the surplus or the negative numbers every month. Note, if we already have say 10-15 properties with rental incomes, I think it’s best not to do much. Just sit back and relax. However, if we have just started, it is better to
own more units
 instead of staying stagnant and hope.

Last year, I sold a
leasehold condo
 which has appreciated nearly 2.5 times from the price I paid for 7 years ago. The rental was giving me a surplus of around RM200 which I think is considered extremely good. If I sold, I could have enough capital to buy two other units of affordable secondary condos or even apartments. Thus I sold. Yes, it’s also possible to refinance and that’s an option to consider as well. If you feel that the potential for capital appreciation is still there for your property, then perhaps a refinance may be a good strategy. If however you have identified some other better properties and your current property is already pretty highly valued, it’s best to sell and buy two more higher potential ones instead.

Do note that there is no such thing as the
best strategy
. Understand what you are aiming for, do the calculations and make your decision. Worst case? You did not sell, you did not do refinance and you continue to enjoy that surplus of RM200 for another 5 years and suddenly realised you have wasted many productive years. I am only speaking for people who maybe less than 45 years old. Truth is, once I reach a certain age, I think I would prefer a rental surplus instead of taking more calculated risks. We shall see at that time. Happy deciding.

written on 111 Dec 2015

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Sell your property faster – 6 tips

After a few years of owning the property, the price might have appreciated. You may need the money for another new investment. You want to sell so that you can upgrade. There are a lot of reasons why we want to sell our home or property. Today, let’s look at just 6 important tips. I know, there are never ending tips, some say 10, some say 15. I think I will share 6, at least for this article.

1)  Decision without Emotion – You may have feelings for the property but objectively, your buyer does not. You may want to sell as high as what the highest in the market is selling but objectively, your buyer wants to buy at the lowest point. Look, if you are selling for a profit, the slower you sell meant that you lost opportunity to also use the profits for other investments. Decide what’s the price which can sell. There’s no such thing as maximising the price etc.

2) Timing and your property’s attractiveness – Are you selling at a time when the market is slowing down? For example, now? If answer is Yes, ask yourself the second question. Would you rate your property as above the average? Clean, renovated etc? If it’s slow your property is just like any other average properties, do set a price which is very slightly below the average price of all other properties. The Rm5,000 will not kill you. Let it go.

3) Impress the buyers – Making sure your property is in its best condition helps. New Paint helps tremendously but as long as your paint is still looking acceptable, then chances are it is ok. Fix any lights which are not working. The toilet flush may need just RM50 to fix but if your prospective buyer could not flush after he has gone to the toilet, you have just lost your sale.

4) A good agent helps. It’s not easy to know who’s great, who’s not. If you really have no friends who can recommend you one, just go online. Search for the project you are selling, look at the agents who are selling. The good ones usually puts more effort; more pictures, more explanations, a nice photo of himself or herself etc. No guarantees but it’s better than any Tom, Dick or Harry.

5) Messy is a no-no. Yes, when it’s your home, you can leave the newspapers lying around. However, when you have prospective buyers, make sure you tidy the place up. Buyers buy due to emotion, definitely not the price because your property would not be the only one on sale. Prices are also not that big a difference. Thus, if he feels good, he buys.

6) Cleaning up is important. If you hate it when you are viewing a show room and everything is dirty and dusty, why do you think the prospective buyers would not hate it? If you have never had the habit of cleaning, it’s ok. Spend RM100, hire two of those temporary maids for 4 hours and get them to help instead. Investment is needed for a better ROI. Sorry, I did not mention things such as renovating your kitchen because it’s already too late for that. You would only be able to sell to people who would love what you have and remember, if the buyers are coming to view, it means they have interest. I have not seen too many buyers who just wanted to view for fun. These people typically likes to watch the latest TVB series instead of viewing properties after properties and not buying. Happy selling.

Written on 22 February 2014.

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You want to sell your property? Here are 6 reasons for you.

Many friends love to ask if they should sell their property now? My answer has always been “do you have a reason to sell your property now?” I am serious. If your reason to sell your property now is because you want to put that money into the bank, then maybe think thrice. FD rate is only 2% or lower yeah.

If the market is going to get worse very soon, it may be a little late to only think of selling the property now. Selling a property usually takes months to complete.

For this article we assume you are an owner who could still hold on or you could choose to sell and that selling is just an option versus someone who’s struggling to repay the mortgage every month. If you want to sell your property faster,
Here are 6 tips to sell your properties faster
. If you just need 6 reasons why you may want to sell your property now, then please do read on.

#1 – You really hate that property that you currently own.

You do not wish to drive there because somehow you hate the design, hate the neighbourhood, had a bad experience renting that home out or somehow it has bad fengshui and you could feel something is wrong with it. If this is the reason, wait no more. Quickly engage a real estate negotiator (REN) and let someone else own that home and you take their money instead.

#2 – You want to invest the money into some other investments

If you found another investment which could yield a higher return versus this property which is not generating anything, better sell quickly. Depending on which book you read, any property which is not giving any positive returns is a liability and you should just sell it and move on. Anyway, if this is the advice, I think at least half of all the properties bought a just a few years ago would never have positive rental yields…

#3 You need the money to do whatever you like to do

Let’s just understand that sometimes, we just need the money to do something other than investing. It could be anything and it does not even need to be another investment. Sell the home, take the money and you could use it for any purpose you like. Holiday with family? As long as you need the money now and could not wait any longer, then by all means, sell your property now please.

#4 Many prominent people said negative rental returns are bad

Your monthly mortgage is RM1,500 and you will have to start paying it again soon even if you have taken the moratorium a few months earlier. Your rental is meanwhile just RM1,300 and once you add up the maintenance fee, then it’s a negative of RM400 every month that you rented it out. If you sell, then you stop losing RM400 x 12 months which will come to RM4,800 per year. So, if you believe negative returns are bad, then take action; sell your property now. (I do not agree to these prominent people yeah. It’s not such a direct comparison)

#5 No Real Property Gains Tax (RPGT)!

Under the Penjana incentive. You could now sell your property even if you have bought it less than 5 years ago and there’s no real property gains tax (RPGT). None. Zero. Nothing. That’s a lot of money too. Bought RM300,000. Sold RM500,000. Gross profit of RM200,000 and if you get hit by a 10% RPGT, that’s RM20,000! Year, it’s actually enough for a family of 4 to travel overseas (next year lah, not so soon).

#6 You have a really good offer.

It’s tough to get any offer close to the market price in the current market. So, if you have a good offer which is not just on the market price but maybe even above it, it may just be the time to take that offer. Just remember to check what’s the actual market transacted prices lah.
Buy with reference to transacted price is possible
 Do not just listen to your friends or look at market listings which does not mean it will ever get transacted.

So, if one of these 6 reasons happens to be one of your reasons, then yeah perhaps it’s time to sell your property now. Remember to get a good real estate negotiator (REN) yeah. They will not just make things easier but may even teach you what to do prior to selling your home which will make it sell faster too. Oh yeah, besides these 6 reasons, if you just like many, many, many more reason,
here’s a google search result for ‘the best time to sell your property.”

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Sellers, market is good for buying. (think about it when you sell)

A good friend told me about his landed terrace 6 months ago. He asked what’s the price. I referred to
brickz.my
 and told him the price. He said, ‘BUT the MARKET price is higher.’ He proceeded to show me listings by other units which are above his asking price. I told him that when it comes to a property listing advertisement, we can put any price we like. It has NOTHING to do with market price. When it comes to buying, only actual transactions count. No one gives any ‘respect’ to your price, especially now in a slow market.

Yesterday night, he asked me this question, ‘Are the RENs rejecting to sell property nowadays?’  I said of course not. He said after he approached some RENs and told them his selling price, the RENs went silent. No response at all. I asked if he sent the RENs his ‘market price.’ He said, “no, I already refer to MARKET price and lower my price by 10%.’  I repeated, ‘MARKET price is supposed to be transacted price. Not property advertisement listing price.’ He said, “I am sad…’

I told him that when market is slow, it benefits anyone who’s taking advantage of the situation. A seller may feel disadvantaged with the market situation but he could also benefit too! For example, we have to sell the property at a lower price but the truth is, after we sold we could also use the money to buy some other potential units at a lower price too! However, if the goal is to sell and then put the money into Fixed Deposit, then that’s another story altogether.

Of course, if we really could not accept the price, the next option is to rent but landed homes do not provide the best returns when it comes to rental returns. Just ride out the situation by covering some of the monthly mortgage. The ‘storm’ may be here today but it will pass. The question is what would be the options that we want to take today. By the way, dilly-dallying on any decision does not add anything to our bank account. If we sell with profit of RM100,000 and we put this into the FD, at least we get RM4,000 per year. Every month we delay the decision is a few hundred ringgit lost. Yes, it’s a buyer’s market today. A seller can also be a buyer too, right? Cheers.

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written on 28 Feb 2019

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Selling at a loss is definitely possible during uncertainty

Selling at a loss, would you?

Every time people ask me about falling property prices, I ask them about their holding power. “Would you sell at a loss if you were not forced to do so by circumstances?” The answer is almost always a no unless of course you were selling because you wanted to use the proceeds to invest into something else. For example, selling at a loss to buy glove stocks? WHOA, that would have been the greatest decision ever… Anyway, some owners may not be so lucky. They may be selling because they really have no choice.

Article in SouthChinaMorningPost.
According to this article, the coronavirus and the economic slump have forced some mainland Chinese owners to dump their luxury Hong Kong properties at steep losses. It quoted 10 recent transactions where the owners incurred losses of as much as HK$8.2 million (RM4.42 million).

Derek Chan, head of research at Ricacorp Properties said, “The economies in both mainland China and Hong Kong are so-so during the pandemic, causing some mainland buyers to sell their properties at lower prices and losses, because they need cash.”

This was what Savills said in a report in July, “The recurring virus outbreak and the political situation may push more luxury buyers to consider reallocating some of their real estate investments overseas, with luxury volumes in the second half of 2020 likely to fall back to previous lows.” The article quoted many examples. Please do read the comprehensive article here:
Article in SouthChinaMorningPost.

Preparation (in advance) becomes key

No one could have predicted the current situation. Of lockdowns all over the world. Of second wave of COVID-19 happening in many countries which had actually managed to reduce their initial infections down to nearly zero. This is why we should have emergency savings. It may not be enough, I know but if we have none…? We should strive to to actively build up a passive income stream. We will never know if this second income stream may just be helping to sustain us during bad times.

Property is illiquid and is a big ticket item

Selling a car is far easier than selling a property because a car is cheaper and more people could afford it versus a property. This is why during times of uncertainty, in order to sell a property, discounts to the usual market price is a certainty. When we look at luxury homes, then the number of people who could afford it becomes even fewer. This would be one major reason why the homes would have to be sold at a huge discount or even at a loss. (if it was bought at a high price in the first place).

As the price is high, It is also harder to sell too and this may make the attempt to sell becomes even more desperate. This is why when it comes to property, the decision must come with a lot of due-diligence yeah. The one important thing to note is that based on history, home prices do recover yeah. The only issue is that COVID-19 is something new to this modern world. We will just have to see what happened next year then. Vaccines are all on the way…

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Selling / Buying property, El-Nino, monsoon

To sellers who needs to sell this year, I think you better read more about El-Nino. According to weatherman, both in UK and Malaysia, there’s a 70% likelihood that El-Nino may come. If it does come, it will be worst than the water rationing we had in Selangor recently. Note, it will be worst. Thus, if you intend to sell your property and it was one of those areas without water for the longest of time, I suggest you to sell faster. That RM5,000 discount may be worth more today than when El-Nino comes because if I am a buyer and I visit your property and the toilet was NOT flushed, that’s the end of my house viewing. It may even be me who needs to use the toilet for a big business and after using found out that I could not flush! I do not think I would ever consider your property.

Of course, if your home is always flooded during the monsoon season, then you should also know when is the best time to sell your house. It is true, people may check online for forums talking about floods but nothing beats viewing your house when it floods and I needed to wade through the water just to view your property? Worst still, my car got stuck in a huge puddle of water outside your home. So, don’t wait. During dry season, as long as there’s no water rationing, you better sell your property quickly.

Okay, the above is quite an exaggeration to prove a point that for any buyers, always, check out all these things. For example, during the dry season, why not view some properties that you have always wanted to view or buy? This is also the time when you know if the area is really bad when it comes to dry season because unfortunately for everyone, the weather fluctuation can only get worse and not better. If you notice signs of water line marks on some walls of the house, whether internal or external, be pessimistic. These problems could never be solved no matter what the owner tells you about the new monsoon drain being built outside etc. There would still be hundred of properties out there that will somehow satisfy your requirements, it’s just not the one with water line marks.

A property represents a huge burden already, financially. Do not make it worse by having to deal with what you bought every few months in a year, every year.

written on 16 May 2014

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Selling Condos of RM500,000 or higher with One Desk and Two Plastic chairs

Have you ever bought a new iPhone from a stall in a departmental store? Have you ever bought a new car from a roadside stall? iPhone is RM2,500 and you expect to buy it from a nice authorised Apple Store. Irregardless of the car brand, you expect a showroom as well as a test drive. Reason being, the cheapest new car is RM25,000 for a 660cc Viva. However, today, there are developers selling a condo worth over half a million RM using just one desk and two plastic chairs! Oh yeah, plus two pieces of leaflets which are stapled together and given to you , hoping that you will take up a mortgage loan of over RM500,000. I know, many of you would buy from such developers but as a principle, I would not buy from such a developer if they are selling their ‘luxury’ or ‘low density’ condo by having a desk and two chairs in departmental stores. Worse still, it’s in a hypermarket!

The typical marketing budget for any developer is between 2-5% of the GDV. This meant that they have more than enough to do real marketing. In fact, they have enough to build a real showroom of the condo for you to see the concept in real life. This is what they do in overseas market or the more established developers in Malaysia. Do you know that buyers from UK or Australia commented that Malaysians are really awesome because we are able to buy by just looking at a few pieces of paper?!  If all buyers continue to accept this sloppy attitude from developers, of course even more developers would do the same. If the profit margin is way too little, no developers would build. Thus, please help to set a minimum expectations and ensure all developers do their best to attract us, their buyers and not the other way around, where we are persuaded to buy so easily without them doing any real effort.

Some developers are known to cut corners. Actually, the act of using just a desk and two chairs are normally what started this attitude of ‘never mind, they will buy’. Imagine, all buyers would only buy if the developers build showrooms to scale. Imagine, all buyers would visit many show rooms before deciding. Imagine all buyers asking them lots of questions and visit many developers before making decisions. FYI, until today most of the established developers would ensure majority if not everything is done right. Established developers does not need to be top 10 largest developers. I have known many smaller developers who take development seriously and build actual units and when their actual units were built, it was even better than their showroom unit!

Perhaps I am the minority but think seriously, united we can make things better. United we can help the developers to be more competitive, to pour more effort into what they do. After all, if they intend to be in the property development business for a long time, they should do the right things and not cut corners or costs. This is the reason why I visit property fairs. Oh yeah, some would then argue that due to this, the developers may increase their costs and pass them to buyers. This is definitely not true because their budgets have already included this when they planned the development. Would Malaysian developers be world class in the near future? Decision lies with buyers’ actions.

written on 20 April 2014

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Selling land to manufacturers is better than to developers

Recently, I went to JB thrice within 2 months. Once for vacation, second one for business and third one for a short break plus a speaking engagement invitation from a friend. In brief, I think JB is doing fine and just need to keep the momentum going amidst current negativity. I was in 4 different malls and all four were full of cars, whether J plater or even S plates. That includes
Johor Premium Outlet

too which I still think is the best premium outlet even as Malaysia has more of these coming up. Next one will be
opening soon in Penang.
However, I have to agree that without a faster creation of jobs, many of these new residential units may be empty since even the links are not happening anytime soon which meant that staying in JB and working in Singapore is very inconvenient to do. Then, I read something good to share.

I think this is a good piece of news for the property market in JB. The focus should not only be on building ever more homes or selling even more land plots to developers. Reported in StraitsTimes was a piece of news of UEM Sunrise Bhd’s intention to sell land plots to companies from South Korea, Japan and Taiwan. UEM Sunrise Bhd is the largest landowner in Iskandar. Its Chief Executive Officer Mr. Izzaddin Idris said, “These investments, which would help the region attract the right mix of industries and tenants, could be announced as early as the first quarter. Full article
here.

One recent deal was in June when UEM Sunrise agreed a 10.2ha plot in Iskandar to South Korea’s Amorepacific Corp, which will be developing an integrated centre for research and development, manufacturing and logistics of its cosmetics products. 500 new jobs are expected to be created from this new facility. He also said this,
“When we sell land bank, we are forgoing future development profits. But we are focusing on trying to bring industries to the region.”

I do think however that the advantages islonger term. The future development profit may increase instead of reducing once the area becomes even more prosperous from the creation of more jobs. Most of the time, when these huge companies move in, their vendors would also be moving in too, creating a spillover effect for the whole area. Let’s wait for the announcements of the actual company names coming. Happy believing.

written on 6th Nov 2016

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Selling ONE home and appointing MANY agents, is this better?

You may skip this article if you do not understand Bahasa Malaysia yeah. I missed this because no one told me about it but I think my sharing should be shared with more people. When we intend to sell our home, appointing many, many and many real estate agents really does NOT mean you can sell faster and higher yeah. So, which agent would you give your keys to? All of them? Or you wish to open the door for them every time?
If you like to understand if an agent is a good one or not such a good one, well here are some tips.
 Happy understanding.

Article in HMetro.com.my
  ANDA yang berhasrat menjual atau membeli hartanah di pasaran digesa mendapatkan khidmat ejen yang sah bagi mengelak menjadi mangsa scam atau penipuan.

Memetik laporan Bernama, Ketua Pegawai Eksekutif Institut Ejen Hartanah Malaysia (MIEA) Soma Sundram berkata, ia berikutan kebanjiran ramai ejen tidak sah di pasaran tempatan akibat pengangguran susulan impak Covid-19 selain tidak memerlukan bayaran atau fi tinggi untuk menjadi ejen terbabit.

Kata beliau, orang ramai perlu bebas membuat keputusan dan mengambil masa membuat penelitian dan penyelidikan sendiri selain jangan terlalu berharap kepada ejen untuk melakukan semua perkara itu.

“Jika mengambil khidmat ejen pula, pastikan individu itu berdaftar dan disahkan kerana hanya ejen sah dipertanggungjawabkan terhadap maklumat yang dikongsi.

“Malah, sebarang maklumat salah atau mengelirukan itu juga boleh dimaklumkan kepada firma ejen terbabit bagi tindakan selanjutnya.

“Kerjasama baik dan kepercayaan antara ejen, penjual serta pembeli juga penting bagi memastikan semua pihak mendapat maklumat sewajarnya,” katanya menerusi persidangan secara maya anjuran MIEA bertemakan Jangan Mudah Terpedaya Ketika Mencari Tawaran Hartanah Menarik di ibu negara, baru-baru ini.

Sementara itu, pengasas merangkap editor portal hartanah
KopiandProperty.com
, Charles Tan turut menekankan kepentingan melantik ejen eksklusif.

Ini berikutan tindakan melantik ramai ejen hanya menggalakkan perebutan atau persaingan sesama ejen dan menyebabkan harga hartanah yang ingin dijual itu semakin rendah.

Kata Tan, setiap ejen itu perlu mengenali kawasan terbabit dengan baik, memahami undang-undang serta arah pasaran.

“Mereka perlu mempunyai pengetahuan mengenai hartanah dan kawasan itu termasuk sama ada ia berstatus pegangan pajak atau bebas, jarak dan keadaan lalu lintas selain pengurusan hartanah, pembangunan, penyelenggaraan, kemudahan dan sebagainya.

“Orang ramai juga boleh mendapatkan pandangan pihak kedua bagi mempratikkan tindakan sewajarnya.

“Selain mendapatkan khidmat profesional, ejen boleh dipercayai dan perunding, anda perlu menggunakan khidmat peguam dan bank yang bagus untuk menjimatkan masa serta kos dalam satu-satu proses terbabit,” katanya.

Sementara itu, persidangan secara maya itu dianjurkan bersempena kempen kesedaran awam #MYREALAGENTS oleh MIEA.

Ia bertujuan untuk mendidik masyarakat mengenai keperluan menggunakan khidmat ejen hartanah berdaftar dan pihak perantara boleh dipercayai bagi tujuan transaksi hartanah.

— end of article in Harian Metro —

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Selling property with ambassadors, does it work?

Maybe six months ago, I got to know of a local developer with a project in a secondary town in Malaysia using ambassadors to sell its high-rise properties. The result was not good because even when my friend told me about the ambassador, I had to ask, ‘who is she?’ Can ambassador really sell a property? I mean it’s totally different versus a product like skin care. If the ambassador has a good skin texture, you may be tempted to buy because you want to look like the ambassador. If the ambassador is for a property project, I am not sure if I trust his words more than my own analysis. Of course, the additional attraction would be that the ambassador is a famous actor or singer and if I buy at the same place, I may be staying at the same place as them. Well, is this really a benefitt? Would they even be staying there when the project has been fully sold?

Okay, perhaps the question should be who would the ambassador be? For example, if the person is really extremely famous, perhaps it would make a difference? I think perhaps there is one advantage. When there are two properties, nearby each other, similar class but different designs and you love both, then you may just choose the one with a more famous ambassador. After all, that’s how everyone of the major brands are selling their products right? Latest one I saw would be David Beckham for H&M. If this is true, then the developers who wish to go this route better make sure they have sufficient budget to get someone ‘useful’. Otherwise, they might as well spend it on other medias instead of simply hiring someone ‘cheaper’ and in the end helped nothing like what happened to that local developer from a secondary town in Malaysia.

Final conclusion for me. Ambassadors would be at best secondary in terms of reasons to buy. All the other usual reasons remain primary and the key to the next property buy remain with the property and not any celebrity. Lastly, for the older folks who can afford to buy, they are not likely to buy because their idol is staying there. I think they are too old for these. For the not young but not too old folks like me, I have stated my opinion. For the younger ones unable to afford yet, no matter what ambassadors a developer may choose, it still does not change their ability to buy. Happy reading or buying.

written on 6 Mar 2015

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Selling a tenanted property, minus the stress

A good friend asked me two questions a few weeks ago. First question was whether it’s a good time to sell his landed terrace. Second question was how to talk to his current tenant to allow people to view the unit. It is currently tenanted.

Good time to sell?

Actually, a better question may be
WHY would you want to sell.

If it’s because you already have another investment in mind but does not have the sufficient ‘bullets’ then the answer is yes. If it’s because the property has appreciated a lot, then answer is also Yes. I define ‘a lot’ as minimum of RM200,000 or 100% from the price you paid. If the reason is because you want to sell first and think what to do later, then I propose NOT to sell until you have found a valid reason to. Of course, if the reason is to manage the tenant who’s totally unprofessional, then that’s a good reason too. Many times, tenant management is too troublesome and may be extremely stressful. His reason? He is thinking of using the money to buy other properties because the price has also appreciated substantially.

Second question.

How to talk to the current tenant to allow
people to view the property?

I told him, if it’s me, I would give notice to the tenant and once he has moved out, I will clean up the home and then only start to allow prospective buyers to view the home. Assuming the tenant agrees to allow prospective buyers to view the home, how are we able to ensure that the tenant would not share some horror stories about the property? In fact, how can we be sure that the tenant may pick up the calls from the real estate negotiator who is bringing the prospective buyer to view the home? What if the tenant agrees to the viewing time and then says he is not available at the last minute? Do we want to start a debate with the tenant then and remind him to be professional etc? Seriously, this does not work here lah….

Penny wise, pound foolish.

It’s true that once the tenant moves out, there’s no guarantee that the house could be sold within 2 weeks. It may take weeks or months, depending on what’s the price that we are willing to let go.
Here are some tips to sell faster.
However, I have learnt that time is precious and stress is bad. I do not wish to be the middleman to the tenant, the prospective buyer and the real estate negotiator (REN). I just want to let it go. Imagine the REN calls you at 4pm, in the middle of your meeting and said the tenant is not home even though he has promised to be home. He has called the tenant but no one picks up. What do you want to do now? Call the tenant? If he picks up and gives you a seemingly valid reason, do you then want to talk to the prospective buyer and ask him to come again tomorrow? Are you sure? If he does not pick up, do you want to call the REN and ask him to wait? Or Leave? STRESSFUL…. Well, this is just me. I am very sure there are others with a better way to solve these issues.

Happy selling your home minus the stress.

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Written on 6 May 2017

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Selling your home faster? Some tips. (Updated) – Usable for RENs too.

It’s not the best time to sell a property, especially a secondary one.

A real estate negotiator just told me that owners are taking forever to sell. Well, whether we are selling because we need the money to upgrade to a bigger home or we are selling because we are scared the market will crash, I think the main concern is always time. You see, assuming we take 6 months to sell a house of RM500,000 which we have fully paid for, that’s already a loss of potential RM10,000 in interest. Yes, I am serious!  RM500,000 x 4 percent interest per annum x 6 months is RM10,000. Note that this is based on the most conservative number because assuming we use some of the proceeds to buy a good stock, our ‘loss’ from selling slowly is much higher! In fact, if we had bought a
Real Estate Investment Trust giving us

7% returns per annum, we may have lost nearly RM18,000! Dear RENs, please do tell this to the owners too because most of the time, they want the BEST price but it’s at a huge cost to them… Beyond just time, the following would be things we should take note of too. Applicable to owners who REALLY wants to sell.

1) Count emotion out. – The buyer does not have the same feeling as you. You may have stayed there for many years, you may love the property, you may love the neighbourhood but the potential buyers just want the lowest price possible. It’s not about who wins or who loses. It’s just market price. Sell higher than market price and you will have to wait till all the cheaper units are sold first. Sell lower than market price and your unit should be sold first, assuming everything being equal. Decide.. ok?

2) Attractiveness of your property – Get a good REN. They would usually have access to other units in the same development and would be able to advise you on where your property actually stand. Truth is, there is no need to get 10 RENs. Just get a good one and he or she would already have all the connections to all other RENs within the same neighbourhood. If your property is truly ‘bad looking’ versus everyone else, please be realistic. If however your property is fully renovated, then stepback and objectively understand if the renovation is still up to date, TODAY.

3) Impress the buyers – Making sure your property is in its best condition helps. New Paint helps tremendously but as long as your paint is still looking acceptable, then chances are it is ok. Fix any lights which are not working. The toilet flush may need just RM100 to fix but if your prospective buyer could not flush after he has gone to the toilet, you have just lost your sale.

4) Get ONE GOOD REN – No, you do not need 10 different RENs, seriously. One good REN already have the networking with all other RENs. How to find a good one? Go online. Search for the project you are selling, look at the RENs who are selling the same project. The good ones usually puts more effort; more pictures, more explanations, a nice photo of himself or herself etc. No guarantees but it’s better than any Tom, Dick or Harry.

5) Messy is a no-no. – Yes, when it’s still your home, you can leave the newspapers lying around. However, when you have prospective buyers, make sure you tidy the place up. Buyers buy due to emotion, definitely not just the price because your property would not be the only one on sale. Prices are usually not that big different too because it’s always based on demand vs supply. Just imagine going into a retail store where everything is in a mess. You have lost the interest to buy….

6) A clean home is a better home – Spend RM100, hire two of those temporary maids for 4 hours and get them to help clean up the place. Investment is needed for a better ROI. By the way, RM100 is nowhere near the loss I mentioned above, if you take forever to sell your home.

On a personal note, I was trying to sell my Kelana Jaya condo for 3 months at RM450,000 before my good friend, Barry of Chester Properties – 016 2388308 told me that painting the home helps. I spent RM1,600 to repaint the home and for your information, it was sold within days at RM465,000. That was around 4 years ago. Perhaps I am just lucky? 😛  All the best in selling your home and use the proceeds for something even better! Cheers.

written on 4 Nov 2017

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Working in KL and Seremban, would Semenyih be a good choice?

A reader wrote in to ask about the possibility to buy Semenyih. He was working in Seremban while his girlfriend was working in KL. Should he be thinking about Semenyih as one of his choices? He cited affordability as one major factor affecting his decision. Secondly, the location should be between the working places of both him and his girlfriend. I gave him three questions instead of deciding because his decision should be based on his personal circumstances. It would be way better than someone working and staying in KL could; me. I assume he needs a place to stay soon and thus considering a secondary property.  I asked the following three questions:

1.  Does he like Semenyih as a new and growing area? The reason why I ask is because it would take some time for newer areas to become populated and for more amenities to be available. To be frank, I do not prefer anyone to ask where to buy. The right question should always be WHY buy that particular property. For example if he needs a supermarket nearby, is it available? If he wants connection into a major expressway within 5 minutes, does the project provide for such?  Sometimes, one project may have a lake while another has a secondary forest  nearby, question is, which one do we like more?

2.   Secondly, has he viewed sufficient number of units for a closer comparison? Every project would have a different design which may not appeal to all. The quality of build would be very important too. What about the size, design and even the price? Viewing say 5 units would already allow for an objective comparison instead of just deciding where to buy before understanding the nitty-gritty of one particular project versus the other. Remember, an easy to refer Excel file would be extremely useful too.

3.  Future-proofing it slightly.  What would happen within the next 5 years, would there be a likelihood for one side to be working at the same place as the other? For example, he may work in KL or his girlfriend may choose to work in Seremban instead. Many times, when we sit down and think a bit, we do realise that we may have a plan already in our mind of what we intend to do. For example, if KL is more likely as a place for career growth, then perhaps buying a place not too far away would be better than just a compromise of an area in the centre of Seremban and KL.

By the way, just to illustrate some availabilities, I have cut and paste two sets of choices from propertyguru.com.my and iproperty.com.my  Yes, even landed property is still considered affordable but Semenyih is not actually next door to KL. It is around between 35 – 39km away from KL city Centre. So a lifestyle change would definitely be necessary. Worth it? Just a comparison between the property availability vs price? Yes. There are many other reasons too. Think and decide…

written on 21 Oct 2016

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Semenyih then, now and the near future? Find out more.

[Sponsored] Just 10 years ago, not many people have heard of Semenyih. They would have heard of Broga Hill but it’s not a place people associate as a residential area… Fast forward to today and we could already see many of Malaysia’s top property developer brands developing in Semenyih. Even among my close circle of friends, a close friend, Ms. T bought a terraced double-storey for RM700,000 a couple of years ago and is already staying there a few days per week. She and her husband works in Kuala Lumpur.  Another good friend, Ms. C bought a semi-detached home and has fully moved into her new home with her friendly husband after spending over RM300,000 on renovations.

Actually, just what’s really happening to Semenyih? Is it still a lonely place without much happening or is it now firmly moving beyond just those few rows of landed properties in the beginning? How about dropping by this weekend and understand if there are now opportunities to buy into an emerging hotspot? Free delicious food too. More details as below.

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RM100k for a semi-detached / bungalow in Bandar Dato Onn? WOW.

I think this news was the highlight for Johoreans who needs a home and has yet to own a home. I think they should also be from lower-income bracket. In KL property market today, any apartment launching with condo facilities and below RM350,000 is going to receive lots of attention. Well how about landed properties for much lower price? Fancy owning a semi-detached home for RM100,000? Or lower? Well, this was announced by
Sultan Ibrahim Ibni Almarhum Sultan Iskandar on Monday (20th March 2017) and the soft launch of Phase One was at the Galleria@Kotaraya Mall today. Here are a few articles about it.
TheStar – Jo
horeans excited over Sultan’s affordable housing project.
ChannelNewsAsia
– Johor Sultan to build affordable bungalows for lower-income families.
YahooNews –
Sultan Johor’s dream homes: Submit your application online at 5pm  and
TheSundaily
 – Own a bungalow for just RM100,000  Well, when the news is reported by so many real media companies, it is definitely real and worth sharing.

According to the report in TheStar, many Johoreans who were working in other states were also back in order to stand a chance to buy such an unbelievable offer. Many expressed gratitude to Sultan Ibrahim for helping Johoreans get affordable housing. According to Sultan Ibrahim,
a total of 1,840 homes would be built over several phases at Bandar Dato Onn, Bandar Baru Majidee and Jalan Yahya Awal. All these locations are within 20 minutes drive from the city centre. The first phase would be in Bandar Dato Onn and it wouldcomprise
600 bungalows and semi-detached units with a built up area of 1,100sq ft each. This is a freehold project and it will be built under the
Sultan Ibrahim Foundation. It does not stop with just the offer. Bank Rakyat would also be providing
 loans with flexible repayment schemes. Details to be announced in future. According to Sultan Ibrahim, “Successful applicants would only need to pay a deposit of RM1 for a full loan with an easy repayment scheme.” There are just 600 units for this first phase. Thus, the selection process for the houses would be stringent and priority given to the most deserving buyers.

What a good news for Johoreans who qualify. Would there be more awesome offers in other states? Well, it would depend on the fund which would be funding it. I do not think private developers are able to build such a unit without a huge subsidy. They need profits too. Of course, the land can be nearly free if it’s from the state but the cost of construction including other manpower costs would easily exceed the RM100,000 price being offered. For his condo, around 10 years ago, my brother-in-law already spent over RM65,000. When I moved into my current condo, I ‘overhauled’ two out of three bathrooms and just these two cost me RM30,000.  All the best and hopefully everyone who needs a home gets a home. To me, this is a basic need which would at least secure the person and his family a roof over their head. Online applications for the homes on
www.yayasansultanibrahim.org.my
 Happy applying.

written on 22 March 2017

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Seminars, Talks, Property Gurus and Articles

A close friend asked me to join her for an informative property talk by a prominent property guru. That property guru is very famous and I bought her book before. In fact her book was the second one which I bought and I have read it a few times over. The speaker would be speaking about three topics which I feel everyone should listen and know because it may be the same talk but everyone may have different conclusions. ‘When is the best time to invest in property’, ‘how to be a successful property investor’, and ‘the challenges and opportunities’.  Tell me, what would be the answer to the first one? Yes, it’s, ‘Anytime’. The second one would be some steps like searching for the right one, saving for the first one, etc. The third answer would be opportunities in newer areas, challenges such as the potential crisis, such as harder to get loan approvals etc. For those who think, these topics are very basic, well not really. For some who has been reading continuously, it’s basic but for first time home buyers, it’s a wealth of knowledge. Before you jump out of the plane, at least, get a parachute. 🙂

Whenever there are property fairs, one part that I like the most would be the seminars and talks. Of course because I kept listening to these talks, some of them are actually repetitive but at least half of them would be on new topics. I also love to listen to property developer’s talks. You may think, of course they would only say good things about their project but be reminded, everyone of us wanted something different. If the developer’s project meets everything you are looking for, then it’s really worth your time. Furthermore, you can ask questions during the talk!  Thus, try not to miss these when you go to any property fairs which these days are happening nearly every week.

Property gurus, especially the famous ones are really famous. 🙂  They speak in every big events and continue to speak on topics of interest to all of us. What about the not so famous ones? The newer ones? Well, give them a chance. They may not be as famous yet because they are not yet long in the industry. However, every one of them have something to share, their knowledge. Sometimes, they may be biased slightly because they do represent some developers but frankly, do you think they want to destroy their image built over the years by representing a really ‘useless’ developer.

Articles. Always read more. Every article lets you know more. Every article allows you to understand what’s really happening. Do not be surprised to read 3 articles saying three different things. An example, Cyberjaya. At least half of the articles would say Cyberjaya is overhyped. Another half said Cyberjaya is where the excitement is. Ok, which one is true? Well, I prefer to read those telling us things like ‘new malls in Cyberjaya’ (positive), ‘new MNC opening up’ (positive), ‘MRT’ (positive) and those like ‘unsold units’ (negative), ‘nothing to do at night’ (negative) as well as ‘too many empty units’ (negative). Hope you see that you are able to make a better conclusion for your own hard earned money if you read both sides before deciding.

written on 13th Sept 2014

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