Bro, with that kind of return, I will sapu all 3

Where got such return in KV anymore ? Looks like I got to visit outside of KV ASAP

I haven't increased one of my tenant's rental since 5 years ago. Although someone offered to rent the shop for 20% more. All because he is very prompt, and never never kacau/complain even 1 time unlike my other tenants. I will rather keep good tenant than having headache over 20% more rental. To me, it is not worth it.

Just a small fry compare to the many taiko here

Haha those Genneva days. Really missed those people who believe in the Ponzi scheme. Pat Lu, Anoy_me, etc

Yes, it helps a bit. But my experience is PD cheque or no PD cheque, if the tenant can pay promptly, they will pay. If the tenant has cashflow problem, then on the 30th, they will ask you to postpone banking in the cheque. So, the problem will still be there even with PD cheque.

For those Pak Hitam, I even collect 1 year rent in advance and charge them 30% higher than market. So, rental can actually differ greatly on the same property. But you will suffer as these tenants will bring a lot of trouble to you and your property. So, call me racist, but I am not renting to them in the future after 1 bad experience

I even have 1 tenant who pays promptly every month, but complain a lot on maintenance. Air cond not cold, toilet leaking, door lock spoilt, fridge spoilt, toilet stuck etc etc. Every month also got complaint. Until I fed up and offer her RM300 pm and ask her to take care of the maintenance for me

Suddenly we all talk about rental issues

Haha I think he is being sarcastic Compare to Singapore who only take in filthy rich migrants

You spoke so strongly against buying properties now and suggest better wait for the price to come down. But you actually went against your own words

I hope other down down down camp here meant what they say and put their money where their mouth is. How to believe what the down camp say in the future ? Somemore dare to tell us....

Bugger....behind the back, they grab properties.... No wonder the price is still strong

Better call my agents again tomorrow and BBB

Twisting and turning.....you are good politician material, like Samy Vellu

Anyway, I don't think serious investors will take the comments in LYN (of all places.... ) seriously lah.

So bro its alright if you went against your words. Many of the BBB camp are agents anyway so you don't take their comments seriously too....

Hahahaha I suddenly feel very funny. For all you know, people like debtismoney, joeblow etc are buying properties behind our back trying to catch the last train. And people like zuiko, amint etc are also selling their properties in fear of the bubble burst

Samy Vellu, you are actually assuming too much too. I am not BBB nor bubble people. But I am HHH (hold hold hold) people, ie don't buy and don't sell people

He just make me feel black could be white, and white could be black

+1

The feeling is like arguing with someone who strongly condemn gay, but later confess he has turned gay himself, and still argue with you "i never say i will not turn gay...."

This post has been edited by EddyLB: Mar 24 2013, 11:57 AM

I think you are thinking all household debt are related to property debt, correct ? If you are referring to household debt, the usual bank guideline will be between 40%-60% of net income. Ie. If RM10k pm / RM120k pa net income, you can probably afford a property about RM1 mil. So the debt/income should be 8-10 times. What is 1.4 times ? Just chicken feet ratio Especially like you said, value of properties is going up in long term.

Unfortunately household debt is not property debt only. It includes car debt, credit card debt, personal loan (don't know if education loan included or not, but I think is is part of the household debt).

In the reporting http://www.themalaysianinsider.com/malaysi...hold-debt-rises, the 4th last paragraph says "The bulk of the growth was contributed by the non-bank financial institution segment (NBFI) such as Bank Rakyat Sdn Bhd and Malaysia Building Society Bhd (MBSB), as concern grows over their lending to the lower-income segments." I think this is attributed to the personal loan to mainly government servant. If you are a government servant with RM4000 monthly salary, the bank will approve you RM200,000 of personal loan.

These personal loan (and car and credit card loan) may be "non-productive loans", meaning it is consumption based instead of investment based (like property loan). So 140% is alarming if we compare to other countries. If the economy slows down, people start to lose their jobs, or interest rate increases, then we will feel the effect of servicing the debt. Suddenly, we need to use additional 20% of our income just to pay the installment.

I agree to your calculation.

As to whether the ratio is high or not, let's compare to other countries. You can see the chart in the last page. Malaysia household debt / disposal income ratio is very high

Also depends on what type of debt. If you earn RM60k pa, and you have a housing loan of RM84k, I think it is low.

But if you earn RM60k pa, and you have a credit card loan of RM84k, I think it is high

I agree, and I disagree I use some numbers so that it is easier to understand

1. If a person with nett income of RM10k pm, and assuming the bank's approved debt to income ratio of 50%, then he can borrow loan(s) with installment up to RM5k pm. That translates to loan(s) of roughly RM1 mil.

2. We have a misconception that flippers/speculators can buy unlimited number of properties, which causes the market to expand into a bubble. But if flippers need to leverage, then he can buy only up to RM1m worth of properties

3. Banks approve loans based on the nett income you are already earning, not future income from expected rental / capital gain on flipping etc


Scenario 1
In 2014-16, flipper/speculator's units VPed. They manage to rent out / sell. Then, all is well for them (not so well for the DDD)

Scenario 2
In 2014-16, flipper/speculator's units VPed. They can't rent out / sell. But he still can afford to service the installment. Because banks approve the loans based on his affordability. This is what many termed it as "holding power"


IMHO, the determinant of market will crash or not does not depend on the number of projects going to VPed in 2014-16 (or any period). The banks need to vet through the loan applications and make sure the buyer can afford. Especially BNM's rule tightening measures of using nett income and 70% LTV rules

This holds true PROVIDED if the country/world economic condition remain unchanged (ie. job still intact, rental market healthy, or interest rate unchanged etc ). In other words, the buyer's "holding power" is not affected. In the event that Malaysia faces recession (lose jobs, hard to rent out, interest rate increase etc), then the scenario becomes totally different. Just imagine a 2% interest rate increase on a RM1 mil loan will be translated to an increase of RM1k installment pm. For those who borrow to the max, that is strenuous to the cashflow. And eventually start off the "bursting of bubble"

If you want to look at auctions, then it may be more meaningful to look at Non Performing Loan. Overall, BNM reported NPL is just 1.5%. And that is for total household debt. Most NPL is car and credit card loans. Not property loan.

http://www.kinibiz.com/story/corporate/101...ebt-levels.html


% sometimes is misleading. If you have 1000 auction is 2011, and 1200 auctions in 2012, that is 20% increase. Looks alarming ?

But if the total property is 1,000,000, the 1200 case is just 0.12%

Just curious, can give an example or two how to circumvent the banks rules so I can borrow more ? Take the example my nett income is RM10k pm, and I have already servicing RM5k installment now ? How to borrow more loans ?

You are also assuming they have other expenses

Anyway, if the time come, the flippers will cut down on "other expenses" rather than going into bankruptcy

The lawyer from the down camp also switch side and buy RM600+ psf pigeon hole, the market how to stop going up ?

Not whether they can or not. They have to. Else, its bankruptcy. End of the road to financial freedom

Kid's education, food and other necessity is in the other 50% of income lah. In my example above, bank debt to income ratio is 50%. So the living expenses is included in the RM5k. RM5k is more than enough for a decent life style in Malaysia. Can have some savings too

You sound like the banks are lending them 100% of their income. Leaving them with no margin of error.