QUOTE(kidmad @ Aug 16 2013, 11:28 PM)
for someone who had already bought my 3rd recently. Im pretty aware of where i'm putting my money in. perhaps your finding excuses to justify your points? You are talking about a investment which doesn't make any appreciation please do not compare with FD or anything. If you are doing a deposit why are you comparing with a investment?
Next again you are wrong.. taxes and fees like? please dont just say tax and fees dont assume. renovation cost have you calculated how much you need for a decent one? Let me tell you it's approx rm9.5k which i've included as part of my initial payment. agent comission? hello it's part of the 10% what talk you? SPA legal feels loan legal fees do you know how many percent you need there? Let me give you the exact amount for a 250k home purchase. cause i still save my formulas.
Prop 250k
DP - 25k
SNP - 6.7k - 2.5k rebate if it's your 1st home
LOA - rm7.5 inclusive of mrta
repayment for 35 years? RM1071
rm9.5k to have 3 airconds - 2 water heather - washing machine, fridge and that's all you need.
the rest all for KC.
As for the highlighted part i've done that..
it's no rocket science.. 3 years back there are abunden of rm250k condominium. Google up my property. puri ayu condominium. Check out the price and check out the rental it's always between rm1.4 - rm1.6k. Some ppl are even more greedy wanting rm1.8k. Again i've done that and it's not an assumption. Perhaps you are the one who are making an assumption.
Oh and how often property at such price doesn't appreciate? Oh so now your UUU camp? and again i'm here to stand.. you are not going to lose even if it does not appreciate. If you are selling them in the 1st 5 years then yes but after 5 years selling it? no. Why? I've calculated it in my excel spreadsheet on the breakdown of cost TCO and ROI.
What's wrong comparing property investments with FD or any other investments? Property investment is after all one of many investment classes, unless you are purchasing for own stay. If you do not get an ROI marginally higher than FD rates (2 to 3% higher), the risks you take and hassles involved is unjustifiable.
Why are you comparing puri ayu condominium prices 3 years back? It was RM250k 3 years back (as you said), but it is going for RM350k now (that's a whopping 40% appreciation). If you purchase it right now for DP 10%, the monthly installment is RM1540 (excluding maintenance) over 30 years at 4.2% interest rate. Market asking rental rate is RM1.4k-ish.
Let's do some maths here:
Based on your worst-case scenario assumption of no appreciation after 5 years and if you were to dispose the property right after 5 years (no RPGT tax, no appreciation anyway
). Using the mortgage calculator from here
http://mortgage-x.com/calculators/amortization.htm (30 years loan and 4.2% interest rate) ,
Pmt # Date Loan Balance Interest Principal Total Interest60 August 1, 2018 285,819.84 1,002.25 538.15
63,244.09 You would have paid RM63k to serve the interest alone. That would be your interest charges, excluding other fees. Loan balance is RM285k, which means you paid about RM30k principal.
The agent commission I am referring to is the 1 month rental commission to your agent (granted no change of tenant within the 5 years and full 5 years occupancy,
"OMG, it's a perfect world out there!") and also the 2-3% paid as agent commission when you sell the property.
Now, back to your assumption of RM1.5k per month rental income for 60 months (5 years) which equals to RM90k (again, ideally).
After deducting interest, S&P (multiply by two, for purchasing and selling), stamp duty, loan agreement, renovation, maintenance, commissions (calculating based on RM350k), you'll be in negative territory or very close to it. Let's not forget what you could have done with the 10% DP (RM35k) you paid. You could have left it in FD for a steady 3.5% interest (RM35k becomes RM41k+ based on compounded interest) or invested it in stocks, unit trust, bonds, etc for higher yield.
Conclusion, if your property doesn't appreciate after 5 years, it's a very bad investment, even with full 5 years rental tenure.
P.S: if it still does not appreciate after 10, 15, 20 years, you'll be in deeper sh*t
This post has been edited by loongchai: Aug 17 2013, 01:36 AM 
Aug 16 2013, 04:14 PM
Quote
I am just being realistic. 
It's rm285k only if you continue serving the loan. On the 5th year if you were to sell @ rm250k. Calculate how much balance you will be getting from the bank la. Perhaps that's the reason why you still don't get the point where i said you will not lose money in the end. 
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