Statistically I'm 95% sure of that but there's always the element of risk. Nevertheless if we are investing, it means we must have the capacity to hold when things go bad. If we are speculating without the holding power, I suggest to back off until have enough ammo for these kind of properties.

So maybe I wasn't precise when I say just 3 years. But if you average the yearly rise of inflation, the discounted factor will surely suggest that all prices will go up eventually. And when I say holding power, it means you hold longer than 3 years. In fact, we should be prepared to have vacancies for 3-5 months when it's completed. Since it's freehold, the holding risk is not that bad unless got 2012 stuff (touch wood x 3).

Problem is many people are treating this industry as a gambling den.

then would it be a good investment for rental yiled if you know you are competing with 5000++ unit which complete at the same time. it is always go back to the demand and supply. If you go for cap app, must well go landed with that price. If you go for rental, competing with 1040 units itself and others. How long for the market to absord 5000 unit at one go.
Holdoing longer than 3 year, mean holding without rental for 3 year? Are you sure this is a good investment then?

If the rental covers the interest, it's good enough and I think the current rental yield covers more than the interest. Of course if you are buying with cash then the rental yield should cover more than 3-4% of the total investment. Like I say, the demand of these properties is elastic meaning the small price reduction (not that I recommend that because it's better to let the market sets its equilibrium) will lead to the consumption. However the 5000 units will like shift the curve slightly to the left but then again the consumption should equilibriumize the shift in long run.

Your suggestion to hold it without rental seems to imply on an extreme circumstance. I was referring to holding this with MPRR (minimal possible rental rate) which covers interests and other costs (like maintenance, sinking fund, etc). Eg if a unit is around 450k, the repayment is 2.2k with average interest of round 800. If rental is set at 1,300, it should cover these cost and opportunity cost is the interest of 3-4% which could be leveraged by capital appreciation rate.

But then, the decision to buy or not largely depends on one's portfolio and the objectives of one's investment endevours. I guess this is the point where we concur that we agree to disagree.

Someone posted the showroom pictures earlier, I feel that it looks nice could probably due to the high ceiling (spacious feel), developer's show unit might not reflex the final finished product, many times they like to modify (misleading) the ceiling height to attract buyers' attention.
Do ask for the actual height, normally is 9'5" - 10", if 11", then it is great design (which I dun think so)

This post has been edited by UFO-ET: Jul 3 2011, 02:08 PM

Friend,

if you mention in long run, then i have nothing to say as most property will have this in long run. But as i mention this will drain the cashflow dry trying to competing for tenant for the first few year. 2 issue here :

1] too many units at this area same time completing - tenant problems
2] the price for a unit is about $650k for a 750sf unit, so with current 90%($585,000) loan for 30 year shall be around $3000
that mean 3000/750 = $4.00/psf + 0.40 sinking + maintenance fund = $4.40 psf
correct me if i am wrong, most KLCC area condo is renting at RM3.50 psf (iproperty) now and it is not high dense condo
more over, the site is not consider close to KLCC area as it is not walking distance to KLCC - 3km is not walking distance to me.

so , if you face issue getting tenant and rental yield issue, why not get a better investment?
your posting up there is merely buy for the sake of buying and think that all property will go up in times
yes, but appreciation will defer in your selection and your cashflow will defer..my friends

may not be correct but just my 2 cents

the price to expensive la for this class of property maybe developer speculate the price to high already something like the raport a apartment nearby and design also not that good(after 3 years of construction this type of design already not trendy anymore) compare to m city and other condos the concept is not to my taste i mean there can do better and count all small details that investors will notice.furthermore we are leaving in malaysia why leave in a house so compact unless you are a bachelor and i dont think is a good investment the price will not hike up that much also for renting maybe can buy.

As I've said, this is the point where we agree to disagree but hey I guess our discussion does help others who are assessing these places for investment.

As to your calculations, maybe correct in general but specifically it's not. Again this depends on the individual's portfolio of investment.

On issues of tenancy, I guess everywhere has the issue and in your assessment your general perception is the Ampang area is a problem. Likewise areas like Kajang, Damansara, etc have loads of projects up too. So I cannot agree that this is a problem faced in Ampang. As to the extent of impact of new projects, one cannot confirm whether Kajang, Ampang or Damansara have the most impact. I guess no research has been done on that.

Also, it would be silly not to know that the capital appreciation of properties are no longer inline with rental yield. But again, if proper research is done and the results turn out to be ok to your portfolio, why not? As to whether all properties will go up in time, theoretically it will due to inflation and discount factors, while maintaining other externalities and factors. But I agree that appreciation defers depending on location and so is cashflow of individuals.

The best thing for others reading our discussion is to do your homework properly before you make a decision. But personally, the funny thing is the best decisions are often made in a moment of madness lol. There's a research on Zaltman's ZMET suggesting that when one make a decision of a lifetime, the reasons leading to that moment normally are quite irrational. Don't quote me for that but that's what happened during critical moments of our lives which is why many of us do not react well during those moments. 80% of us will play safe and stay where they are while 20% make decisions which they are not sure are right or wrong. I think this reflects property investment.

Nobody can say who is right or wrong. We can only try to make a 'less wrong' decision at the end of the day due to uncertainties and volatility. At the end, I can say my decision was 'less wrong' for myself, but not others.

It is called emotional buying, 90% of people buy because of emotion not logic, that what I learn during my days as a sales. Well, is that was your strategy, i respect it. I believe everyone has different investment strategy, mine is demand vs supply and your was property price only has one way to go - up.

May both of us also make a fortune out of our investments

Btw, the elements has launched 2nd block already last week.
I believe the sales did not move much after mcity launched.

A bit on emotion, a bit on judgement - no strategy really just based on my buying readiness state and some research + some risk management.

But also got secret weapon

i have one unit want to let go. 850SF facing KLCC with balcony. This unit is sold off from the market. PM me if you interested.

how come you can sell during construction? normally I tought you are not allowed during construction? any gimmicks?

of course cannot sell during construction. we can see m city started construction and quite a lot of lorries in & out but why elements look like abandon project because i visited the area last week. a bit scare to invest for this condo...

You mean you visited the site ? Are you allow to go in ?

I went there last month, saw lots of lorris in and out from the site, but I just wasnt sure are they for The Element constructions or the factory nearby.

The sales for Block 2 seems not very well too. Less than half 'booked".

Any units left? What's the pricing?

yeap, i visited the element site the day before. we saw a lot of lorries over there are for m-city. of course, i cannot go in their site, but i used my mobile to take some photos. let's share with yours...what i can see only one lorry and one or 2 workers only. both m-city & element will be completed after 3 years, but why element's progress is so slow...will it become abandon project????? a lot of units left especially tower B. but their showrooms are very attractive....

This post has been edited by Moi Moi: Nov 24 2011, 02:09 PM

Can you share the pic ? Can we check with the sales office for the update of the construction progress ? Thanks for your update.

Dont scare me, abandon project ? Heart attack later... hehe.

yup, the showroom very impressive...

abandon project will be harsh words....delay maybe more appropriate...

Mayland project mana tak ada delay?

Yea yea... delay will be more appropriate term in this case. Means instead of 2014, might have to wait til 2015 then, if lucky.

Since it is a DIBS, will that affect us if delay in VP ?

No doubt the price is attractive, but I just paid a visit today, compare the Mcity which is next to The Element, their work is aggressively in progress, compared to Element construction site, they only have one or two lorry making the show.

Element launch since six month ago , what have they done so far ?

This is really worries me ...

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Added on November 25, 2011, 7:07 amfroglai88,


DIBS is only valid for 2 or 3 yrs. Exceed this period, you have the bare the interest by your self, you can a LD ( late delivery ) letter but subject to their agreement after the VP.

Cheer


This post has been edited by feihong6670: Nov 25 2011, 07:07 AM

Do they have to compensate us if late delivery ? In fact late delivery isnt worry me tat much, just worry about the quality..

Feihong kor, you also vested there ?

I was there last mth, blk A mayb around 70% ( lots of studio unit available), blk B mayb ard 40%. Too many new developments on this street at the same time.