Greetings folks,

First of, I am a real estate negotiator working on The Ruma. Secondly, I want to clarify that the opinions below are my 2 cents and is not inclined to favor sales.

Previously I read quite a few articles online talking about scams by developers using GRR schemes. I believed so much in the articles and from then on, I started to get skeptical about GRR marketing schemes like AMINT did.

One fine day during my leisure time, I tried to break down and analyze GRR schemes offered developers and found most of the project being student accommodation, service apartments and hotel suites. I found that not all GRR investment is bad, in fact some landlords made positive cash flow without having to worry about vacancy, paying agents incentive, price war with other landlords, and maintenance of the asset.

Today I would like to share with you what are the things that you need to consider when you are about to money-down on GRR schemes property for investment.

1) Beware of the company that signs GRR contract with you. Read the contract thoroughly. If possible, check the paid up capital of the company, so in case the developer breaches the GRR contract, you could use law to get compensation. (given that the contract you signed has no extraordinary exit clause that benefits the developer only, so READ CAREFULLY again)

2) Know which company is in charge for the management of operations & maintenance. If it is managed by renowned companies E.g Henry Butcher, Frasers, Starwood and etc, you can be assured your asset is in good hands. This will uphold the market value of your property even if it's a lil aged.

3) Know the market rate of the properties around the GRR investment you are considering. Make sure the developer does not over promise on the rental returns, if not after the GRR contract ends you might have a big slash in your rental yield. Undeniable, there are some extra cost factored in your buying price. This is business after all. So make sure the extra cost isn't asking too much to justify its future value.

4) Know what target market the management team is looking at. Students? Expats? Tourist? Students accommodation I personally don't favor. First, in order to generate higher yield, the management might be renting to foreign students that has the infamous image that they almost destroy anything. I'm not trying to be racist here but it's some general perspective on how the public look at them.

5) Figure out what is your target market like after the leaseback period. Who are you going to rent to after the contract ends? What is the expected demand in the area after few years down the road? Is there any future developments in the future that you could possible seek tenants from there? (e.g. corporate towers, shopping malls) Take for example; Cova Villa in Kota Damansara. Their contract with SEGI College has just ended and the place has a slash in rental and now many landlords are desperately looking for tenants.

6) Know what are the future plans of the management after contract ends. Are they interested in renewing the contract? Are they interested in buying back the property?

That's all I could think of now. Hope it could help someone who needed some advice.

On a side note, I'm selling The Ruma There's plenty of explanation that I could not possibly put up here.
Also, I have done my own research. Facts and figures all ready to support your understanding and I personally look highly upon this development. Fyi, The Ruma Hotel Suites is the first 5-star Hotel to be sold publicly in KL City. Interested to find out more, with unbiased opinions, do call me @ 012-3757 057.


Rgds,
Kayden L.

This post has been edited by windstruckk: Jul 9 2013, 03:29 PM

Being in the same development with a 5-star hotel, the luxury image of the residences will be upheld at all times.

Compared to Face @ Platinum Suites located next to Renaissance Hotel which is selling from 1,657psf, Ruma doesn't seem too expensive to pay for its location and class. It is still in the Tier 1 territory of KLCC.