a simple silly questions here. an investor who would like to invest in property would require loan for each property. assuming this investor is an average salaried person, how would he be eligible to apply up to (lets say) 1 million of loan (in several properties)? does it have anything to do with tenancy agreement and bank statement to show that rental income has been coming in regularly?

This post has been edited by vdfoo: Mar 6 2010, 04:18 PM

according to the experts, yes, the loan will be most probably ok if you can show the tenancy agreement...

bear in mind investors cant get 90% percent after a few loans..

Yes, as long as total income meets the banks DIR requirements n assume CCRIS is good, then no reason why bank would not lend. I used to earn around 3.3k a month, and got a total loan of close to 600k approved, with monthly installments almost 90% of my monthly salary.

I wouldnt encourage everyone to do the same, but I suppose this answers TS question......

If you ensure each property can be consistently rented out at >> monthly loan repayment and cost, the more you buy the more you can borrow

The first 2 properties you can get 90% but as taking more units, it will be classifed as investment thus your margin reduced to say 70 ~ 80%.

Inherent risk : reduced loan margin & rental income from tenants.

A scenario question (example only):
Say...
1) An investor bought a property price at RM 150k with monthly repayment of RM 750 to the bank. And rent out RM 750.
2) After x months, investor bought another property price at RM 150k with monthly repayment of RM 750 to the bank. And rent out at RM 750.
and the process continues for 10 times...

After 10 times, the investor had bought a total of 10 properties price at RM 1.5 million with loan RM 1.35 million (assuming down payment of 10%).
And currently repayment to the bank of RM 7,500 to the bank and rent out at RM 7,500.

Say, 5 years has passed and everything looks good until something happen... and 8 unit is unable to rent out for 3 months already meaning the investor have to fork out RM 6k every month to the bank... once the cash flow of the investor is getting thin, and unable to does the RM 6k repayment, then what is the next action???
Below are the assumptions:
- Unable to find renter for the 8 unit
- Less people wanted to buy the property
- Buyer offer way too low to buy the investor property

I highly doubt there would be a banker financing such escapades of acquiring say.. 10 units of house for rental if the income (main source) is unable to sustain the loss of rental.

Repayment : RM 750 x 10 = RM 7,500 p.m.
Rental : RM 750 x 10 = RM 7,500 p.m.

If Income is say. RM 3,000 p.m. still unlikely to get all 10 units. Besides there is lower margin of financing to consider.

That is why commercial unit would be better bet if you rented out to say..Pizza Hut or some other notable companies. Bank can consider assignment of rental proceeds to hedge the risk of non-payment.

Still RM 3K vs RM 1.5 M loan ?

Is the red color statement confirm as in bank loan policy pre-requisite??
The scenario does not account for purchasing 10 units at one time...

There is one bank in particular will loan 90% up to 5 property. Number 6 will drop to 70%.

I am lucky all of my property got 90% loan.

jasonhanjk - yes, lucky.

arthurlwf - the pre-requisite requirement for house financing is dependent to the Financier's risk management. There is words in the street that certain Bank right now is agressively acquiring cases. But basically it is repayment 30% against gross income.

really?
dont reach 5 yet.. so, dont know.. hehehe
how about other bank?
which bank you apply for the 6th loan onwards?

HXBC, JB.

I've heard forumers not getting their 2nd 90% loan from this bank in KL.
So depends on luck too.

wa.. all 5 property 90% loan.


This post has been edited by airline: Mar 13 2010, 01:51 AM

Yup, I heard they usually wont approve if you already have many loans.

But assuming if a person has bought 5 property and all are rented out and can cover the bank monthly repayment, and his salary is RM 5k.
Can the person continue to get loan for his/her 6th property?

Can still get loan, but may not get 90% margin anymore. Depends on bank, some are strict and some are more lenient.

so far 4loans all 90% but only 2 rentals.

public bank 4th loan offer 80% only. eon bank gave me the 4th at 90%.

Yes it's possible, but the underwriter will assess the risks associated with the borrower, and more often than not, although you have the tenancy agreements, the next loan will be very hard to come by. One way to do it is to submit concurrent loans, but you gotta have lots of conversations (ie explaining) to banks, but that is my MO so far, and while I don't get 90% for all of them, the margins were acceptable.

Tenancy agreement, concurrent submission, good CCRIS and CTOS standing all contribute to higher loan amount.

Yes its possible. Its even possible to get 100% loan for your 5th commercial property. Nego SPA price, nego with valuer etc.. And yes its possible to take multiple loans. Normally bank allow up to 60% or some 75% of ur salary.

But if u have a good record, you can go up to 80% or like what pie said, 90% without tenancy agreement. With tenancy agreement, i've gone almost 290% of my original salary. It might be hard to get it approved. Once i went to 14 banks to get a loan approved. Its hard but, it is possible.

Good luck trying.

This post has been edited by koopa: Apr 4 2010, 01:16 AM