How much can you really made from Investing a property?
I noticed some property that was purchased for RM 350K , a loan tenure of 30 years , RM 1800 per month to pay the banker + monthly maintenance does not justified the earning made from the monthly rental collected from the tenant which can be a minimum of RM 1200.

Eg. Loan payment = RM 1800 per month
maintenance Fee = Rm 150
Misc = RM 500 ( renovation cost, tax, repair,insurance etc)
Total = RM 2450 per month

rental fee (furnish): RM 1600

RM 2450 - RM 1600 = RM 850

Balance to top up some more is RM 850 .

This post has been edited by hackwire: May 4 2007, 04:14 PM

nobody ask u to rent out at rm1600, unless dat is da area market...then no choice lo, wait for miracle to make ur area boom, then u can rent out for rm5k per month

Looks like the problem you listed is actually the rental belongs to your bank for 30 years. Theoretically speaking, why would you buy a property with the intention of renting if your research tells you you'll incur a negative cash flow? Normally, negative cash flow are cases that you are looking to flip the property.

As adrianocy said, rent it for 2450 if possible. If not, sell it. I am not sure if there's a way to refinance the loan to longer duration, like say 50 years.

Well, the rental rate was pretty much control by the market . New property were normally like that and it takes time . Im not talking about those property that is making money after so many years.

Is there any property that worth looking into that will have a good rental income ?

Yes, a project next to YTL in puchong by Am-El holdings, their recent development was Merc Residence off jln klang lama.

Launch price is expected to be @ 400k, 3 story. Compared to their neighbor YTL, which is selling at 500k minimum. Design is far more modern then YTL's and a specially manufactured brick is used to build the house, its 1" thicker then a normal brick, and its stronger and its hollow, therefore reducing heat absorption, just to mention a few advantages of the property.


If your interested pm me so i can keep you updated on it(launch date; info) phase 1 is limited to friends and family @ a cheaper price. So it will not be launched to public unless u know someone from the developer side.

And no, i do not represent Am-El holdings or its subsidiaries, but I know their business development director and am currently working for a good price for its units.

u must know where going to boom
and ur -cashflow is not a good buy
sell the house unless a promising hold is that it will boom in a few yrs time

What about a guaranteed boom within 12 mths of project launch? =)

ps. Unless stock market crash and ecnomy get wiped la


EDIT:info doesnt sound really right =/

This post has been edited by bryanyeo87: May 4 2007, 08:06 PM

Well, all these new properties were really gearing for new materials and sophisticated design but i have a feeling that they don't have the Contingency plan or Future Plan to maintain this Succesful project.

I had personally seen some condos are running out of Cash Flow because a lot of owners can't afford to pay the maintenance fees. imagine those who are still paying and those who can't anymore.

usually the maintenance fee is around how much?

Calculated by the size of ur unit.
Normally like 10 cents per sq ft etc.
Different management, area, facility, different rates.

---

Added on May 5, 2007, 1:17 amSome condos management are smart.
B4 they hand u the keys, they request you to pay 24 months maintenance in advance.
That, to some extent, ensures that the condo would be well maintained for the 1st 2 years.

---

Added on May 5, 2007, 1:21 amThe correct way to calculate is whether the rental is enough to cover the monthly bank interest incurred (not the monthly instalment).

If the answer's "no", this is a bad investment, the property should be sold (assuming no expected boom within the area) to cut lost.

This post has been edited by scorgio: May 5 2007, 01:21 AM

Usually people chase the market that is popular or hot .... very seldom buy from unknown or far off places, unless got insider information.

Or easiest, just follow the big developers... wherever they build (especially not hot areas), buy buy. Can see examples from YTL, SHC, Sunrise, etc..

---

Added on May 7, 2007, 11:18 pmOh, and also now, the govt removed the capital gain tax, lagi better for the market. Lots of buy sell, especially the corporate properties

This post has been edited by murphyslaw: May 7 2007, 11:18 PM

tht's obviously a very bad investment in realestate....

property gain are derived from 2 income. 1 rental 2 capital appreciation. If only count the rental, most of the property in msia are not worth for investment.

Property investment is good but sometimes it is difficult to get GOOD people to rent the property.

Yup, I agree. A friend of mine who rent out to an expatriate, lost all his furniture in his furnished condo. Sad case.

make sure u get all important document from the tenant so tht he /she won't act naughty, best way still, deposit plus passport/ic copy

This is not a simple case of runaway tenant.
This is actually an organized crime.

that's why it's best to find out where your tenant is working. If he's unemployed or working as a low profession jobs, then you have to be careful.
That's why even if you can rent out low cost apartments, you have to be aware these people are highly likely the type that's not going to pay rent on time or not pay at all and keep on delaying it.

hi,

there're positive cashflow/profit rental properties around.. the only catch is, there's alot of research/homework that you need to do to find them..

that was why someone made a quote saying "profit is made when you buy.. not when you sell".
it simply means.. you don't commit to a business purchase when your due diligence telling you that you're making a monthly loss..

that monthly loss is real.. capital gain can sometime be a false rainbow trail.. (that's how some flippers ended up in a mess.. look at the USA)

it's actually a compulsory these days.. if you know how to protect yourself as a landlord.. even for deposit, there're a few types..

i take 2months rental deposit , bills deposit n IC photocopies from my tenants, but they are good student tenants , so there is nothing much to worry about rental payment every month, they even considered my offer to pay lump sum for 1 yr tenancy with discount given, too bad they didn't come to a full agreement...

students do come and go.. and the cycle can be as short as per-semester basis. thus, there's a lot of work involve in keeping the property occupied.

if you work closely with the school/college, it would be much easier on your part, right?

a 1-year advance rental can be quite alot.. have you considered per-semester rental?

1yr advanced would be easier coz i can make back the discounted rental from investment with the advanced , per-semester the amount not much n the discount oso not so much difference from monthly rental which i hav oready given discount for early payment by 10th.

tenancy should be a problem coz the unit is new & big built up, close to college & uni , more importantly, they are my juniors who will pass on the tenancy to their juniors after 3yrs....touch wood...

looks like you've got a good setup there..
did you create additional partition to your unit to accomodate more rooms?

IMO, there is 2 way how one can make $$$$$ from property investment.

1. Rental income - The slow and steady way, and good way to make some passive income. If one can have 5 fully paid property for rental income at his/her retirement, most likely you'll have a good retirement income without the need to depend solely on kids or EPF funds. Boring and slow, but a sure way to build one's wealth and REAL assets.

2. Flippers - Higher risk and much faster method, where one usually speculate and buy developers unit and then sell it off for decent gains upon completion. Decent properties in KV tends to appreciate on average of 20% from its developers price. Of course when you speculate, there a higher chance that u migh get burn if the deal went wrong. Below are real examples for flipped properties in a simplified version :



Property name : Parkview tower @ KLCC by Mayland
Developer's price : from RM180k
Current asking price : from RM330k


ROI

Tenure of investment : Bought in early 2004 duering developers launch and sells it off early 2007, few months after CF issuance, 3 years

COST
Downpayment@10% : 20k
Interest paid in 3 years : 10k(approximately)
Other misc cost (lock-in, legal etc) : 10k
Total cost : 40k

PROFIT
Sell off for 310k early 2007 : 310k- 180k(purchase price)
Gross profit : 130k


Nett profit after 3 years : 90k
ROI per anum : 108.33%



Cool huh?

Man I wish I was born earlier and bought one back in 2004. Just started working back then hence no $$$$$

if i made up my mind to pay (loan ? ) 20K extra to get another unit tht has a space between the rooms (developer decorated as TV hall separated from living room) ,which can be easily put up only 1 partition wall to make it a room....but tht time it wasn't in my budget...

anyway,there is a limit for access card for each unit, my current unit oready hit max 10cards , so don't think making any partition in any apartment can accomodate more students....