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 FI/RE - Financial Independence / Retire Early, Share your experience

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SUSBillCollector
post Jul 23 2019, 10:58 PM

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Retiring early isn't something I'm striving for as I always believe the idea of retiring early are for those that generally don't enjoy what they do for a living or simply do it just for the paycheck.

I do seek for financial freedom and independence though. It has been something I've looked at and planned for a long time. Past history made me realize without money and financial independence any dream you have can evaporate in front of your eyes.

This was further reinforced when I was about to get married. My financial freedoms meant I had control over what I wanted to do and I did not need to dance to the tune of my now out-laws. I also realized with financial freedom I could follow any decisions based upon conscience and convictions I did not need to do something I did not want because my paycheck depended upon it.

How I seek financial independence? Quite simple, I buy assets that generate passive income.

I am not that big into trusting other people with my money as I've had too many bad experiences and for the most part I feel passive income for financial independence should come from sources that are very secure and safe.

My asset of choice is real estate, I used to buy stocks and bonds but now not any longer as you have to have too much faith in the system and quite easy to lose it all. The other aspect to it is unlike real estate you do fundamentally own something and nothing beats the security of it.

I have 2 types of real estate investments. The first kind is what most people do, but on the bargain and rent it out. I only buy certain types of real estates in Malaysia, namely landed, freehold and in mature or maturing areas. I usually buy something off auctions or I look for houses in need of TLC to buy on the cheap. Fix it and rent it out. Most of my properties are rented by American expatriates.

The other kind of real estate investment I do is I have a partnership with 3 other persons, a lawyer, a contractor and a real estate agent. We look for landed houses that are run down, derelict or ugly. Renovate it and sell it. Each of us contribute 25% of the cost and when it is sold the profit is shared out in the same way too. Our aim is to find a basic unit house that is worth RM1,000,000 and try to buy it for RM750,000 then spend around RM250-300,000 on renovations and finally sell it for RMRM1,250,000 or more. We try to do 2-4 of such projects each year and it is what we enjoy doing as a team, do we do it for the money? Our lawyer partner does but it indirectly helps him gain more clients. Our contractor each time we have a project he usually gains 2-5 more projects within the same neighborhood because someone saw the work he was doing and was impressed with it.

Savings is something I practice, I have a very simple way of looking at it. Primary job income when I get my salary, 10% goes for tithes, 20% gets saved in a separate account, the rest is what I live off and spend. Profits or returns from investments I tithe 15% of it and save 35% and every 4 months I keep 3 months expenses and the rest I put it in FDs till I collect enough for my next real estate purchase.

Here are the reasons for my quests for financial independence and freedom? The answer to this would go back to the past.
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I must say lessons in life I've always found are you are the master of your own destiny and if someone has to rely on you make sure you don't disappoint them however never put yourself in a situation that you must rely on someone.

Regrets in life? I have none.

Would I be retiring anytime soon? Nah.


QUOTE(Garysydney @ Jan 24 2019, 11:42 AM)
You probably want to aim for a higher passive income before you stop working - the last thing you want to happen after you have stopped working (esp if you are over 50) is having to start working again due to you getting your financial plans wrong.
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Just letting you know that I was following this topic and loved the contributions you have made. But oh dear you did mention some too familiar names. Small world but best to let bygones be bygones.
SUSBillCollector
post Jul 25 2019, 08:55 PM

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QUOTE(Garysydney @ Jul 25 2019, 08:52 AM)
I have revealed too much of my personal life so i am keeping a much lower profile now in LYN -someone may read this in future and know me esp when i go back to retire. Not very nice people know so much about your background esp there are things that you do not wish to disclose.
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Don't worry about it.

Are you looking forward to retirement? Do you have any activities you plan on doing once you have retired?

I read that you were planning to come to Kuala Lumpur for retirement, what would you be doing with your time here?

QUOTE(cynthusc @ Jul 25 2019, 01:11 PM)
Loving all the stories here. I am FI but not planning to RE. I am probably semi retired now. I go to the office around 11 and work about 2-3 hours. I stay in the office until 4 or 5 but just surf the net, read story books and sometimes watch some movies. I don't work on Sat or Sun.  There are times when I have to work harder...maybe pull an all nighter but it is pretty rare...maybe once every 2 to 3 months.

I am 43 and a single mom. My daughter is 17 and just entered college on a scholarship.
When I was 19 I left home to enter a local university. Although I was offered several overseas scholarships I could not take the offer as my parents were not willing to subsidise my living expenses in UK although they could afford it.  I could have worked and studied at the same time but during that time at the age of 19 I was scared to go to UK alone and was really clueless. HAHAHA.

So anyway I left home and stayed in a hostel  that was crowded and more like a elevated version of a prison cell. 8 to a room. During my four years of studies I did well and the university sent me overseas for competitions. As it was a local university and I was not a bumi, I was not qualified for JPA or MARA scholarship and many of the private company scholarships at that time had a 2 year bond attached to the award. So I just hustled and got paid to do assignments for my uni mates. Paid my own way through university.

When I left university I got a high paying job immediately but being young and stupid I fell in love and got married at 25. By 26 I had my daughter and 10 months later I was divorced. At the time of my divorce my ex left me with no money and a car debt as he bought a car in my name.

Since I was 26 and had a young mouth to feed, I guess survival instincts kicked in. I then started working in 3 different companies before I left and started my own business 12 years ago.  I started my business because I wanted more time with my daughter and I wanted flexibility as I had no help from my family or my ex. I was totally on my own.

Currently my business has 5 full time employees  and two part timers and my income has doubled from last year. My income is approximately 600K per year after expenses. My passive income is about RM20K per month and will probably increase  because I am still earning and saving.

Most of my passive income comes from FD and share dividends. The rest from the rental of 2 properties (only 20%).

I am not a miserly person but I am quite frugal in my daily expenses. I eat at home quite a bit because I find home cooked food healthier and I love cooking.  Recently due to the increase in my earnings, I have loosen the purse strings a little and bought a 200K car. I have also increased my travelling because that is the only thing I like. I usually travel 3-4 times a year but now I travel business class. The car and some of the travelling is paid by my company as an expense.

As my daughter is on scholarship I don't really need to support my daughter that much. She gets a RM500 per month allowance from me and yet she hardly spends it.  She is an amazing person and we have a very close relationship.
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Well done. You have done very well for yourself despite all the setbacks.

Did you find it challenging to be a single parent with no support from the ex?
SUSBillCollector
post Jul 26 2019, 02:30 PM

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QUOTE(cynthusc @ Jul 26 2019, 01:36 AM)
Yes definitely but I got to do what I got to do. Luckily my daughter was a happy baby. I had to train her though...no middle of the night feedings, no soothers except for a blankie and she was off diapers as soon as she could sit. The advantage was no interference from anyone in terms of how I brought her up.
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Some no frills parenting. Always wished my own mother opted to do something similar instead she took the easy way out and found a partner that mistreated the children that wasn't his.

QUOTE(Garysydney @ Jul 26 2019, 04:09 AM)
I am not very familiar with the business scene in KL so will just sit back and learn first.

My wife and i are not considered wealthy so we will have to be careful with our expenses because we will be relying on our passive income to survive. At my age (57), you probably want to adopt a more conservative lifestyle (in terms of taking risks on investments) as we will not have a second chance to do things again if we get things wrong.
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Best to take a conservative attitude in retirement as well as not try to venture too far out from what you know best and not pile on the stress. Health is wealth as they say.

I take it you are no longer a Malaysian citizen since you have spent so many years Down Under?



QUOTE(Garysydney @ Jul 26 2019, 05:10 AM)
Aust has gone into a period of low interest rates (and for many years to come) and a lot of investors have no option but to resort to higher risk entities (mainly equities like shares). The Aussie dollar will remain fairly weak which is why my super is all in International shares (which has done very well because the Aussie has been weak and Dow Jones has been very strong) - i am a little scared now and wonder whether i should reduce my International shares exposure!! My personal portfolio also contain all foreign exposure (i like Magellan products so i have been only buying MFG, MGE and MGG on the ASX).

Lifestyle costs for me is very important esp when you are only relying on passive income to live on. If we can lower our lifestyle costs, we can achieve Financial Independence at a much earlier age. Also, once you are used to an expensive lifestyle, it is very difficult to go back to a cheaper lifestyle. So the most important lesson in life is being frugal and thrifty - once you can achieve this, your FIRE aspirations will appear a lot sooner.

We learn a lot more about life as we age but the most important lessons can only be learnt through the hardships we encounter. I have gone through a lot of hardships in life and it has changed me a lot but i am happy that my hardships are mostly over now. There is a saying - What does not break me makes me stronger.
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Do you believe the low interest rates will be there for 5-10 year period or appears to be longer than that?

Considering some further investments in Australia or should I say mainland Australia as real estate prices has started to slip. I invested some years back in Tasmanian real estate and businesses as was planning for a PR, in the end invested as there were good deals but abandoned plans for PR in Australia.

Have to agree it is the hardships in life that teaches us far more than the cushy times in our life. I guess that is partly the reason when it comes to real estate I always tend to look for the absolute worst dumps in the best of locations.

Myself, currently lifestyle cost is a bit difficult to contain. I have a partner that doesn't work admittedly because I told her to give up her career 3 years ago. Children have 1 on the way, a step daughter that is now 4 and 2 aged 6 and 10 that am trying to fight their mother for custody. Their education itself is going to cost me a fortune but it is something am willing to fight till the end.



QUOTE(ahwai @ Jul 26 2019, 11:37 AM)
if can still work why retire early? then do what at home?
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Some people if all their life they did a job because of their paycheck and had to put up with their bosses whims and fancies after 20-30 years they simply want to get out of it.

Doing nothing will be something they enjoy a lot.

QUOTE(Showtime747 @ Jul 26 2019, 11:47 AM)
Somebody will enjoy by just doing nothing

Others cannot tahan not working and being unproductive. But when FI, you can pick and choose what you want to do, be it doing freelance, low level stress-free jobs, charity, hobby/sports you don't have time for previously, take care of parents/children/grand children, spend more time with friends/relatives....

So, it is very important to understand what is a person's true personality before decide to retire. What do you want to do is a very important part of retirement, beside financials
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Yes once you have FI/FF perspectives tend to change.
SUSBillCollector
post Jul 27 2019, 03:31 AM

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QUOTE(Garysydney @ Jul 26 2019, 03:21 PM)
I am still a PR - i came over on a student visa in 1981 (Sydney Uni-BSc).

You would have done well if you had invested in Tasmania - it is currently the best performing state in Aust for properties.

Wow! Your kids are still so young - got a long way to go. icon_rolleyes.gif
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Children are indeed young. Started later in life but always felt I could not afford them anytime before that.

I invested in Hobart in 2006, bought 2 houses and bought shares in a salmon factory. Was supposed to take over the management of the factory but in the end decided Australia and more specifically Hobart wasn't for me. Did a shares for assets swap which saw me taking over the 2 pieces of land and several buildings that was owned by the company.

Are PRs eligible for the state pension or the super fund is it? Never planned on being an Aussie citizen?

I haven't quite decided if I would continue being a citizen of Malaysia. Ultimately it would depend on whether my future wife would like to continue living here or return to America but currently no signs of her wanting to return as life is pretty good for her.



QUOTE(cynthusc @ Jul 26 2019, 03:32 PM)
Did your mom have a tertiary education? If not it would be nigh impossible for her to do something similar unless she is an outlier. My mom who is now 78 has this cross to bear. She chose to support my dad who was abusive to all his kids and now we, my siblings and I are not close to her.
For those who RE what is your daily schedule like? How do you guys keep sharp mentally?
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She was a qualified accountant. I doubt it was an impossibility for her to raise us on her own. My sister refuses to talk to the mother as well for the simple reason that she felt all through her life she was never the favorite one and the mother always favored the children she had with her 2nd husband.

QUOTE(meonkutu11 @ Jul 26 2019, 10:39 PM)
I like to ask your planning on kids education fund, especially those who already choose to RE but kids still in secondary schools for example.

Do you keep the fund in term of cash, ASNB,TH, FD, shares and/or property?

Cheers
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I have long since decided that I will send my children to America for their tertiary education because I graduated from a university in Texas and ultimately it was that experience that opened up the opportunities I had in life. I won't make them go to the same university but hope one of them follows my foot steps.

As for how I intend to fund them, I bought real estate for that purpose. Basically I bought several old buildings in Seattle and Bay Area. Remodelled and sub-divided them into smaller apartments, then I rent it out. When it is their time for college am hoping I could support them purely on the rental alone but looking at how much tuition fees cost these days and how much it is going up by every year I may have to remortgage and find more money for their living expenses.

QUOTE(Hansel @ Jul 26 2019, 09:45 PM)
biggrin.gif

Based on the reports I am seeing after the RCI, and with APRA clamping down on the banks and the FIs, loans are not so easy to come by. Melbourne and Sydney seems to be the hardest hit. So, Tasmania is still doing well ?? Specifically Hobart ? Launceston ?
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Only Hobart is doing well, mainly as a result of restrictive planning laws.
SUSBillCollector
post Jul 28 2019, 01:03 AM

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QUOTE(Garysydney @ Jul 27 2019, 06:00 AM)
If you had bought in 2006 in Hobart, you would have done very well. Real estate in Hobart would have gone up at least double or possibly triple since 2006.

PR privileges is the same as a citizen except you cannot vote in all elections or work as a federal public servant (state public servants and local councils are usually okay but every state law is different).
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I myself am mostly undecided whether or not I would someday give up being a Malaysian citizen. Myself to get British citizenship would be a fairly straightforward process and viewed it as my "exit plan" if ever things went south here. Something I have to be mindful off due to the nature of politics here.

None of the Hobart properties tripled in value. Not that it matters as I have no plans to sell.
The 1st is a house in Sandy Bay, was brand new when I bought it. Now after years of being lived in by PRC nationals it has mostly become a thrashed dump. Every month I get an email asking if I'm interested to sell and the last offer was 280% from the purchase price. The rental however is another story, when it was new it rented for AU$220 per week with no furniture. Now it rents for AU$780 per week and lived in by 8 PRC nationals. Next month will be its last mortgage.

The 2nd one was a place I initially bought to set up an office as I was captivated by the view. It was a run down colonial era building. I had it stripped to its bare frame and had it restored. After it was completed I decided Tas just wasn't for me and put it up for rent. It has gone up 180% taking into account all the money I had put into it and yes it went over budget by double. Rented it to a barrister who uses the entire upper floor as her office and lives at the lower floor. First started out at AU$250 per week now it is at AU$480 which I suppose isn't too bad. Thankfully unlike the PRCs this cute lil bogan does take care of the place with an element of pride but rent sometimes late and often not paid in full. Oh well at least she does tell me that she is enjoying the view of Mt Wellington and the River Dervent on my behalf.

The lands and buildings, I have no idea what is its worth as no one has ever approached or showed any interest in buying it. In any case as part of the settlement they have a 20+10 lease on it, doubt anyone would buy it as there isn't any provision for the premiums to go up until the 20 years is up. This one is now free of any encumbrance, I don't lose any sleep over it.

QUOTE(Hansel @ Jul 27 2019, 03:37 PM)
Another way of funding for kids' education is by investing into a country with a currency that has a strong tendency for appreciation. You continue to ride on that currency's strength.

I sent my family out when they were young, so that they could experience what it is like in an international community, and order that they they could mingle. Somehow, I feel that sending them out when they reach pre-U age is a bit too late. But that's just my opinions,...

Of course, sending them out earlier will consume more resources because we will start to spend for their studies and their living expenses t  younger age, compared to against when they reach pre-U age. Whatever spent earlier could then have been saved up for spending in later years.

However, I opted for the first choice.

My decision to invest in foreign countries has been a great help to me towards financing the above responsibility.
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How old were your children when you sent them abroad? I take it you are placing them in boarding schools?

Myself, my eldest was supposed to go to an international school when she started primary but it didn't happen. Thankfully their mother decided to give up custody and I will move her to where she was supposed to be all along. The younger one will start out at an international school. It will be as international an exposure I could reasonably provide them with at this moment in time.

Am a bit sceptical on playing with currencies as I am paid an American salary by an American company in US$ though am no longer based in America. Had enough experiences of things going south hence I stick to what I've tried, tested and succeeded in. Not too keen on equities as I don't do short term investing. Prefer buying wrecks and fixing them up as it indirectly does more for my profile than just deliver returns.




QUOTE(Hansel @ Jul 27 2019, 05:02 PM)
In the overseas, compared to property, I would rather invest in equities and exchange-related instruments which I could liquidate at a moment's notice. The changing dynamics of the legislation also poses a risk to property investors.

But that's just me,...

Generally, it is wise to invest in the same country,... but I have experienced a new thing here. I discovered it is better to invest and earn the SGD, compared to earning the AUD to finance my family in AU. The AUD has weakened against the SGD, and is continuing to do so.

Not only with wealth,... but with wealth that can be accounted for, and that financial insts are willing to accept for savings and investing today. Wealth that your filling-in of the FATCA and CRS Forms can support the authenticity of,... and wealth that, when you're filling-in the forms when opening accts, you can answer all questions favourably-in.

Otherwise, the FI may not accept your acct-opening.
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Yes one of the latest challenges everywhere is all the restrictions coming into force all over the world. Also becoming a challenging affair to open banking accounts abroad and another challenge is to keep it open.

I would love to be Singapore based rather than on my current arrangement and it would halve my tax bill as I have to pay US Federal income taxes. However I could not bring myself to live long term in Singapore.

QUOTE(icemanfx @ Jul 27 2019, 05:19 PM)
Managing cross border property is never easy as trustworthy re agent is hard to come by.

As long as one is not a politician or family of politician, most privilege or private bank subject to regulations will accept account opening.
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When you have overseas property then you will know what to do to manage it.
SUSBillCollector
post Jul 28 2019, 08:48 PM

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QUOTE(tometoto @ Jul 28 2019, 07:37 PM)
Tq share here it is very inspired.

I am otw also. But at the moment love my job and low stress since working at university. Planning to work until 60 and have saving about 2m. At the moment got 500k cash already at age of 35.

Keep sharing here
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Well done, you are probably better off than 70% of the workforce worldwide if by 40 you have saved up 1/4 of what you need for retirement.

How do you intend to bring it up to 2m?
SUSBillCollector
post Jul 30 2019, 10:04 AM

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QUOTE(Hansel @ Jul 29 2019, 10:41 AM)
Tq BC,... I appreciated your input,...

The IRS has the world's most complicated taxation methodology in the world,... their taxation on Worldwide Income is the strictest. Filling-in of FATCA forms when opening accounts everywhere in the world today proves this,...

I just have another suspicion here : am I right is saying, if you are a US Tx Resident, Financial Insts everywhere are quite hesitant in 'doing business' with you,... unless your amt is really huge,...
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Yes unfortunately US has one of the craziest taxation systems in the world especially if you have income from offshore sources.

Your suspicions isn't far from the truth especially if it is any investment or any interest bearing accounts. Thankfully am only US resident for tax purposes and not a US citizen else it would be even more difficult to be a joint name on an account of any kind whether it is a priority or premier banking account or not. The pains of having an American citizen as a spouse but that's life.
SUSBillCollector
post Jul 31 2019, 01:50 AM

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QUOTE(tometoto @ Jul 30 2019, 12:11 PM)
Just to share here.

Bond in very poor family
But I believe good education can get a better job and better salary

I am believe that I am quite lucky

Brought a property at age 25 at rm120k. Manage to settle home loan on 2017 and
Just dispose it last year 2018 at rm350k

And save 50-60% of the salary and able to get around 150k.

I have sacrificed a lot with a very boring lifestyle.

Very seldom go back to my home town. And until now still ride kapchai moto bike.

Get married at age 31. And have 1 child now.
Wife is fully house wife.
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You have done well in life.

Buying a second home soon? I am guessing that you do also own a car but mostly use the motorbike?
SUSBillCollector
post Aug 1 2019, 12:57 AM

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QUOTE(Hansel @ Jul 31 2019, 05:17 PM)
BC,... upon retirement, would you think continuing to develop properties and continuing to receive rentals still be a viable method to earn passive income, especially when we don't have the energy to chase delinquent payments anymore ?

More so,... when your properties are halfway cross the world,...

Well,... I also invest into rental properties,.... and I find collecting dividends and coupons easier to do then collecting rentals for passive income.
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I doubt I would stop redeveloping or taking on regeneration projects. I do it for interest, professional relevance as well as investment. However what will change is closer to retirement I probably would stop doing it for my own but purely for the fees and experience, most likely will do less as well as time goes by.

Properties across the globe? I haven't quite thought or decided on how I would manage them when I no longer have the energy to run around the same way.

No doubt dividends and coupons would be easier but without me taking on some of these development or regeneration projects I lose my relevance as a consultant for urban regeneration.
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post Aug 7 2019, 01:46 AM

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QUOTE(meonkutu11 @ Aug 7 2019, 01:15 AM)
Bill,

What’s your opinion on the off plan projects in UK with current situation?
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In today's Britain it will depend on the location, proximity to rail/tube services and what energy efficiency rating it is been promised.

However I would not buy anything unless it is being built by the best of the best of developers as currently one of the biggest issues facing the building industry is awash with cash flow, materials and worker shortages due to Brexit.

Anyway I won't invest in any real estate in Britain at this moment in time until there is a clearer picture on Brexit.

Is there a project that is off interest to you?
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post Aug 7 2019, 10:47 PM

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QUOTE(meonkutu11 @ Aug 7 2019, 04:00 AM)
I bought one unit in Salford from X1 in 2016.

Been thinking whether it is a good time to get another one maybe also in Manchester or Birmingham or Liverpool.

Care to share the reliable and good developer over there?
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Barratt Homes is pretty reliable especially at the mid-end market.
Persimmon is good especially outside of London.
Redrow is a very good ones on similar standing as SP Setia before it was taken over.
Taylor Wimpey is an excellent one but it is also reflected in the price of their product. Excellent craftsmanship and after sales service. This is a one of the best house builders in Britain.
Keepmoat is good if all you are after is something cheap and halfway decent, it delivers just that a house.
Bellway does deliver a good location but usually the house isn't the best.

If you are planning to buy at any of the port cities I would hold on till the HM Government announces where would be the location of that 8 new freeports that they are setting up after Brexit.

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