Hello, I am a property newbie here researching property.

I am scouting property to buy in KL. I saw this project rental indication is higher than the installment amount at Propertyguru vs the selling price. I asked the sales there they mentioned still got unit but now handing over the keys.

In Propertyguru, the sell price is RM850k, the installment I saw is RM3486; The rental is RM3700-RM4000.

I am inexperience, can someone enlighten me is it true that the rental higher than the installment?

I am trying to make a purchasing decision.

Indeed, it seems to me the rental is there, I searched propertyguru and saw KL Gateway is renting between RM3300-RM4000, with some nice designed unit fetching higher price. Sorry guys, newbie can't post link.

Anyone doing fully designed unit? What is the cost?

Had a look into the rental prices and I find it a bit suspect with the same stock photos being used for the properties with the exact same price as well as it all being under the one agent.

Perhaps it’s too early days to tell how this place will be received for rental. Since you haven’t bought yet, you can afford to wait a bit more to gauge the reality.

I’m guessing it’s the 1184 sqft variant for 850k? Logically it’s 4 bedrooms and should be able to command above 3.5k but it remains to be seen. To be able to fully cover your instalment and offset some of the management fees is very much desired of course.

This post has been edited by Cavatzu: Aug 29 2022, 09:29 AM

Yes, I am looking into Type B with 1200 sq feet variant. That is the reason I register the account and finding out more info.

Like you said, I am also thinking about the RM3500. If based on KL Gateway Premium (i am not familiar with that place), should be able to command some premium over that particular property because it is new?

But based Calvin's map (much thanks to Calvin), this KL Gateway seems to closer to LRT, and the location seems to be more convenient. Perhaps KL Gateway is a have better locations but its facilities are not so good? Yet what is the reason Goodwood seems to have a premium to KL Gateway? Although I saw the range at RM3300-RM4000, but isn't property about location, location, location?

Hmm....I think I will go Bangsar South and scout the area when I am free.

I am still newbie and really have much to learn about property, much thanks for everyone for their reply and informations.

You have the right idea. Ideally a cash flow neutral or positive investment but those are hard to come by IF you buy today. It’s usually opportunistic purchases like fire sales or auctions that give you that opportunity. These are the holy grail of property.

I am quite unsure now. Last time I saw kl gateway premium got RM3300-RM4000, I might be too excited and thought Goodwood might command such a price.

But now after considering what you and Calvin said, I think an average might be better. Or like you said look and see first.

Not too sure it can command RM4000 now, let's see if RM3500 is the level.

Will scout the area first, since KL Gateway I am not familiar and doesn't have a clue aside from the map which I saw nearby LRT and suppose to command a premium compared to Goodwood, but now Goodwood seems to command a premium to KL Gateway.

Is the LRT nearby Goodwood similar to KL Gateway? Walkable distance like 5min too?

I heeded your all advise and scout nearby and even arrange a viewing at KL Gateaway today and a quick tour at Goodwood. Time for me to contribute some intel too, hahaha.

Location

I went to see KL Gateway, the location is the best in Bangsar South. From Federal Highway, it is just around the corner. It is also beside and linked with LRT, the agent told me it is LRT University. And it is nearer to the UM, I guessed that's why they named it University. The mall is just below and there are variety of foods. My favourite Subway is opening an outlet there. It is also very visible from Federal Highway.

KL Gateway Location: 5 Stars

Goodwood however is located much inner part of Bangsar South. Need to go straight up the hill then turn at the traffic light, the entrance is not too obvious. If there is traffic jam, it would take sometime just to turn into that juncture. First impression not so good. There is covered walkway to the next mall (Nexus? Or Connection? not sure) but it is just covered walkway, not a linked bridge that covered all nor it is below the condo like KL Gateway, if raining sure get wet. And from there, they mentioned there is another bridge to the offices? Locations wise, I can see if traffic jam with car it would be nightmare. Walking distance to offices is achievable but still 10 minutes walk at least (and no rain). It is also far from UM, unless someone drive (then stuck in the jam) else it would really be a hard sell compare to KL Gateway.

Goodwood Location: 3 Stars

Facility

KL Gateway facility is almost identical to Goodwood, some main facility like Gym, Pool, BBQ area is there. It is not very outlandish but very practical. I personally dislike the pool as it seems to be surrounded by buildings and have no privacy. But what impressed me is the business center there. People can work there or have a lounge to relax. This is a big bonus for working adults as we worked from home and away from the kids and family but not too away. We just need a place to have a cup of coffee and do some work alone before heading upstairs for dinner/lunch. I much prefer a business center and I think working adults would love it too. Get a cup of coffee downstairs and we could start work there.

KL Gateway Facility: 5 Stars (minus the pool)

The first impression I walk into Goodwood I am impressed with the greenery there. There are butterflies flying around and I like the ambience of the resort feeling. The clubhouse is a standalone building which adds better impression. There are a lot of facility around. Unfortunately, it doesn't seems very practical even for a retiree, much less for family adults. The signature Water Fountain is nice but... let's just said I knew it's costly to run. And there is Karaoke, not too sure if it is catering for whom. The multipurpose hall is not impressive but just passable. The garden is nice with a breeze of wind, I still enjoy the butterflies. But from there it is puzzling that a hydrotherapy pool is there. Very puzzling. I am unsure who is going to use it, I myself go physiotherapy and I recognised that the pool is very expansive to maintain. Then there is Mahjong room. No business center, no splashy multipurpose hall, a bit of let down.

Goodwood Facility: Not too sure. Read my conclusions.

Ambience/ Overall feeling

KL Gateway lobby is splashy. It is the 5 Stars hotel style (believe me, I go 5 Stars hotel every week) with spacious sight. The decoration is certainly fit into the kind of high living where you expect things to be 5 stars. Then you will be ushered into the private lift that goes to the unit. The impression I get is that the lift only cater for those private units and not sharing. It is only to your doorsteps. I think it is private lift for every unit? It seems the occupants there are well off or professionals. What I dislike is the small exit to the mall, which seems to me like a shortcut than an exit for this upscale condo. But that is not the main entrance and it doesn't cause bad image to the building, just bring your friend through the main lobby and they would be impressed.

KL Gateway Ambience/ Overall feeling: 5 Stars

Although I am impressed with the Clubhouse and the exterior of it, I am not too impressed with the inside. I think the overall finishing is passable. Not too sure is it my predisposition that Goodwood is luxurious or upscale, I simply unimpressed with the interior. The lift seems to be shared by too many units and the finishing is not too luxurious, giving me an impression it is a midscale one. Perhaps this place is a mid scale project? But I am unsure because the price tag and the rental range indicates otherwise. Honestly, to me it is a letdown. Maybe from the exterior I thought of better interior but... and there isn't much lobby to be presented with. The lobby is just empty and normal. Goodwood is new, and I don't see much occupants, but I have an impression that this might be a family friendly place, just not the upscale luxurious projections I expected.

Goodwood Ambience/ Overall feeling: 3.5 Stars

Conclusion

Before I start my conclusion, I am just a newbie and I just mentioned what I saw, maybe property investment has more considerations that I missed. Some enlightenment and encouragement is welcomed.

I have the feeling that Goodwood have lots of hit and missed. I am confused as to whom is living there, perhaps they are targeting everyone? I even saw Mahjong room, which is something I never seen at any condo. Another facility hydrotherapy pool, this one I think is an over over over-kill offerings, it is needy to someone who needs it, but even me don't really need a hydrotherapy pool despite I am having back pains, because without professionals it would not be advisable to use it. Then the water fountains while it is impressive, it just not practical to open it everyday every moment, then what's for? The facility is as if they are putting everything inside but not much is practical. Perhaps a nice business center and multipurpose hall would be much impressing. But Goodwood is exactly lacking these two. The business center or working space as they put it, is simply a bean bag room. I certainly won't work there. I really hope some modifications could be done or at least rectify it. Perhaps converting one of the rooms into business center or collaborating with physiotherapy center to use the hydrotherapy pool? Overall, facilities are an overkill but non practical.

Location wise, facility wise, ambience wise, I think KL Gateway should command a premium to Goodwood. No doubt. Like Calvin said, the law of demand vs supply and competition dictating the price. If KL Gateway price at that level, Goodwood shouldn't be over it. I don't think that being NEW would be sufficient to compensate what Goodwood is lacking or not offering. Getting someone to pay high price to some unit is lucky, getting everyone to pay high price for every unit is like betting roulette. I doubt the roulette would be good for investors who is not gambler.

My investment decision is based on the rental. Given the situation, the rental I think would be lower or maximum on par with KL Gateway. Some people might prefer a new place and they like the new scent (My boss once told me those are chemical and harmful, hahahaha) and pay a higher rental, but overall market must be taken into consideration. I think RM3500 fully furnished might be a bit too optimistic, even with KL Gateway might be renting the top range of RM4000, like Cavatzu said the RM3500 is remained to be seen, and KL Gateway is asking is at RM3300-RM4000 max with an average of RM3500. There are the doubts I have and I think I will observe first. Being new as a selling point alone doesn't really suits my risk appetite, neither it would suits I think for most property investors, as the new could become the old and the new new comes sooner than we thought, as always. If the rental longevity could not be sustained, it would be pointless to take such a long tenure loans.

Here is KL Gateway lobby. Sorry for the cleaner in the middle, it is also good indication they are doing cleaning frequently.

It is really 5 Stars feeling. Goodwood doesn't exude this impression.

this is KL Gateway Premium Residences, not KL Gateway though, these 2 are different.

Thanks for your lengthy review and really appreciate your effort on this.

From the investment POV, do you think it's feasible in long run?

Thanks for quoting me though I generally try not to give any conclusive statements beyond what I’ve researched or have experienced. So in short we don’t know what we don’t know. I come from a generation where class was very clearly delineated in Malaysian society so I will gravitate towards older addresses. It’s not so much like that nowadays and I may not even be au fait with what’s the in trend location - I still struggle to understand DPC though I know it’s become a resounding success.

But you seem to understand taste so let that be a precursor of your investment but don’t let that be the only thing. Consider everything as an aggregate - a whole piece of the puzzle. There’s people who think a MRT is all that’s needed to make a project successful but it’s great that you’re looking at the finer detail and livability to come up with your own conclusion.

Super oversupply here.

Plus don’t forget there are other expenses.

Service charges, sinking fund, quit rent, assessment, insurance, agency fees, repairs etc

I am back. Today I managed to sneak out of my office (with my boss blessing, hahaha) and managed to pay a visit to Goodwood, managed to visit the management office and the VP to have some chit chat with some new "pal" there.

For the past week, I also called some of the listing. What I encounter I can only describe as bizarre.

Tomorrow I will go Bangsar South area and take a deep look as last time I only managed to visit some outer part area. Cafe, Cafe, Cafe, here I come!

I signed my SPA few days ago, how can i join the owners group?

Looking forward to hearing from you!!

The rental here does seem to be strong at first glance on the property portals with asking rents of 3.5-4 psf. Need this to settle down first to get a more realistic picture. But if the rents are achievable then this is a cashflow neutral or positive investment property.

This post has been edited by Cavatzu: Sep 18 2022, 01:44 PM

There is much to learn in property and I considered myself lucky to have gained experience despite being a newbie here, certainly property is not as straight forward as it seems, thank you all for helping and I am here to share what I gained and what I could. And especially thank for my friend who is willing to spend half day with me to scout Bangsar South, I feel worth to treat him dinner, hahahaha!

I went with my friend to Bangsar South area to do a deep scouting. I dragged my close friend who is a senior property for some public listed co boss and he focus more on commercial side at KLCC and Bangsar area albeit with less focus on residential.

He brought me around (I drive, he talks) and we had a good evening at Papa Rich (seems to be the only one left). The area has few others condos like Secoya, Hillpark, Novum, and along the way there are others developments as well.

After touring the area, we chat about it and what transpired a few days ago.

A few days ago, the rental listings at Propertyguru I tried to call. The situation can be described as bizarre. Most call ends up with agents mentioning the unit has been rented out despite the photos showing bare empty units. Some hung up on me as soon as I mention I want to rent, what a weird listing despite listed for rent.

Some agents are friendly though and they seemed genuinely serious on business, we chatted on the rentals and the situation. They mentioned that the place is new and now not much units been handovered but most are expecting a rental of RM4000 and above, how they arriving at this price juncture is a mystery but most owner insist that is the price level. They seems to be contacted by some parties that offered renovation package and the renovators said that the price could be fetched much higher than market would suggest otherwise. As agents, they could only follow owners instruction and see how the market plays out. One agent lamented that it is a hard sell as his potential tenant turned down the place immediately the potential tenant heard about the rentals at Goodwood.

At the same time, I sneak out to paid a visit again to Goodwood during working hour and managed to make some new friend there. The situation is like this: around 200+ units has been VPed, 80% units sold with Type A sold out. Out of that 200+ units, less than 20 units already moved in.

This contradict directly with the "rented out" narrative that agents mentioned. Why are they doing so? There isn't a slightest clue in my mind... until I met my friend.

"Dude, you are thinking too much!", exclaimed my friend.

My friend and I go around Bangsar South, there are many developments there. He mentioned that UOA isn't the only big player in vicinity. There are MRCB, YTL, IJM, Chin Hin all having their footprint there. There are much supply in term of residential and there will be more. It is all about supply and demand. Supply up, price drop until demand met. Just that simple. No fancy fancy words needed. Target this lah, target that lah, getting higher market rental lah, do airbnb lah, etc etc. And he asked me few question:

"Is there any other residential supply nearby? what is their price?"

"Any restriction on these residential such as airbnb?"

"Who is going to rent and how much they willing to go? Not just indicative but their real ability to pay"

"what is the owners type which is on supply side and do they truly embrace the market?"

I was shocked at the moment and my mind fumbled. Other than the first question (which my friend even jokingly said I am sloppy on that), the other questions I came out blank. Totally blank. No wonder he is the agent of big boss and I a newbie.

I tried to convince him with what I saw, like a good location & linkage to offices, the place is new with a lot of amenities, and the place is targeting higher income earner. He cut me short once he heard the word "targeting".

"Dude, you are thinking too much!", he continued "targeting high income earner but then the rental price so high, the only one that pays are either rich students who doesn't care about spending their parents money or airbnb who doesn't care the facilities maintenance, you call this targeting?" that pretty much shut down my convincing.

"and Lee, that place couldn't rely on being just one factor wow, market must be realistic for both parties the renter and the owner to effect transaction". He then mentioned the building nearby "see that building? it is The Estate and another high end building" It was 8pm and clearly that there aren't many unit lights that lit up. "They demand high rental and now they got their fair share of headache, occupancy is low".

"but a low occupancy won't affect much right?" I asked.

My friend: "wrong, Lee. That means less people will be focusing on that building, agents come and go and that building will be labelled as a hard place. It would be hard to convince for people to help you to sell and you would have hard time to both rent and sell. and if owner are rich, get ready to have more headache"

Me: "alright, what if I get those package from renovator? will it be like what those renovator said that the unit able to rent higher?"

My friend replied curtly: "let me tell you an open secret. Back in those days, many developers want to sell units. They engaged with promoters that open seminars to "teach" how to do property investment and then sell them lower-than-bank value property. Those property price is in fact jacked up. Then the cash back gimmick starts to come along. Recently you saw a lot of compressed loan articles? These are the ones. After some time, even banks don't want to do any more. Developers has no choice, then they do bulk bulk purchase. For first few projects, it did succeed, but after that a lot of projects using same trick got burned. Few years later, they had to change their tactics. You know what, they now talk about cash flow cash flow cash flow, you know why? because those are for suckers. MCO strike and people are afraid of losing rentals. So they adapt at whatever market want and continue to do their seminars. The best part? You had to pay a shitload of money to join these seminars as buy ins, once you joined it there will be package offered. You will definitely take it cause you already paid for the seminars. Now it worked like this, previously it was the property selling, now it was the renovation/airbnb package selling, see the difference? after they execute the package, they promised to find tenants and subsidies the tenant to stay for a while. How they subsidies it? They can even request rebates from the agents, think about that lah! Imagine those owner take out RM70k package, they had been promised RM5-6k, for first two years they get the tenants to cover for them, then the rental follows market rate RM3-4k, this type of scenario I seen too much."

Me:"yet there must be differences between fully furnished nicely renovated unit and a bare empty unit, right?"

My friend:"My boss bought quite a few units at KLCC along with his staffs and friends. All rich guys with listed co background. My boss renovated RM100k and rented it out at RM3k. His staff just rented it out bare at RM2k. The difference of one thousand ringgit. That is in KLCC. Imagine here at Bangsar South. Think about it. For the difference of one thousand, you spending RM100k for it. For your case, even taking whatever package will cost you a whopping RM70k, it is a risky propositions. Big boss has listed company with lots of cash. You do not. And along with it a lots of owners are thinking the same and everyone else doing the same, you think it is easy to fight for the same group of renters who are willing to pay such hefty rent? RM5000 is not a small amount. Look at that building, they want RM7k rental, what they end up with? low occupancy"

Me:"what about the agents? they mentioned they rented out? and with strong demand? (i even showed him some photos)"

My friend: "it matters not. what matters is the restriction. some buildings starts to ban airbnb, some buildings ban students, some ban Africans or blacks. given the proximity of UM around Bangsar South, surely some restriction will be in place for these buildings. Go find out the restrictions then talk. Even someone offered sky high rental, if the building ban it, it is useless. And it's all comes down to demand and supply. Rather than figuring out how much price it can fetch, figure out the factors why other similar building with similar location is fetching that level of pricing. And to answers your confusions, some agents are listing a high high price listing to get owner contacts, if they list low low price meaning they want to get tenant contact and offer them somewhere else."

We chatted for hours, but these are the key things I remembered. I also remembered he did mentioned another project called Cubit around that area. He pointed the construction and showroom and asked me to check out that project if I am interested in that area. There is too much to be digested for me at Goodwood, not to mention another new project research.

Oh yah, I also chatted with him about KL Gateway Premium. He agree with my direction is correct. Much happy to hear it. I hope I can recalled more of the conversation. He did mention something very catchy but I can't remember it.

regarding your question, I am in no position to answer it. I shared whatever home work I did and advise from my friend. I think I missed some of his opinions, let me recalled it. I don't remember too much.

Finally, I remembered what my friend said:

"Owners can demand any rentals they like, it is important that the interest are aligned and sensible with the market. If market price is RM3000, demanding RM4000 is greed. If only one or few owners are doing this, then it is fine. Owners are human and human make mistakes. If the whole building does it then it is entirely different scenario: Pack your bag and leave. Either they will got hit hard by market or they surely courting trouble from undesirable outcome. From the information you mentioned, there is a lot of greed which is based not on facts but unwarranted wants and hearsay. How they arrived on the current rental asking is based on what owners commitments with cash back plus maintenance. Not supply and demand. Find a more sensible group of owners that have interest of the building in their heart. Be fearful when greedy and be greedy when fearful."

I think 95% of the landlord is purely operating for profit.

They can demand whatever rental they want. As long as the market is there, they will be able to fill their units.

If no demand, the whole building will be empty.

For eg: icon city at pj. Buy so expensive, when it was done they wanted to tenant out at high prices. The thing was mostly empty for many years. Now only start to fill up. That is also after rent start to fall.

Big wall of text there friend but I got through it. Well done on doing the research and seeking the counsel of others.

Critical thinking is so necessary to bridge the gap of what we don’t know, the facts we have and the lies we’re told to come up with our own conclusions.

But I think we’ve summed up the biggest aspiration of a property investor - to break even with a profit margin if possible. We’re seeing this at play here but we’re also extremely cognisant of the reality that it is a soft property market and these ads may be wishful thinking.

Perhaps many of the units are still going through reno so the truth will unveil itself in time. So don’t FOMO particularly when there’s still developer units available.

This post has been edited by Cavatzu: Sep 19 2022, 09:45 AM