Buying Iskandar? Do it in Singapore. Why not?

Is there a need for a property gallery in Singapore? If you are a Malaysian developer which is also trying to court Singaporean buyers? Personally, I feel that the developer needs to really have a huge GDV to do that or else the cost is going to be exorbitant. How exorbitant is exorbitant? Well, the rental for  a 2,000 sf unit in a more prominent area may easily hit S$10,000 and this does not yet include the renovation costs and manpower costs yet. You cannot be renting a gallery in a place where no one passes right? When it happens to be a Malaysian developer, this becomes a nightmare if you could not sell enough properties to cover this new overhead. Furthermore, be reminded that if I am serious, I would definitely want to visit the actual unit in Malaysia. right?

Nevertheless, I think the ROI must be worth it because one of Malaysia’s established developers has just opened a new high street property gallery in Singapore for the promotion of its developments as well as new launches. This gallery is envisioned to showcase its projects not only to Singaporeans but also to Asia Pacific investors and perhaps even expats based in Singapore today. According to UMLand, it is important for them to be in Singapore because they recognise the importance of Singapore strategically to better service existing and potential customers. In one sentence, having a gallery in Singapore attracts more than just Singaporeans.

In Iskandar, UMLand’s flagship development Bandar Seri Alam, also known as City of Knowledge as it includes several renowned educational institutions. It has won both the Asia Pacific International Property Awards in 2013 and 2014. Besides that, UMLand still have more than 1,800 acres of undeveloped land. In the future, there would be another multi-phased development in Medini called Medini Lakeside.

I think many more galleries may be opened in the future if Iskandar continues to be targeted by Singapore. As it is, the largest investor in Iskandar today is already SIngaporeans. Read more here:
Singapore investors MUST be top in Iskandar, always

written on 22 June 2014

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Iskandar will not have a casino

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Buying Iskandar? HSR update. ‘Malaysia-Singapore meets monthly.’

When the High Speed Rail between KL and Singapore was first mooted many, many, many years ago, it was already announced that going to Singapore from KL and vice-versa would be faster than taking a flight. Recently, the sign that this is really nearer to the end of the tunnel, even if it is right now just at the beginning of the tunnel is clearer. A recent report in The Straits Times shed a little more light on this matter. It said that the rail service would have stops in Seremban, Ayer Keroh (Malacca), Muar, Batu Pahat and Nusajaya in Johor. The total time stated was that it would take 2.5 hours, even with these stops and this is said to be shorter compared to flight which would take up to four hours.

I agree that it will be a shorter duration but five hours is indeed a little too conservative. I just took a flight to Singapore from KL two weeks ago. I arrived at KLIA2 about 1 hour before the flight with my boarding pass printed and it took me another one hour by flight and 30 minutes by taxi to reach my office in Singapore. Total time taken was slightly lesser than 3 hours. Okay, if compared to car, this is by FAR much better. Why drive and arrive too tired to do anything else? Why not just check in your luggage and arrive fresh, plus during the journey you can do your work or just keep taking selfies and post in Facebook? Or for the younger ones, Instagram?

A comparison was also made with the HSR link between Taipei and Kaohsiung which carries an annual ridership of 44.5 million. The HSR between KL and Singapore would probably carry up to 49,000 passengers daily by its 10th year of operation. This would be an annual ridership of 18 million. If you want to know what’s 49,000 passengers daily is versus the plane, a typical Air Asia flight seats 180. So, to carry 49,000 passengers, Air Asia needs to have 20 planes flying to and fro KL-Singapore-KL 7 times every day. In other words, nearly non-stop for the while day. You fly, land, fly, land and fly and you still need 20 planes just to do that. 🙂

The most important line in the report is this, “The Straits Times understands that the Singapore and Malaysian governments have been meeting once a month on the project.”    Before you rush to buy properties along the way or even Iskandar, do note, this HSR is expected to commence ONLY in 2020. Yes, you still have some time to build up some cash reserves and view more than 10 different projects before deciding on the one which meets your expectation. I know, there are those who said, if I wait too long, the cheaper ones may already be gone. If you know the number of units coming up or is in planning, I think the opportunity continues to be present for a few more years to come. However, a slight premium is definitely expected, depending on how integrated Iskandar and Singapore can be within these few years.

written on 5th July 2014

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Linking KL, Iskandar, Malaysia – Singapore by High Speed Rail (HSR) and Rail Transit System (RTS)

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Buying Iskandar? Points to note about Chinese (China) developers thus far

Many Chinese developers are buying huge tracts of lands or are involved in land reclamation projects. On paper, all these developers are much larger than even Malaysia’s largest developers. For example, Country Garden Holdings co will be building 9,000 units of condominium on a 56 acre land. For a comparison, the total supply of units for the whole of Penang (island and mainland) would be around 10,000 units per year. Now do you see the size of these developments? Country Garden is also said to be involved in land reclamation project that goes into a ‘few thousand acres’ in Pendas, Johor.

Guangzhou R&F Properties bought six plots of land in Johor Baru for RM4.5 billion. The land was bought from the Johor Sultan. Total size is 47 acres. This purchase will be converted into a high-rise residential units, low-density housing, retail properties, offices, a hotel and a shopping mall. Since this is 20% smaller in land size compared to Country Garden, perhaps the total units to be built may be lower but would still be considered massive by Malaysia’s current standard. Typically, developments of over 1,000 units are unheard of, especially for condos.

Greenland Group announced a US$3.3bil deal in two residential and hotel projects. They will be building a world-class waterfront properties in Danga Bay. This is a much bigger developer than Country Garden. In 2013, Greenland was ranked 359 in the Fortune Global 500 company. Their forte thus far is in mixed commercial development, including high-end hotels and residential towers.

Real estate Malaysia also beat Hong Kong, Australia and even Singapore in 2013 in terms of total investments from Chinese institutional and retail investors. This is as per reported by real estate consultancy Savills. Total for Malaysia was US$1.9 billion compared to US$1.8 Billion for Singapore, US$1 Billion for Australia and US$867 million for Hong Kong. It loses to only the UK and the USA. Quite an amazing feat because in terms of the actual property price, the real estate in Malaysia is by far cheaper than all the other places mentioned by Savills.

Okay, after so many positive developments, some questions remain. If all these new developments are going to complete at almost the same time, say within 2-3 years, what would happen to the demand-supply equation in Iskandar?  Do note that these are just the Chinese ones. There are many more Malaysian developers, Singaporean developers which are also buying lands and launching new projects. I think it is safe to say that if the market is relying on just the current growth pace, the new supply would overwhelm demand. All the planned catalysts that Iskandar is planning to put in place, for example, the education, the entertainment, the new High Speed Rail, the RTS has to fall into place and then the demand would grow faster than current pace.

written on 11 April 2014

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Buying Iskandar, Sunway, Citrine, RM800psf

Sunway’s latest project is a 728hs township in Iskandar and its first phase will be launched soon. Pricing is estimated to be around RM800 per sq ft. They named it Citrine. Should you be buying since this is the first launch out of a huge integrated development? Are you seriously thinking about Iskandar? Well, Ms Sarena Cheah, the joint managing director of property developer Sunway Berhad’s property development gave some reasons as below.

Catalysts such as healthcare, education and oil & gas industries in Iskandar. When these comes to fruition, residential portion has to move up too to support them. Do note that if all these come to fruition, residential part better be ready, or else if shortage, then price will climb high very fast, not healthy.

Support from Singapore. Singapore is now investing in Iskandar too. Even Singaporean PM said, for SMEs to prosper, they may want to think more seriously about Iskandar.Cost advantages in Iskandar will help Singaporean manufacturing entities to prolong their cost advantages

Out of over RM130 Billion commitments, half of them have been invested. In other words, it’s not just rumours or simply reported numbers.

Singapore was recently ranked top as the most expensive city in the world, beating the likes of even Tokyo and New York. Iskandar is right next and ranked nowhere near even the top 30 in the world today. Think objectively.

Favourable exchange rate helps too since the prices in Singapore is becoming too expensive and Iskandar is at least 2.5 times cheaper in comparison.

Medini Zone is exempted from any cooling measures implemented thus far which meant that it’s not affected by the ruling. Even the RPGT of 30% is exempted.

What more do you want? Now for the only issue which has been playing in investors’ minds. There are close to 300,000 homes in the planning or being built in Iskandar as at Q4 2013. This includes Country Garden’s 9,000 units and another huge one by Iskandar Waterfront with more than 4,000 homes.

I do not have actual stats on how many units of residential units are needed once all these catalytic projects are completed but I hope they can cover whatever is being planned or is being built today or else, these new units will really be a huge issue. One reader og kopiandproperty.com said Iskandar will be a ‘ghost city’. I do not agree to his assessment even if there’s an oversupply situation.

written on 5 June 2014

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Linking KL, Iskandar, Malaysia – Singapore by HSR and RTS

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Buying nearby cemeteries, what should we worry more?

Some time back, I read an article about buying properties next to a cemetery. I would think any sane buyer would definitely avoid buying next to the cemetery. However, I have to admit that two of my properties happen to be nearby or opposite a cemetery. The one opposite is separated by a main road of four lanes. How did both of the properties fare thus far? Well one has
given me very good returns
 while another one will be completed 2017. Why did I buy them? Good question. In fact, I have doubts as well. There were so many doubts which I could read online etc. I think there are a few reasons why the potential would be there.

Lower prices per sq ft. Objectively, if the price per sq ft is lower than everywhere else nearby, it meant that the prices would increase to the similar levels of the current projects. The main reason is because if everywhere else
is increasing in price,
 this ‘nearby cemetery’ home would definitely increase too even if it will always be lower than those which are not built nearby or next to a cemetery. Yes, I did buy the place and if I were to sell today, even under current slowdown circumstances, the returns would still be a source of jealousy for those who evaluated but
did not buy it a few years back
, simply because it was nearby a cemetery.

What about my second property facing the cemetery? Well, I had the same argument in my mind when I paid a deposit to book it. The price psf was still very cheap despite the condo having individual lifts opening ONLY at your doorstep. Based on the selling price currently and the completion in 2017, I believe the price should be higher than the price I paid. The returns remains extremely attractive regardless of the usual investment returns from stocks, Gold and even that safe Fixed Deposit. Reminder,
FD is not really that SAFE
 in the long run.

My final conclusion after owning two these properties? Actually, as long as the view from your condo is not facing it directly and
you have really done sufficient homework
 about the developer, the pricing in the area, the potential appreciation and a host of all the usual like location, price and design, I would think it is safe to buy properties CLOSE BY to cemetery. Of course, if you have to to drive through a cemetery to reach your home, that’s a totally different story altogether! Happy buying.

written on 27 June2016

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Knowledgeable investors always have options

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It’s not true that we must only buy properties but not cars.

It’s totally untrue that we should only buy properties but not cars. If we are a working professional and we are already at a respectable level in the organisation, we deserve to drive a better and safer car. Certainly cars with airbags, ABS and EBD today, regardless of the brands we love. Before I forget, it is however recommended that we get a property first before a car, when we could only choose one. Haha. Anyway, if we could afford a Segment D car (Camry, Teana, Passat or Accord), it may be wiser to save some of the funds (easily RM30,000 or more) and get a comfortable Segment C instead (Altis, Sylphy, Jetta or Civic). Safety wise, they are similar. Only the interior size and noise level may be a little different. For those who are rushing to buy another property, then a good segment B car can still carry us around. (Another RM30,000 savings) They include Polo, Almera, City and even Vios. (Yes, there are also local choices and even value-for-money Korean brands. However, for the usual crowd, I will only be quoting those usual brands.)

A few months ago, I was really considering to get a SUV (second hand). I have driven my Persona for the past 6 years. It’s problem free thus far but I was attracted by the huge discounts of some SUV brands. It was like, if I do not buy then, when would I get better deals again? There are now even more deals for new cars. New car for Chinese New Year? This may just be that time. Full article in TheStar detailing all the different offers
here.
Some deals highlighted? Naza offering rebates up to RM25,000. Honda offers up to RM12,000 discounts. Toyota models with up to RM10,000 discounts. Nissan is offering unto RM6,500 while Ford has discounts of up to RM12,000. Of course, the highest discounts are usually reserved for more expensive or less popular models. Do read the
article
for all the available deals.

Anyway, this is what FOMCA secretary-general Datuk Paul Selvaraj has to say to potential buyers. (Quite true!)  He said, “If they are able to manage their finances well, now would be a good time to get a car. However, they need to see if they really need to buy a car as it is the largest expenditure next to buying a house.” He added that the failure to repay car loans was among reasons why many were made bankrupt. Still remember the savings overtime we buy one segment lower? I think he wanted to also remind everyone to buy well within what we could actually afford. Yes, I know the feeling of driving a new car. It’s great, well at least for a few months anyway. Test drives are free by the way. 🙂  Just like viewing ever more properties, especially those attractively priced ones. Get a good car, ok. It’s not a clever move to drive a problematic car that breaks down occasionally causing us lots of unproductive hours. Happy buying.

written on 10 Jan 2017

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Why MORE people will be buying new cars in 2021?

There’s this forecast that more people will be buying new cars in 2021. Are you buying one?

Car is always a popular topic. This article was viewed by many.
Car loan savings of 9 year vs 5 year loan?
 With the MCO and CMCO, it seems that people are driving less. If this is the case, then why do people still buy cars? There are lots of reasons but generally it revolves around need and wants. By the way, the term need in this context is beyond just having a car to move from point A to point B. It may also be a necessity for business or career too.

Seriously, a top management in a multi-national company may just want to drive a better car and that’s why they were given car allowances to do it, usually rather generous too. There are definitely many other instances such as in the sales line. It’s tougher to tell the new people to ‘be like me’ and close more deals if they see you were driving just an old car… So, yes I agree that both these business / career needs are necessary and should be classified as need, together with the need to drive from point A to point B.

Photo by Angelos Georgiou on
Pexels.com

So, is new car sales in Malaysia going up in 2021? Despite us being in the Movement Control Order (MCO) 2.0?

Article in themalaysianreserve.com
.

FITCH
Solutions Country Risk and Industry Research maintained its forecast of a 6.9% increase in total new vehicle sales in Malaysia for 2021 despite the reintroduction of the Movement Control Order (MCO 2.0). It said, “For the purpose of our forecast, we assume the likelihood that easing the restrictions will take longer than the predetermined two-week period.”

“We maintain our forecast of a 6.9% increase in total vehicle sales in 2021, on the back of our 2020 estimate of a 15% decline, which would result in 2021 sales remaining below their 2019 pre-pandemic levels, reaching just under 550,000 units.” Do read the full report in
Article in themalaysianreserve.com

Important note

Whether it is because of need or want, people could only purchase cars if they actually have the means to do so. Whether they could continue to pay for it 12 months later is another matter but at the point of purchasing that new car, they could afford it and banks were willing to lend to them after some financial background checks. This meant that people have a job or businesses were doing well enough to afford that new car. This is a very important sign for the economy yeah. In bad times, nothing of such would happen.

Sentiment is key when fundamental is fine

Many articles talk about potential recovery because people love to have hope. Even more articles highlight all the negativities because people love to read bad news and they then have topics to talk about. Actually, it’s equally important to just write facts and tell about the situation so that the sentiment would just be ‘business-as-usual’ versus one where everyone stops buying and this affects everyone in the near future or one which is speculative in nature where people are no longer investing but they were speculating.

Thanks for reading. kopiandproperty.com knows that bad news get more views but we are okay with fewer views from sharing actual numbers too.

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Buying a new home? Ask Why not Where. Safer decision.

Location, location and location. Well, it should be ask why not where instead. I am serious lah. All your friends love location A, so you also buy location A? Your office may be closer to location B. Your future mother in law’s home may be closer to location B. You found an undervalued property in location B. You will want to buy location A?

Location is not the only consideration

What’s the first thing that comes to mind when we want to buy a property? Location choices? I think it should usually be the first because even the major property sites are also giving us the box for us to fill in the location first in order to start our search. Well, there is nothing wrong with this choice, especially if your parents are staying within the same location or your future wife or husband is staying within the same location (Haha) or because your favourite hair stylist for the past 15 years has her shop within the same location.

Photo by Magda Ehlers on
Pexels.com

The first reason is VALID. Please let our parents stay where they like and we follow them, not the other way round. Your future partner is staying in the same location? Then, just rent a place in the same area lah. Once you get married, can stay in the same home anyway. 😛  As for hairstylist reason, stop joking. We go to a hairstylist once per few weeks. There is no need to stay nearby okay.

Anyway, location may not be the sole reason anymore. Especially for Klang Valley. First of all, look at all the huge integrated developments being built in new areas. Rawang on one end and Semenyih on the other side for example. (I have no properties in both Rawang or Semenyih) In between, there are many more new choices too and not just the usual
few matured neighbourhoods lah.

Prices are helping the push for more areas too because scarcity in many matured neighbourhoods would mean fewer qualified buyers too (high price lah). There are now so many expressways you cannot remember their names and MRT Line 2 is being constructed feverishly too.
MRT Line 1, if you do not know is already operational.
 I have taken it many times too.

A better way of understanding where to buy is to ask one additional question beyond just location. “Why do you like that particular location?” Your WHY answer allows you to then step back and start looking at those reasons instead. Usually, it will yield many new results that you have never expected before. Some very valid reasons?

Schools (SJKC is one of those choices)  Seriously, there are still plenty. Some do not have enough students!
Malls – Actually as long as it is nearby, any mall above 500,000 sq ft is good enough for the weekdays. For the weekends, go anywhere you like.
Near MRT / LRT / KTM etc? (Please… the number of total stations for these are already over 120 I think..)
 Near our office. (Define near. 10 minutes? 20 minutes? Within an hour? Once we define, start looking by using google map too)
Low density (whether area or project).  Except for a few very high end areas, I do not find even some hotspots as low density.

In terms of high-rise, this is my thought)
I just like that area only.  (Haha.. Okay, buy that area only.  Engage more agents to keep looking. Seriously, nothing wrong. )

Home is where the heart is. Perhaps it is also important to build the content of that home too and not just that home itself. Even if we are buying a landed property today for example,making sure it is friendly for our parents would be important too. A huge room on the ground floor for example. (NOT the maid’s room okay). Design is important. Do you like a bigger kitchen, living room or bigger bedrooms? Often, it is a choice.

It is certainly not a wise move to pay premium on top of premium just to get some place which is steps away from the MRT, unless you are very sure MRT will be your only connection to the world.
Oh yeah, should you feel low floors are bad, well….
 Haha. Ask why not where. Your choice will be safer too. Happy searching the WHY to fulfil your home sweet home.

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written on 22 Oct 2017

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Advantages of buying new property vs sub-sale

Buying new property and sub-sale advantages.

Let me start with a story, I was on a business trip to Melaka recently and met a good friend from the real estate industry in a
new property sales gallery there.

Then he was telling me that the property market is slow these days but actually the sales are still continuing. He was selling an
attractive high-rise project in Melaka currently.

So I concurred and said that it’s very important to look at the job instead of the sentiment when it comes to property investment opportunities.

In additional, today in a slow market, developers are much more willing to offer extra stuffs and selling with lower prices that what they would be selling during good times.

After that, he laughed and agreed. Then he said but you know what, buyers nowadays prefer to buy new units versus sub-sale.

This time I laughed because actually there are reasons for that.

Perhaps we take a look at some differences between buying new property vs sub-sale.

As all my properties are high-rise units, let me share a little more on the perspective of high-rise units.

The list is by no means exhaustive but hopefully it gives a good idea as to the choices available when it comes to both buying directly from the developer or buying from the sub-sale market.

Here’s one possible choice aimed at first-timer and young families in Melaka.

In my property investment journey from my first one in Penang till the home I currently stay in Klang Valley, I am glad to advise that both have their advantages as I have bought both types.

In terms of capital appreciation, the one that gave me the highest return in absolute number was a new property.

Perhaps this one in Melaka is that home sweet home / investment that you like.

Happy viewing and
buying. I leave you with a famous property investment quote.

“Ninety percent of all millionaires become
so through owning real estate. More money has been made in real estate than in
all industrial investments combined. The wise young man or wage earner of today
invests his money in real estate.”

Andrew Carnegie – Scottish businessman and
philanthropist

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Buying one affordable property, getting two ‘units’ and renting out one?

Many ‘experts’ claim that there are no more affordable properties. Browsing the listings in many property listings site would tell us that this is not true. However, many do not like secondary units. For example, the peeling paint outside the building, the need to fix a lot of things inside the unit as well as the time needed to get it fixed to the level that is satisfactory. Very true, especially for the current generation of working professionals. They like a comfortable place to stay. Usually, modern designs appeal to them. Especially a unit where they can drop by the pool for an occasional swim. One which they have peace of mind as it is secure and guarded. One for which they can now call their own and themselves, an owner. How about owning one unit where the owner gets to stay and gets paid rental at the same time?

Perhaps a dual-key unit is an attractive proposition. Looking at the potential to rent out one of the unit or even two of the units, there is the HELP University and International School. HELP University is only 850m away from the radius of DK Impian. As for the size, it should be within the affordability of a professional who has worked for a few years. The project that has this potential is DK Impian by Pantai Berkat Sdn Bhd. With its medium-to-high entry price point, this project appeals not only to first-time home buyers but genuine investors as well.

DK-Impian has a good location on its side as well.
 I
t is bordered by Kota Damansara and Ara Damansara and within these two townships, the total population stands at 400,000. It is also sandwiched between two giant developments, namely Kwasa Damansara as well as Sime Darby’s City of Elmina. Beyond just these two catalytic giant townships, DK Impian is accessible by a few major highways such as Guthrie Expressway, Elite Highway, Jln Sg Buloh and upcoming DASH highway that will connect the Eastern and Western part of Klang Valley. Beyond just driving to work, DK Impian is also only a few minutes away from Kwasa Sentral MRT station, Subang Skypark KTM station, Rapid KL Kwasa Land and Sg. Buloh KTM station.

Coming back to the dual-key layout advantage from DK Impian. For singles, this provides a balance between living and working. In fact the trend of working from home is also growing these days. Instead of spending money in cafes, it’s much more comfortable to enjoy a cup of coffee in the working space or even the swimming pool within. For those aspiring to make this buy a stepping stone into their next property investment journey, they can also choose to rent out the other room for extra passive income. This goes a long way into helping the mortgage payment as well as help the owner to save more for their next property. To know in more details,

do check out DK Impian’s site.

Message brought to you by DK-Impian.

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Buying or renting, a property is still needed. Be savvy.

As a landlord, I treat my tenant well. However, the rental they pay will be used to pay the monthly mortgage payment. While my mortgage payment may end after 30 years, I will not stop taking rental payment from my tenant. So, after 30 years, the rental will help fund my living expenses. This is the relationship between paying rental as a tenant and accepting rental payment as a landlord. We know Covid-19 has wreaked havoc. Thus, uncertainties about what will be happening in the near future continue to affect property decisions.

Demand for rental property increasing

This was what PropertyGuru said in a recent report. “58% year-on-year increase in rental demand as potential home buyers await economic stability.” This was the article with all the related stats for everyone’s reading
(Click here for full article)
 Briefly, because of the worry for uncertainty, it seems that some buyers are holding back from their property purchase and they resorted to rent instead.

This was what PropertyGuru Malaysia Country Manager Shylendra Nathan, “The increasing demand for rental properties could be indicative of shifting priorities among home seekers who face difficulties in securing home loans in the current climate, as banks continue to be conservative about loan approvals. As such, potential homebuyers are temporarily putting their purchasing plans on hold to ride out this period of economic volatility. Instead, they are opting to rent homes to satisfy their upgrading needs or pursue their desired lifestyle improvements, while rebuilding confidence towards making large property purchases.”
(Click here for full article)

Buying or renting, property is still needed

We could decide that things are uncertain and thus, buying a property is a little risky. We could decide to just wait a little for things to be more stable. We could even decide that we could continue to stay with our parents in the meantime. All these decisions are fine. What we need to also do at the same time is NOT to use up all the money we needed to buy a property…

This is because if we think we want to wait but we are spending all the money we have, then it’s just an excuse to spend money and has got nothing to do with waiting till things get better. By the way, we need to also define what do we mean by things getting better too.

Everyone loves a cosy home even if design taste differs

Buying or renting, a property is still needed

When we decided to rent, we need to be savvy to the fact that we will have to rent a property from somebody; a landlord. In other words, renting or buying, a property will always be needed. We could rent a room instead and even this would still mean it’s a room within a property. In other words, the demand for property has remained… just that it switched from people buying to people renting.

I sincerely hope everyone understands that demand for property does not go down just because people chose to rent and not to buy. This is also why landlords will most probably continue to buy more properties so that they could continue renting it out to people who say renting is better… Thank you for your understanding.

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Buying Penang Condos? 14,000 views in 3 hours says it all

I have always ‘debated’ with people on the state of demand for properties in Penang. Many of my Penangite friends said that so there are way too many new condos. Surely the demand is not there. I showed them the demographics, I showed them the stats, basically they just refuse to accept that demand is huge and demand is alive. Just two days ago, at around 1030pm, just one hour plus away from midnight, I published an article about ‘RM299,000 condo in Tanjung Tokong Penang’. Guess what, that one article received 14,000 views within 3 hours. So many people wrote in to my email and the clicks to the developers’ website was over 5,000! I think i should charge the developer a bit. Haha.

This brings us back to the question of demand and this has proven beyond doubt that demand for condos in Penang remain to be extremely strong, especially when the price is right. My personal belief is this. The new condo need not be RM300,000. Even a well designed 850-950 sf condo at RM400,000 with majority of the typical facilities in an area which is less than 20 minutes from the industrial area or Georgetown would sell well. The problem is this, all new launches are at RM500,000 or higher. The reason was due to land price increasing, cost of materials etc. Then again perhaps the main reason is because of compliance costs and thus developers wanted to ensure they have a good gross margin or else they would not build.

If only these developers can think about lowering their gross profit target by 10-15%? The state government can help by making the decision process of either to reject or approve much faster, I think maybe just maybe the price is achievable. Think about it, selling all the units faster at lower price meant you can start building faster and get the profits faster, even if lower than if you had sold higher. Anyway, this is the main reason why ASPEN is able to sell their units at just a starting price of RM299,000. I seriously think their gross profits are much lower than what other typical developers try to achieve. Note, just personal opinion based on some knowledge from friends in the industry on the actual cost of building a condo.

written on 30 May 2014

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Buying Penang properties? Affordability means RM600 – RM700psf.

A close friend asked me recently what’s the price that I would be willing to sell my condo in Tanjung Tokong. I said, RM700k. She laughed and said, my husband said that’s impossible. I laughed and said, it is ok. In fact at the price I wanted to sell, I was only only looking to sell it at RM610 – RM630 psf. Surely that is not something too high in Penang island. Furthermore, every condo in the neighbourhood are already above RM630 per sf despite giving just one car park. My unit comes with 2 car parks even if front and back. Nearby, E&O’s project was already selling at RM1,300 psf or higher. Just wanted to remind her that it is impossible for the whole Tanjung Tokong to rise in price but not my condo. The most recent offer came in at RM620K just two weeks ago which I told the buyer not to worry. Surely for RM620K he/she can get a decent unit, as long as he is ok with one car park and below 1,000sf. Then, today, I read the news from SP Setia in The Star.

Reported in The Star today (30 July 2014), SP Setia’s General Manager, Khoo Teck Chong said that over the next five years, SP Setia would be building more varieties of affordable housing that are able to cater to Penangite’ income level. This is because for the past few years, majority of all properties in Penang island has grown out of proportion in comparison to salary. Besides that, due to the stringent loan policies, it is getting tougher to sell high-end properties. He said that in the south-west district of the island, SP Setia would be developing properties prices from RM600 – RM700 psf range. The upcoming one would be Sky Vista at about RM600 psf. In SP Setia’s own survey, it was shown that properties priced between RM600 per sf and RM700 per sf are deemend to be affordable and thus are in demand by Penangites.

Personally, I rate South-West which is Balik Pulau as below Tanjung Tokong today. That’s why in terms of pricing, it should not be priced too high. RM600 per sf is a price which only more established developers like SP Setia would dare to price. However, if you ask me if I have just two choices today, where would I buy, it would be Balik Pulau and not Tanjung Tokong. Reason being, majority of all the working professionals would be on this side of the island instead of Tanjung Tokong. Of course, if you are a Penangite, then the choice is obvious. Penangites have their special preference for areas and always consider areas like Sungai Ara or even Relau as secondary instead of main areas. I guess it is ok. This is the reason why properties everywhere within the island has seen more than doubling of price within past few years.

written on 30th July 2014

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Buying Penang Properties? Important Stats to know.

If you have recently seen my article for Malaysian property market as a whole, do note that Penang market is different. In fact even within Penang itself, it is divided into two, the island and the mainland. No prizes for guessing, even in Hong Kong, the more expensive would be the island part and the mainland portion is cheaper. Despite all the recent hype about Second Bridge and Batu Kawan, if you intend to make quick money flipping, I do not think it is a good idea unless speculative activities really happen instead of fundamental developments. Come on, even IKEA is opening in 2020!

Thanks for Michael Geh, Senior Partner of Raine & Horne, we have these clear and concise charts about the property transactions for Penang property market. Buying Penang properties? You should understand the dynamics of it.

Looking at 2011, we could see that the market was actually still ‘affordable’. 70% of all properties transacted was RM250,000 or lower. Typically, these are the 700sf apartments all over the island at areas like Relau, Farlim, Paya Terubong, Sungai Ara, Bayan Baru etc. It was not just apartments, many landed properties in the mainland was also very affordable. There were just 10% of propeerties which were above RM500,000! 20% of the properties were the mid level ones. However, this did not last long because it was also in 2011 where the buying activities peaked in Penang. Queues were crazy during many of the new launches.

In 2012, it has shifted. Transactions total actually gone down but the value of the properties transacted increased. Those below RM250,000 dropped 5% and this was taken over by those above RM500,000. In fact this huge drop of transactions was slightly over 30%. There are a few ways to look at this. Perhaps the transactions in 2011 was NOT due to 100% real demand. Some of it must be due to speculative buy. Alternatively, it may also because due to the price increase in 2012, some people may be spooked by some predictions of bubble bursting in 2013 or 2014. Personally, I think it is more of the former. All these changed again in 2013.

In 2013, transactions dropped even further! Another 20% drop. I think 2013 was a year where people were fearful due to the many predictions by the research houses, property gurus as well as the fact that property prices cannot be going up forever right? Nevertheless, for those who waited, the prices went up further. Now, the properties which are RM250,000 or lower dropped down to just 33% while those within RM250,001 – RM500,000 increased to 44%. This is simple to explain. Many of the properties which were just slightly below RM250,000 has increased to over RM250,000. The % for properties above RM500,001 is now at 23%. Within two years, this has more than doubled.

Actually, as long as the economic growth of Penang is stable and the urbanisation continue to happen with many new graduates from states such as Kedah or Perak moving to Penang, we can safely conclude that property prices in Penang will be pressured to rise. The consolation would be the Second Bridge, which has helped to open up more choices. This will do a lot in keeping prices in check. Already we could see some of the launches in Relau being priced back lower than RM500,000 or just slightly above it. There are also more SOHO being planned but these are on hold currently. Read about it here:
Freeze! SOHO in Penang.

If you are seriously thinking of buying your first property and has sufficient savings to do so, I think it’s best to proceed. Even if prices may drop if the world economy collapses but over a longer period of time, demand will definitely push up the price. If it is for investment, I think there are also other choices throughout Malaysia and not just Penang.

written on 5 April 2014

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Buying Penang properties near cemetery?

I read an article recently about buying properties next to cemetery. I would think any sane buyer would definitely avoid buying next to the cemetery. However, I have to admit that two of my properties happen to be nearby or opposite cemetery. How did both of the properties fare thus far? Well one has given me very good returns while another one would only start building next year. Why did I buy them? Good question. In fact, I have doubts as well. Especially for the one in Tanjung Tokong, called The Peak. Now to tell you the story of me buying the condo.

I was at the sales office, interested to buy a unit as the price per sf was still very low then. In fact, not even RM300 psf. This was despite other condominiums nearby the area being higher already. I was enquiring and asking quite a lot of questions to the sales person who answered everything impeccably. It was as if she had answered this a thousand times! I wanted to buy because I felt that the price would go up easily since it is such a low price psf. It was also a calculated risk because if The Peak prices does not go up a lot, I could just sell off the place I was staying then, Regency Heights and move to The Peak. Granted, it’s a smaller place but that’s the worst case scenario.

In the end, I bought a unit, my brother in law bought a unit and my father in law bought a unit. Recently my brother in law sold his unit for profits which a medium income owner would not earn for many years. The price he sold was RM580 psf.

What about my second property facing the cemetery? Well, I had the same argument when I paid deposit to book it. The price psf was still very cheap despite the condo having individual lifts opening ONLY at your doorstep. If it does not really go up a lot, I will just move from Regency Heights and sell Regency Heights. At this point in time, I am not so sure how this second one would turn out but chances are by the time it is completed, I would not need to take any action beyond putting it up for sale for a good profit, hopefully.

My take? As long as the view from your condo is not facing it directly and you have really done sufficient homework about the developer, the pricing in the area, the potential appreciation and a host of all the usual like location, price and design, I would think it is safe to buy properties CLOSE BY to cemetery.

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Buying properties? Think big, start small, my view

A senior manager colleague shared with me that over 10 years ago, he bought a shoplot. In his mind, he was thinking BIG. Despite just starting, he aimed at commercial property due to the
potential huge profit.
 Alas, nothing happened after it was completed. He thought it was the worst investment he has ever made and vowed not to buy another one. He had to continue paying for the loan and only recently, with the boom in 2012, the shop lot increased in price sufficiently that he sold it. He said, based on his total investment, it gave him a return of around 80%, divided into 10 years is 8% per year. Actually, this is really nothing to shout about but this is still 2.5 times more than FD. Sometimes, it is just the timing. Many times, we should think big but start small.

When you think about property investment, do you think of it as a potential or just another form of investment? I think of it as an
investment that one must have
. The potential depends on how you do it and perhaps a bit of luck. If you happen to buy and your condo was completed during a financial crisis, it definitely does not help. Nevertheless, as long as you have no roof over your head, buy one. If you already have a roof over your head and you like to buy a Segment C car then buy another property first. Chances are you may be able to afford the downpayment for a Segment D car instead, within five years time.

Do not however start property investment thinking that you will have repaid for at least one property in 20 years and have 2 properties fully paid for when you retire.
Start property investment with a goal of retiring earlier and be financially free.

However, start on a strong footing. Have sufficient downpayment before starting and not borrow from your relatives or friends to start the investment. Start right, start small. Buy a property which you can afford easily with your current pay. If you can afford to pay for a mortgage of RM2,000, then buy a property which only needs for a mortgage of RM1,600.  There’s nothing wrong with stretching yourself but it is very risky for you to stretch yourself to the limit just at the very beginning. If you are lucky, you may hit your first jackpot faster than majority but if you are unlucky, you are also the minority who somehow got bankrupt from property investment.

Thus, personally I have always believed that if we intend to get very rich, retire earlier than majority, real estate investment is a key investment we must have. Only one thing that I always remind myself is,
there’s no need to rush
. My first property was only RM123K, second property was slightly higher, followed by the third one at RM247K and this increased slowly over the years until my latest property few months ago at RM540K. I know, nowhere near a lot of really gung-ho property investors but it is ok. My property investment motto remains to be, Think Big, Start Small. Happy buying.

written on 9th May 2014

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Stop Buying! Bad economy, Covid-19 crisis and political uncertainty.

Yea, it’s extremely boring to stay at home. It’s extremely important though. While we have no idea yet if the Movement Control Order (MCO) will be extended but let’s just be safe instead of some huge gathering somewhere okay. The timing is also right after dinner which makes for a good and relaxing time. Kopiandproperty.com readers please do drop by okay. Questions are welcomed too.

PLUS lots of Lazada Vouchers to be won yeah. Only need to type in a few words win some money to shop from the comforts of your home! Here’s that poster. First event ended with over 200 viewers. Hopefully we will have as many if not more yeah.  Thank you all the awesome kopiandproperty.com readers.

On the coming 4th April 2020 @ 9pm (Saturday evening), I will be speaking on the above topic. Sounds controversial? I checked. Every word in the title corresponds to some factual happenings. I believe it’s an interesting one where we could have a good session in FB LIVE. Joining me will Malaysia’s most famous propenomist Dr. Daniele Gambero. He is also the one I go to every time I need numbers for some of my articles.
Get to know him via FB here.

Click here to LIKE and get courtesy reminder of the event
. Listen from the comfort of your home. Be on the lookout for the magic word and win Lazada Vouchers and start shopping!

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Buying property? Higher interest rates in 2014

Many experts / bank analysts are expecting the BNM (Bank Negara Malaysia) to revise upwards the OPR (overnight policy rate) by 0.25%. Typically this meant that the interest you pay for mortgage would go up by similar figure. Some say as soon as Q1, some say Q2. This is unavoidable due to inflationary pressures. As we know, subsidy rationalisation programmes will continue while toll rates are also going up next year followed by GST in 2015. For house buyers, do you know how much is 0.25% to you? Should you be concerned? Actually, if you own a lot of properties, then you should be worried. However, if you own just one property, unless you are buying above what you can afford comfortably, then you ought to be worried.

Looking at the chart in
http://www.propertyguru.com.my
, how a 0.25% affects the amount of mortgage that you would need to pay. If you are having a RM500,000 loan and you got yourself a 90% loan amount. With a tenure of 30 years and interest rate of 4.25% (Means BLR – 2.35%), you need to pay a monthly installment of RM2,214. If the interest rate goes up by 0.25%, you would need to pay extra Rm67. This is an additional increase of about 3%.

For people looking at buying your first home, this should not worry you too much. This is because if you look at it from another perspective which is potential capital appreciation, even a 0.5% increase on your property per year meant RM500,000 x 0.5% = RM2,500 which translates into RM200 per month. In other words, if you do not buy, you lose out on the potential capital appreciation. If you are buying for investment, think again, can your rental cover the mortgage after the increase in interest rate? This is because I don’t think this will be the only adjustment. If inflation really inches up too much, this may be just one of the adjustments for 2014.

written on 23 dec 2013.

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Buying property in KL for investment

Many years ago, whenever I come to KL to visit my friends or shop around, I will stay in my friend’s rented condo in Kelana Jaya. The condo’s name is Kelana Puteri. It’s a medium cost, leasehold, high density condominium. At that time though I have never felt the ‘medium cost’ because I was only staying in a medium cost 700 sf apartment in Penang. I have nothing against leasehold at all. You can read about my thoughts about
‘leasehold’
. As for the last reason, high density, I have never ever felt so before because the land area inside the condo was huge. There’s a huge swimming pool, by far largest I have ever seen thus far. Two tennis courts, two squash courts, a 220m square walking track as well as kid’s playground.

One day right opposite my friend’s rented condo, I saw a ‘for sale’ sign. I called and got to know that the price was RM195K. 1055 sq ft. Thus it was just RM184 per sq ft which even more cheaper than my 700 sf medium cost apartment in Penang! I searched around and got to know that the rental then was RM1,000 – RM1,200 depending on empty versus furnished. I called the agent, viewed the property and in the evening gave an offer of RM190K. The agent called back and said seller said min RM192K. I bought my first property in KL.

Within one month, I rented it out, fully furnished, with TV, Fridge, Washing Machine and whatever you needed. My friend asked, ‘are you not worried since you work in Penang and your property is in KL?’ Well, to be honest, even if I am renting out my apartment in Penang and I am working in Penang, of course I would be worried. However, my reasoning is, if you choose your tenant well, the risks are minimised. For 5 years, I rented the property out without any hiccups until I finally moved to KL and have a ready place to stay. 🙂

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Buying that property with reference to transacted prices? Possible yeah.

A good friend just bought a condo in Bangsar after a friendly negotiation. She was happy and the owner was also happy. The owner was a retiree who prefers the money and not the property. When my friend asked me how should she negotiate three weeks back, I told her that the first thing we should do is to know what are the recently transacted prices. I pointed her to a site I refer to occasionally.  Let us remember that just because people claim prices are up or prices are down but everyone knows that prices do NOT change unless there are actual transactions.
The site is brickz.my

Image below shows the project which my good friend is happily in progress of buying and she will invite me for a house warming at the end of 2020. I told her if it’s around December, then I will roast a turkey and bring over too. Yes, besides writing, I could also bake, roast and stew too. Cheesecakes… turkey… spanish meatballs…

It’s probably more important to understand that when markets are slower, the owners may be willing to list their properties at lower price levels. It’s also worth noting that the potential buyers may take this as a cue to offer even lower prices. What happens then is that the transactions may not happen and that’s why the Malaysian Housing Price Index still show a POSITIVE number instead of a negative one instead. Image below.
Info source is housingwatch.my

As you can see, the transactions in the first image did not show the unit numbers. If you prefer to know the unit numbers too, you may want to subscribe to brickz.my yeah. Click here to look at the packages available. By the way, there is no special price even if you mentioned kopiandproperty.com’s name. I happened to speak in the same event as its founder Premendran Pathmanathan on one occasion so I got to know about it better. Happy ‘property price’ hunting yeah.

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Buying property – Lawyers fee

Besides the 10% downpayment, what else do you need to prepare when you are buying a property? Actually, there’s another component which is quite a lot of money. Yes, it’s the lawyer’s fee. In fact, this can be quite a huge amount depending on the price of the property that you are buying. In fact, to be honest, when I bought my first property I forgotten to factor this in and even had to take out my fixed deposit. Sigh. Anyway, I hope new investors would not forget this. Let’s look at the calculation below:

As an example, if you are buying a RM500,000 property, how much lawyer’s fee would you have to pay? Look at the calculation below:

First RM150,000 x 1% = RM1,500

Remaining RM350,000 x 0.7% = RM2,450

Total: RM3,950

Then, you plus all the other fees as stated.

Now, are all lawyer firms the same? Let me tell you seriously, answer is NO. The lawyer will not make you fail in buying the house but they may not follow up closely enough and you ended up waiting one extra month if not more. Thus, it will be wise to ask your close agent friends on which lawyers are good. Alternatively, ask your banker friends. Once you found a good lawyer, stick to them. Can they give you discount? The answer is
NO……………..

written on 30 Jan 2014

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Viewing RM500,000 property online and buying it immediately? Oh… it happens?

Viewing property online is definitely very common these days.

I was speaking to a group of
Real Estate Negotiators from ERA Malaysia (click here to view their FB page)
 a few days ago. It was one of their training / learning sessions where they invite someone they think could help in increasing the knowledge of their agents. I hope I helped a little during my 2-hour session including Q&A with them. Lots of good questions were asked too.  One important point I shared during the session is that there’s too many organisations (usually proptech companies) focusing on ‘proptech’ and ‘online.’

Shampoo via online

Photo by Karolina Grabowska on
Pexels.com

Let me share one major difference between online purchase for a shampoo and online purchase for a home. In an online purchase for a shampoo, we need to make sure we have a great video showing a model washing hair and then show how smooth and shining the hair looks after that. Right after, a link appears which shows first 100 people to buy would receive a small bottle of the shampoo free.

If the video was awesome, especially the model, then this model works. Just make sure it reaches the maximum number of people and enough of them would click and complete the transactions. You send them the shampoo and hopefully they will continue to buy again when they finished it.

Photo by Vecislavas Popa on
Pexels.com

Property online

The scene shows a drone shot of the entire neighbourhood. Impressive. It then shows the views within the interior of the home. Nice. Potential buyer could also use their mouse to move to places they wanted to see more. This is great. Then, after the video or the 360 view of the interior of the home, a link comes up and asked the potential buyer to quickly place their booking because the unit would soon be running out or that this offer is only for the first 10 buyers. RM500,000 home? A click of the mouse?

People matters, a lot.

That drone shone we talk about, it must share the things that matter and this meant the human knowledge is needed. It is not about ‘this development is connected by three expressways’  (seriously, are there any development not connected by expressways these days? I wish them luck). It is about ‘within 3 minutes, one could reach the expressway 1 and have access to location A, B and C.’  One of these locations may be the one which the potential property buyer loves to go… You get traction for your development.

We assume the interior video has someone introducing it.  (If there’s none and it’s just a mute video, I wish this development the best of luck too because most videos do have introduction these days)

Who does the introduction matters

The interior video may have someone who’s not familiar with property investment and they do like this, ‘this is the living area and right next to the living area is the kitchen and at the end of the kitchen you have the wet kitchen.’  (Dear developer, this kind of info is already available in your brochure…’)

The interior video needs to have some human expertise and it may be something as follows: “Typical front door height is 7ft but this condo uses 8ft door because it gives impression of luxury.”

Or if it’s about floor tiles… “The standard floor tile these days may be 2ft x 2 ft but the quality and especially the thickness of the floor tile matters. For our customers delight, we are using…..”

Or if it’s about corridor.  BAD one: The corridor has 12 units… (this is NOT the most important point).   Perhaps this is way better as a knowledge to buyers too. “There are 12 units but there’s a huge difference here because the corridor has access to both wind and light. The developer did not maximise the numbers of units so that owners do not need to walk in a stuffy and dar corridors every time they go home.”

Will you buy a RM500,000 just because someone famous said so?

As someone who has been investing in properties, I am not buying a property just because the developer has gotten an attractive model or some famous personality to walk around and introduce to me things which I already know. I do not think any first-time property buyers should be buying any property simply because a famous personality say so. Buy when we understand how that property will fulfill our needs. This is why many questions have to be answered before we buy and this is an expensive decision yeah.

People matters more than tech even if tech is compulsory these days

Hope this explains why HUMAN will always matter more than the ‘tech,’ ‘tech,’ and ‘tech,’ which everyone seemed to be too preoccupied and has forgotten that there are differences in how we (the people) uses online (the tech) to sell to potential buyers (the people). There are developers who think just using online and I can sell (sorry… it does not work like this) and there are proptech companies who kept sharing how good their products are but has forgotten that content matters. All the best to everyone.

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Buying property – stamp duty and more

Besides the usual 10% downpayment and the lawyer’s fee, every new buyer must also be aware of all the other additional fees and charges. Stamp duty is how the government taxes you for your property purchase. Typically, stamp duty would be based on the following:

1% for the first RM100,000, 2% for next RM400,000 and subsequently, 3% for any amount after that.

To illustrate, for a RM500,000 home, you would need to pay following:

RM100,000 x 1% = RM1,000

RM400,000 x 2% = RM8,000

Total is RM9,000

The rest of the other fees are not as much as your downpayment, lawyer’s fee and stamp duty but can still set you back a bit. I will not go into one by one but you may refer to a very nice infograph by imoney
here
. Get ready your Excel sheet and start putting in all the necessary fees. Keep that file for continuous usage. You would not stop at one property, that’s for sure.

I know, after you have calculated all the fees you may feel a little overwhelmed especially if this is your first purchase but rest assured, it is also this reason that majority of the first time buyers has yet to purchase their first property. If you have the capability and can make the decision to proceed, you now belong to the minority and do you know what happens to minority who’s ahead? They stay ahead as they continue their journey in life. The only advice would be to ensure what you buy is really what you need and not what all your friends say you need. Also, for 2014, I would advise that you buy secondary property if you are looking for your first property. Lots of diamonds in the rough in the secondary market at this moment.

Do not forget, there is also the renovation costs. If possible buy one which is renovated. If not, then set aside RM30,000 for basic renovation of kitchen, lightings and fans. You can do it for lesser if you have a good friend who’s doing renovation. I do not believe you need to make your home look like a ‘palace’ because later on when you need to sell your ‘palace’ you may regret all the money you have spent. A ‘palace’ to you may just be an unwanted renovation to your potential future buyer.

Happy buying.

written on 30 Jan 2014

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Buying property, thinking about size, price, distance? Rawang perhaps.

Damansara Damai is far. Sungai Buloh is far. Rawang is so far that even my wife could not accept nearly 2 years ago. I tried to bring her to one project and she declared right after that I need to look for other projects. I think at that time she was also affected by the fact that Rawang is just not that well developed yet. Fruits stalls beside the road and no huge malls for shopping. I agree and we changed from Rawang landed to my current place which is actually not too far away.
Armanee @ Damansara Damai.
 Anyway, this may change if Low Yat Group’s huge plans come to fruition. It’s trying to develop Bandar Tasik Puteri into a township encompassing residential, commercial and recreational components and it is spread over an area o 2,670 acres. Yes, that’s huge when compared to majority of the newer integrated projects of today in more prime areas.

The main catalyst that Low Yat Group is investing would be via the Bandar Tasik Puteri interchange linking into the LATAR Expressway (Kuala Lumpur – Kuala Selangor expressway). Once completed, this will reduce the time to drive into the KL City Centre to less than 20 minutes. This is the good news though this will only be completed in 2016. Of course, with the jam in KL City Centre typically starting from 730am onwards, staying in Bandar Tasik Puteri meant that it may be more prudent to leave home at 7am. This is something that I am doing today so that I arrive at my office just before 8am everyday. The LATAR expressway will also make connection to the NKVE (North Klang Valley Expressway) and Guthrie Corridor Expressway (GCE).

The commercial area would comprise 500 acres and includes a shopping mall, medical institution, colleges and office spaces. Perhaps, I can relook Rawang once that new shopping mall plan is up and running. Currently, there are the following hypermarkets, the Aeon Rawang Shopping Centre, Tesco Hypermarket and Giant stores which are located adjacent to the development. If you like gold, the 27-hole Tasik Puteri Golf & Country Club is an attraction to you, complemented by a resort-styled clubhouse, 24-bay driving range, restaurant outlet and other amenities such as two multi-purpose function halls and VIP function rooms for private gatherings. There is also a 33-acre Puteri Central park for its residents. Perhaps I can drive there and take a look one of these days.

Okay, for those who are thinking of Rawang, this may be a good choice to take a look. If it’s just 20 minutes away within less than 2 years, buying now may save you a lot compared to if you buy it when the link is completed. Think about it objectively. Size vs price, distance and potential. How you balance this will determine your decision.

written on 16 Oct 2014

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Buying Property? Wait for Special Deals, Shhhhh……

This is dedicated to those who have just been offered special deals. I receive these
 special deals all the time.
 A good friend said, ‘please do not tell anyone. I have this special deal from my friend’. I asked, is her friend the developer of the new development? The answer was negative. Her friend had the offer from another friend. Great. Special deals which would normally start with the developer went to the developer’s close friend, and that close friend told another of his close friend and that other close friend told my good friend. Wow, this is really a special deal. I am not sure how many units are under this special deal but if there are limited units, based on the chain of communication, I think the special deal should already be over. If there are still units available, it meant the deal is either not really special or perhaps the number of units are way too many which then defeats the purpose of a special deal in the first place.

Apologies. I am very sure if you happen to know the son of the developer, perhaps he may be able to give you
special discount
 and if you happen to be a vendor, you get associate discounts which normally is around 5%. I do get these associate discounts on and off. However, to ask me NOT to share with anyone and telling me that it is a special deal which is not open to public yet, I would normally say, ‘no thanks.’. To me, if I am the developer, my most main concern is to finish selling the development. I would not be in the market to offer special deals to make my friend, their friends and their friend’s friends richer through these special deals. No pun intended. If you are the developer, would you just want to sell quickly or would you try to offer special deals to everybody? Including many whom you would not know anymore since it’s your friend’s friends’ friends?

Even if the special deal is true,
think objectively
 before accepting them. One example, do your own research. Is the price per sf offered to you really special versus the area or is the price special compared to the actual launching price next year? If the price is really lower compared to current prices at the area, then I think you may want to consider the special deal. If however that special deal is already priced similar or higher than the current prices but the developer tells you that once he launches, the prices would be even higher, I normally say no to such deals. Remember the current property prices? Well, the higher priced ones are already under pressure under current circumstances. It’s also harder to sell, especially the perceived to be too high priced ones.

I told my friend, if she has done her research and felt that the special deal is indeed a special deal, please proceed. It’s ok, I will let this special deal pass this time. Perhaps one day when one of those developers I am close to offers me a really special deal, I will accept. That day has yet to come and I am still waiting. Haha.

written on 2 Nov 2014

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Buying property with BITCOIN?

What is bitcoin? Today two of my most advanced colleagues told me about the amazing bitcoin. I admit I do not know much about it and thus I googled for it. I found something interesting which I would like to share about Bitcoin. This is a currency which belongs to no country in the world and yet it’s goal is to become the currency of the world. Wait a minute, what is Bitcoin? How do you exchange for Bitcoins? What’s the value of Bitcoin versus your own currency? How much is RM1,000 in Bitcoin value?

Do not be surprised. Bitcoin is no longer something which you can say, ‘it’s just a fad’. In fact, there are already buyers who are willing to accept bitcoins. read here:
http://m.stamfordadvocate.com/news/article/Bitcoin-enters-realm-home-buying-5079500.php

In China, a developer has advertised that it will accept bitcoins as payment for its new development.
http://www.finextra.com/blogs/fullblog.aspx?blogid=8475

However, in the same country, China’s Central bank has banned bitcoin and has virtually clipped its wings. read more here:
http://m.bbc.co.uk/news/technology-25428866

What about Bitcoin in Malaysia? A search in google revealed that it is indeed becoming very popular. Now, I answer my two friends. I do agree, Bitcoin is something which is becoming very big. In fact much bigger than what I have in mind as I read about Bitcoins many years ago. However, if you ask me if I would be investing / adopting Bitcoins, my answer remains a firm no. The reason is because there cannot be a currency for which exchange rate can continue to go up and people earns thousands from it. Some even earn enough profits from the exchange rate to buy an apartment!

Read here:
http://www.news.com.au/finance/money/norwegian-student-kristoffer-koch-buys-27-in-bitcoin-in-2009-now-he-owns-an-apartment/story-e6frfmd9-1226748159679

Today, I have read just 20 articles on Bitcoin. I did not choose to read pro or against bitcoin articles. I type ‘Bitcoin’ in google search bar and all the articles showed itself. I believe in working hard. I believe in creating value through better products. I do not believe value of any currency should be created out of nothing or without fundamantals. That is called speculation. One day, perhaps Mc Donalds may accept bitcoin as payment. Perhaps then, I may use it if I have no cash with me and I have just my smartphone.

written on 23 dec 2013.

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Buying renovated property? Here are 3 advantages.

I have purchased more new properties versus secondary renovated properties thus far. I own residential properties in 7 different cities / towns in Malaysia as of currently. Whether secondary property market or even new properties, both have their own advantages. For this article, from my experience with renovated units, let me share at least 3 advantages. To show that I am not just writing without proof, I will share 3 different renovated units I bought. Here are some of the renovated units I have purchased since 2002.

My first property was a renovated unit
 (way back in 2002)

The first time I bought a property, it happened to be a partially-renovated unit. The owner sold it because he was moving out to stay at the upper floor of his newly bought shop-house. It was walking distance to his shop-house too. He extended the bathroom in the master bedroom which meant that I saved many thousands of ringgit in advance. Without this extension, I would have to do it because the toilet design from the developer for the master bedroom was extremely poor.

My first property outside the state I work in was also a renovated unit

I was still working in Penang when I decided to invest into a property outside Penang. It was a condo in which my wife’s best friend rented a unit. We always stay at her place when we go KL then. My first condo in the Klang Valley was in Kelana Jaya and it was also a renovated unit. For this unit, I did not do any further renovations because the kitchen cabinets were fully done up to the ceiling, the master-bedroom already have built-in cabinets. I have saved easily RM50,000 from all the renovations done to the unit by the earlier owner.

My first property after I moved to the Klang Valley was also a renovated unit

This unit came with 6 air-conditioner, a twin-door fridge, lots of built-in cabinets in the whole unit; living room and all the other rooms. Kitchen cabinets were from IKEA. I have saved easily RM100,000. Not everyone will like the renovations done by the earlier owner. Thus, I think it really depends on whether we could accept or we would still have to spend money to re-renovate the unit.

Now let’s talk about the 3 advantages.

#1 Discounted price versus total renovated costs

If the property’s market price is RM500,000 and the total renovation is RM100,000 what is the price which we could buy the property? It’s definitely lower than RM600,000 because no buyer would pay for the renovations which was not his / her idea in the first place. So, instead of RM600,000 the selling price may just be RM550,000 and the buyer gets to save a lot of money!

By the way, no buyer is willing to pay for the renovation costs yeah. Thus renovated unit in the secondary market is considered value-for-money units.

#2 Savings in many necessary renovations

Many times, bathroom renovation is necessary versus the typical one given by the developer. This is easily RM6,000 – RM10,000 depending on the size and quality of the renovations. Meanwhile, a kitchen cabinet is also definitely needed and with just a length of 10 feet alone would have been a few thousands too. Many times, these renovated kitchen cabinets would have electrical cooker and hob built into them and these are again, thousands of ringgit depending on the brand.

As usual, curtain railings done meant a savings of a few hundred ringgit and we just need to get the measurement to do new curtains. I could go on but I think you get the idea. All these necessary renovations meant that I could now focus my funds on other things such as a higher qualify sofa, a better bedframe and mattress, a twin-door fridge, branded air-conditioners etc.

Else, all these would have been extra costs for me, not to mention I needed to buy something cheaper since my funds would have been stretched thin because I had to also allocate it for renovations too.

#3 We Save Time and Effort

A friend just said that all the renovation timelines given by the contractor is never accurate. It’s usually off by a couple of weeks. (I think it also depends very much on whether the owner decides to change this and that half way too…) Anyway, typical renovations may take 1 – 2 months. Very extensive ones will take longer yeah. Thus, if we buy renovated units, we have saved a lot of time.

However, it’s not just the duration of the renovation which is long. It will also mean we needed to occasionally drive over and check the work progress and this also takes away our precious time as well. Might as well use those extra time for a dinner with family instead? Or to bring the kids to the playground instead? Lots of things to do versus just driving over and checking progress…

Not everything is awesome with buying a renovated unit yeah

You may not like the renovations (the colour may be a colour you hate). The owner may have holding power and may refuse to sell it at market price as the market price is for bare units. Most owners would want a little premium if their unit is a renovated one. They would like to lose less money since they have spent so much for renovations.

What if you really and totally dislike the renovations? Move on to the next unit lah. Surely it’s better to buy an empty unit then. If you want to renovate the unit to your highest satisfaction, its best to get an empty unit and start everything from scratch too.

Depending on how you do it, it’s really possible to reduce the overall expenses to a minimum. Time and effort must still be spent though unless we have a contractor who knows our wants and needs very well.  Happy buying a renovated unit or if you are getting an empty unit, then happy renovating.

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Buying a renovated unit, why not?

On and off, I would browse
propsocial.my
 and today I come across a topic which seems familiar to me. The discussion was about how much would one be willing to spend on renovation, assuming one has just bought a new home. If you would like to follow or comment on the discussion, it’s here:
propsocial renovation discussion

I have renovated some of the condos I bought, including the first apartment for which the renovation included some hacking here and there and an extension of the master-room toilet as well as a rebuilding of the kitchen. Total was RM20,000. That was 12 years ago.

Since then, most of the time when I buy, I almost always aim at a renovated units. For example,
my unit in Kelana Puteri
 came with full kitchen cabinets and built-in closet for the master-room. The owner even left behind lots of other stuffs which meant that getting just one TV, one fridge and another washing machine and I could rent out the place almost within one month of getting the keys to the unit. The unit I am staying now in Damansara Damai came with over RM100,000 worth of renovations and the
kitchen cabinets are from IKEA.
 Whether we are buying for investment or own stay, it may be better to buy a renovated unit. It saves you time, effort and money.

Time. Think how much time would you need to buy all the necessary white goods. You intend to buy each and everything from one shop? As long as you are okay to pay more, I think you save a little bit of time. What about the time needed for the unit to be renovated? You could not start renovating before the keys are handed over to you.

Effort. Lots of effort. If you are not working full-time, this can be managed. If you are working, are you sure you want to spend your weekends doing all these stuffs? Getting a good contractor, ensuring the contractor does his job properly, rushing to meet him a few times during the duration of the renovation. Nope, that’s not something I like a lot. I prefer to have more time for my loved ones, including even mamak time with friends instead.

Money is the big part here. Today, if you are going to do kitchen cabinets, do up a more comfortable toilet, buy some electrical goods and furnishings and install fans, lights and one air-con in the master-room, this would already set you back easily RM50,000. Why bother with this when you could have bought one with everything ready.

If the renovations were totally out of this world and you dislike it too much, then move on. Do not forget the forest just because of one tree. Yes, if you want to unleash your creative juice, it’s better to buy an empty unit. The reason is because if you buy a renovated unit and you dislike it, just dismantling the existing renovations would already cost you lots of money. Happy renovating.

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written on 17 July 2015

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ABCs of Buying and Renting Out a Property (successfully!)

ABCs of Buying and Renting a Property

I was listening to another of my favourite songs, ‘Yesterday One More’ the other day and someone remarked that the song has been around forever. I told her that I agree and in fact a good song is a good song no matter what generation it came from. If it’s a bad song, it’s a bad song even if it is the latest song… She laughed and agreed. Sometimes, there are things which are evergreen and this is true even for investments.

Buying a property and renting a unit out is not easy

When things are just too easy and everyone is doing it, what are the chances that we can get a piece of the action or that the returns are still respectable? Buying a good property requires some understanding of what you are buying. Renting out a property requires some effort, some knowledge and sometimes whether or not we are lucky.

I have properties which have been rented out in a few cities / towns in Malaysia (none overseas…) and the first one in Penang was rented out after I bought my second property and moved to that property in 2008. I bought my first property out of Penang (when I was still working in Penang) and rented it out successfully despite me still being based in Penang and the property was in Kelana Jaya.

Yes, it can be done successfully and definitely everyone can start from the first one… and then the next one… and the journey could continue.

What about challenges?

There are aplenty! Haha. Please do not think I will tell you that everything was so easy, relaxing and without any hiccups throughout the years. If I do, I am lying yeah.

#1 – Bought the wrong property
Please remember that a property is usually the most expensive asset we would be buying and thus it is super important to know more before signing a home loan agreement tying us to the property loan repayment for the next 30 years.

#2 – Bought the wrong area
  There are established areas and there are upcoming areas and there are also areas which could take a very long time. Research these before starting. Prices are different and of course the challenges and returns are also very different. Established areas are most expensive but will have ready tenants. Upcoming areas will take time but may provide a decent return on price appreciation.

#3 – Prefers to do everything to ‘save’ money
  Let’s always engage the right professionals to help us in our property investment journey.  There is no need to do everything by ourselves because the professionals are there for a reason. They help us in our property investment journey. From renting out to managing tenants and even maintenance of the unit, just find someone and not be the one!

#4 – Thinking of quick and big money
   Property investment takes time. Buying takes time. Settling all documentations takes time. Renting out takes time. Renting out to new tenants take time. Property price appreciation takes time. You can see everything takes time but the returns are very respectable if we take a long term view of 5 years or higher. (My personal and real experience and I have properties in 6 cities / towns in Malaysia today)

How do we start?

#1 – Choosing the right property.
  This is the base.  Know what we really want.  If we like office professionals, then do not buy into places without access to the Ts; the LRTs and the MRTs. Most of these office professionals may have a car but it does not mean they prefer to drive daily. We just need to note that because the office professionals are now more prone to change jobs, there is a chance that your tenant may inform you suddenly that they are moving out.

#2 – Choosing a more ‘evergreen’ tenant?
 We could also choose to rent out to tertiary students too. The good thing about these tenants would be that they are more stable and is usually more predictable based on their university semester schedule. Second thing is that this is also ‘evergreen’ for the foreseeable future.

Most parents are still super proud if their children are a graduate today. I am already making sure my children would also get a degree in the future too. They are just 9 and 7 respectively today! 😊  Your potential tenants would not include my children because their father would also be ‘renting’ out to them too!

Key to renting out to tertiary students?

#1 – Established location, preferably an education influenced township
  If we prefer to have tertiary students, then choose an established area where there are many universities and where there are already a ready pool of new students every year. Do note that all universities are back to normal face to face lectures today. One such example of an education township is Bandar Sunway. Always busy, always tough to get a parking spot and never ending food to try.

#2 – Renting out by rooms are easier than whole unit
I did not know any of my other student housemates when I was studying in Subang Jaya way back in the days when there were fewer university choices. I think it’s the same today because most students would be meeting new friends in the university for the very first time too. This is why renting out rooms by having split-meter would be easier than trying to find a group of students to rent the whole unit.

#3 – Minimize risks especially with the uncertainties of today
Renting out by rooms also meant that the risks are minimized even if just half of the rooms were rented out versus not having the whole unit rented out. Some income is better than no income and truth is, when the semester starts, it gets even harder to rent out the whole unit versus just a room or two rooms.

Conclusion

It has been extremely rewarding for me when it comes to property investment. I have a diversified portfolio of share market stocks, unit trust and sufficient fixed deposits. At the same time, I know that this is an evergreen theme because we can look at advanced economies and we should see that properties are getting more unaffordable and prices never stop growing because of inflation effects. Remember yeah, when value of money gets smaller, the prices just move up to balance the change. This is why a bowl of noodle used to be 10 sen during my mother’s time and it’s RM8 today. (maybe higher..)

Do you want to know more? Ask more questions? Come drop by The Property Table Talk: Is Student Township a Future Proof Investment?
Register here and get FREE Touch n Go card! (Limited to first 50 only yeah)

I have not seen many of you for a very long time. Do come and say Hi! I am one of the three invited speakers too.

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Yes, buying non-essential stuff restarts after such a long time. (not yet in Malaysia)

Today is 4th May 2020.  It was the
first day 1 Utama is open full day.
 10am to 10pm.  Its Facebook message says ‘May the 4th be with you.’  I did not go, yet.  However, will be asking if my friends have gone as well as how’s the actual situation in the mall.  Image below, do visit their FB page to see all the shops which are open yeah. So, if you are there, what would you buy?  Would it be just a cup of coffee and watching people walk by?

For shoppers, there was this positive news about retail.  At first, it was the luxury good shopper news from China. It’s not the typical handbags yeah. It’s Hermes.  Earlier article here:
Revenge buying, what’s that?
   Then, there was this news about the tourist sites seeing an influx of tourists in China which was also confirmed by my friend in China. Now, there is news from South Korea that South Koreans have also started ‘revenge shopping’ and they have a term for it in Korean; ‘Bobok’

Article in uk.reuters.com
   At the Lotte Department Store there were long lines of shoppers.  29-year old Kim said, “I’m out shopping for the first time since the Lunar New Year holiday.” She showed her newly bought clutch and said to a reporter, “It’s so warm and so good to be out finally.” Shoppers and travellers thronged malls and expressways were jammed with people leaving Seoul to go to vacation island of Jeju.

Seoul began easing curbs on April 19 and has managed to bring down new daily infections from over 900 in late February to around 10 in the past week. In Jeju, travellers were at the beach, ate Korean-style barbecue and play golf. The mask was abandoned to enjoy the 20-degree Celsius (70 Fahrenheit) weather.  Please do read an even more comprehensive article about this ‘revenge shopping’ over there in South Korea.
Article in uk.reuters.com

Some say even if the malls are open, the number of visitors are likely to be way smaller than normal. Let me say, if the retail units remain closed, their sales numbers are ZERO.  If they open and could get a 20% sales in the first month and slowly increasing over the future months, they have started the road to recovery. What’s even more important is for us to wear our masks, keep oursocial-distancing measures and well, buy a bit here and there.

As for the malls, of course they have to redouble their efforts to ensure the cleanliness of the mall while at the same time throw some very attractive offers to shoppers. By the way, before everyone forgets, the Movement Control Order (MCO) is still on until 12th May 2020. Today is just a relaxation of some measures.

This is what my Director General of Health Datuk Dr. Nor Hisham said, “We did not end the MCO. The perception that we have lifted the order is wrong,” said Dr Noor Hisham. He shared that the government had relaxed the MCO to a certain degree based on criteria listed by the World Health Organisation, which include empowering the community to possess strong social discipline to live in accordance with
new norms. (read full article on his statement here)
  Happy shopping but please stay safe.

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Thinking of buying stocks? Here are 7 themes to consider by CGS-CIMB

There are many ways to enter the stock market. Getting to know the theme which we like and buy accordingly is one of the ways. The below are the
7 themes by CGS-CIMB and the full article is here in edgemarkets.com (click to read)

Right below would be the stock picks by CGS-CIMB and these are their picks for H2 2021. Just need to note that all the picks are based on all the current circumstance. So, if everything turns out better, then their stock picks may do better and if everything takes a worse turn, then maybe their picks would also not perform.

This is what they anticipated. “Its analysis suggests that the Government can achieve its target to fully vaccinate 70% of the population by November at the current daily vaccination rate.“

Image source: TheEdge Markets

This is why it is so important to read the themes and pick those which we think makes sense to us. At least if it goes wrong, the person who made the decision is us. The information is provided by them. CGS-CIMB gave us 7 themes. If you like to read all, please click this article yeah:
7 themes by CGS-CIMB and the full article is here in edgemarkets.com

I will explain 3 themes which I think is quite easy for everyone to understand. Note that these are random in order and I do not have any shares in the companies under these three key themes too. The three themes are as follows:

#1 Laggard Play. These are the stocks which are 20% below pre-Covid levels. In other words, the upside may be coming because these stocks were impacted by Covid-19. Thus, the price has a potential for upside.

What this theme is basically saying is that the stocks are undervalued based on their current performance. Just need to remember that there is no guarantee they can continue performing yeah. If you like to know what are these stocks, look at the image above yeah. Some companies you know may include Tenaga, Gamuda, Genting and UMW.

#2 High Dividend Yield companies.  These are companies which if we buy at its current price, then the dividend which we will receive is actually very attractive versus current fixed deposit rate. In fact the companies quoted really do have very attractive dividend yeah. Kossan Rubber Industries Bhd (DY: 19.1%, TP: RM4.20), Hartalega Holdings Bhd (DY: 9.3%. TP: RM8.50), Astro Malaysia Holdings Bhd (DY: 7.8%, TP: RM1.51), Sentral REIT (DY: 7.8%, TP: 99 sen), and Taliworks Corp Bhd (DY: 7.7%, TP: 93 sen).

#3 Beneficiary of OPR rate hike.  I think you can guess who will be the beneficiary companies under this theme. Yes, the list includes many banks. When the lending rates are hiked, the banks could earn more from their loans as the rates increase would be immediate while the Fixed Deposit rates are time based. Thus, profits usually increase under such circumstances.

The list of the banks with their target price is as follows: Public Bank Bhd (TP: RM5.30), Malayan Banking Bhd (TP: RM9.30), and Hong Leong Bank Bhd (TP: RM20.78).

There are 4 other themes too. Just read the article:
7 themes by CGS-CIMB and the full article is here in edgemarkets.com

I do not own any stocks listed in this article. I also have nothing to gain yeah. So, your decision on which theme to follow if it meets your expectations is really your decision. Happy thinking and deciding yeah.  Take care and stay safe.

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Buying terrace houses in Rawang below RM300,000

You are not joking right. There are no such landed properties available anywhere in Malaysia? Not entirely true. Let’s just look at Rawang which to many is too far off their radar in terms of properties. However, if you meet the three criterias below, hey you are in luck. There are really such properties still available in Rawang. Terrace houses for less than RM300,000!

You can refer to any online site. This one that I am referring to is iproperty. The three criterias are budget limitations, location limitations and neighbourhood limitations.

Budget limitations. Get real, you cannot even buy an apartment in many places in Klang Valley for this kind of price and yet here we are talking about a landed property which allows you to part two cars inside the house and one car outside the house and perhaps another car opposite your house. If you can only qualify for a RM300,000 loan, this should be one of the best choices you have already.

Location limitations. You do not care where you buy, as long as it is within 35km from city centre. Without any jams, you can breeze into the city centre within less than half an hour. Maybe even lesser. Oh, Rawang has got terrible traffic jams. Well, may I remind you that Bangsar has got jams. Mont Kiara has got jams. USJ has got jams. Hmm…. I think nearly every place has jams, be they near or far. Cheras is just few km from city centre but tell me honestly, how long does it take to reach office in the morning if you start at 8am? 🙂

Neighbourhood limitations. Great, you have such a budget and you want to choose your neighbourhood. FYI, when I bought my first apartment for RM123K, my friends said you are buying into a ‘bad’ neighbourhood. I stayed in that ‘bad’ neighbourhood for nearly 5 years before upgrading to another ‘not so awesome’ neighbourhood. Life or in this case, neighbourhood is what you make of it. Be nice to everyone.

Perhaps this may just be your best choice. Always remember, acceptance is better than tolerance. If you can accept the three limitations, you have just got yourself a LANDED property for below RM300,000.  If you cannot accept but merely tolerate, you will have a tough time. Please do not buy.

written on 3 march 2014

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