Aku bukan part of the mass

Well my condo is only yielding <3% at current price (purchase price different lah) ... also 5 years rental only got 1 time increase 10%...

true for high end eg. a 850k house rental RM2000 ,tenant also diff to find, is <3%.

low end better,RM100k low cost, rental RM450 -500, any time people take.

Can find 100k condo/apartment now meh?

Even low cost flat more than that already..

Find those near to public transportation and amenities...those near malls are overpriced

Ada boss.

Example:
http://www.propertyguru.com.my/property-li...Cnormal%7C3%7C2

http://www.propertyguru.com.my/property-li...normal%7C10%7C2

Plenty more out there.

Leveraged REIT for dividend income

This is an idea for discussion only, and it involves LOANS and possible MARGIN calls, please do not attempt this. Otherwise..

Lets say you have 100K capital... and want to have good income from REITs (Keep it simple 6% after tax)

Method 1
100K buy Reit counter
REIT income = 100,000 x 6% = 6,000 p.a.

Method 2
100K put into pledged FD, to obtain 300K margin facility
FD income = 100,000 x 3.5% = 3,500 p.a.
REIT income = 300,000 x 6% = 18,000 p.a.
Interest expense = 300,000 x 4.75% = -14,250 p.a.
Net Income = 3,500 + 18,000 - 14,250 = 7,250 p.a.

Method 3
100K REIT pledged to obtain 200K margin facility
REIT Income = 300,000 x 6% = 18,000 p.a.
Interest Expense = 200,000 x 4.75%% = 9,500 p.a.
Net Income = 18,000 - 9,500 = 8,500 p.a.

Of course you need to have some buffer to protect against margin call and get ready at least 1st year interest (to pay first before divvy).

Discuss!

Does not look safe..

Depends on the individual preference and circumstances...
I still know a number of friends (chinese) who still stay at this type of places. They are doing ok.
Only issue is finding for parking sometimes and risk of your car getting damaged.

Rental yield can be quite decent.

For me, I won't bother thinking of the hassle, complexity and risk of doing this sort of arrangement.
Not worth my time, sweat and tears.

Only those with a few million extra cash to burn can afford to do this.
There are too many black swan events happening every year, why risk so much just to gain peanuts.

PS: I'm referring to Method 2 and 3.
Method 1 with sufficient MOS may reward u well enuf beyond that 6% return.

This post has been edited by TC-Titan: Mar 17 2016, 10:32 AM

Racun...racun

For looking a place to buy, safety is No 1 priority.. Malaysia now too many robbers already..

The leveraged investment is just a discussion only.. some will want to take risk and some wont. Nothing wrong with that.

But Malaysia interest rate is still too high.. SG offering 3.5% interest and the REIT is mostly > 7%...

This post has been edited by gark: Mar 17 2016, 10:32 AM

Give your thoughts lar.. hehe.

I think method 2 is the most 'safe' .. cause with pledged FD, you will not likely kena margin call.. unless your FD becomes negative..

Other risk include capital loss from REIT price down and divvy < interest if REIT rental not doing well.. but if the reverse happens..

This post has been edited by gark: Mar 17 2016, 10:35 AM

But I got little FD

Stocks >>> FD

sell stocks.. pledge FD... buy MORE stocks.. win..

Saw this website with simple illustrations on share margin financing.

https://loanstreet.com.my/learning-centre/s...ing-in-malaysia

The margin call still happen as long as the share based amount shrinks and hits the margin call threshold.


I was thinking alternatively, to use safe but strong blue chip counters (e.g Nestle), defensive stocks and perhaps some selective Reits to pledge and/or to use for investments to maximise on the leverage.
Tendency for this type of counters to go down should be limited to some extend and should either remain status quo or rise up even higher, hence allowing more funds for u to invest with lower risk of a margin call.

KYY mentioned previously he had a few margin calls recently when most of his export counters dip. So I think having a balance portfolio for the pledge and investments is critical.

cash rich after taking profit on BPPLAS and PMETAL...ada apa boleh beli?

Hmm dunno wor.. long time no buy MY stocks already de...

Normal lah.. higher risk vs higher gain... some REIT are quite resilient .. example MV..

Patutlah tak show up in forum

I thought abang gark had adviced you to pledge FD so you can get more $$ to invest MOORE..