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> Top 5 Tips for Newbie in Property Business, Sharing is Caring (Investment)

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TS cliffekent
post Feb 8 2019, 02:53 PM, updated 4w ago

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Top 5 Tips for Newbie in Property Business
房地产业新手的五大贴士
 
1. How much you can borrow from bank?
So you can start searching the property based on your loan ability. No need waste time over your budget.
Formula: Gross Salary (not yet minus epf or tax) x 0.8 x 0.7 - (your commitment like house loan, pptn, car loan, credit card total amount owe x 5%) x 200
 
你可以从银行借到多少钱?
因此,你可以根据自己的借贷能力开始搜索房产。无需浪费时间超出预算。
公式:
总薪水(尚未减去epf或税)x 0.8 x 0.7  - (债务如:房屋贷款,pptn,汽车贷款,信用卡总金额x 5%)x 200
 
2. Reduce Unnecessary Expense
Spend what u NEED. Not WANTS, like expensive bag, gadget, cloth, branded thing. So you can do Negative Gearing for the property u buy. Give worst case scenario. Lowest rental there, then how much you need gear. Then u can afford to gear or not. All based on your active income to gear, if your head no so big, then DO NOT over gear.
 
Eg:
Bank Loan: 500k, Terms: 35 years,
Interest: 4.55%, Instalment: 2400, Rental: 1200
Every month you need to negative gear RM1200. But your salary only RM4500, minus epf all thing. Nett salary only RM3600 – RM1200= Left RM2400. Not yet include your car loan, other living cost, and maintenances of the house. So DO NOT over gear.
 
减少不必要的费用
花你需要的,而非想要的,比如昂贵的包,小工具,布料,名牌货。这样你才可以为你买的房产承担得起负杠杆。给出最糟糕的情况。那里租金最低,那么你到底需要多少的负杠杆,再来考虑自己是否承担得起。这一切都是基于你的主动收入来杠杆的,如果你的头没那么大,那就不要过度杠杆了。
 
例如:
银行贷款:500k,条款:35年,
利息:4.55%,分期付款:2400,租金:1200
每个月你的负杠杆为RM1,200。但你的工资只有RM4,500,减去epf所有的东西。净工资仅为RM3,600。
减掉RM1,200后,还剩下RM2,400。这尚未包括你的汽车贷款,其他生活费用和房屋维护。所以请不要过度进行负杠杆。

 
3. The rental minimum must cover the bank interest (using amortization table: google EZ Financial Calculators)
租金最低限额必须能够偿还银行利息(使用摊销表:谷歌EZ金融计算器)
摊销 – 分期偿还
 
Eg:
Bank Loan: 500k, Terms: 35 years,
Interest: 4.55%, Instalment: 2400 (1900 is interest, 500 principal)
In this example, 1900 is the interest you need pay to the bank when you borrow 500k loan from bank. So your rental minimum also need cover 1900 in order to no lose interest to the bank.
Another 500 principle treat it as a saving (better feeling). Because when you sell your property you can get back. Let say after 10 year your property provided in good location appreciate to 650k. You earn around 150k+-.
 
例如:
银行贷款:500k,条款:35年,
利息:4.55%,分期付款:2,400(1,900是利息,500本金)
在这个例子中,1,900是你从银行借贷500k所需要向银行支付的利息。因此,您的最低租金金额必须是1,900,以避免损失利息。
另一个500原则是将其视为一种储蓄(至少让你感觉好一些)。因为当你出售你的房产时,你可以把这个款项给拿回来。让我们说10年后您的物业因为好地理而升值至650k。你赚了大约150k+-。
 
4. No Cash or No Capital, die die must invest property. Suitable for low active income and 3k-4k salary use No money down strategy. Mean no need capital also can buy n make rental must cover instalment having positive cash flow. Usually is low and mid cost apartment can do. Below 300k, n find below market value 20-30%. 2 quota finish, 3rd use 70% buy. (Buy from secondary or auction market)
 
Strategy:
Each year buy 1 low cost apartment (below 150k) until 4th low cost apartment. After 5-8 year, sell out one by one. Get the capital gain buy residential or commercial. You get the skill n knowledge to buy residential n commercial after u buy 4th low cost apartment.
 
4.没有现金或没有资本却无论如何都想要投资房地产。(死死都要买)
可以考虑低成本公寓,这些通常都给你正现金流量,平均租金可以偿还分期付款。风险低,资本收益缓慢。或者找到低于市场价值的房产。 2个配额完成,第3个使用70%购买。 (从二级/转卖产业或拍卖市场购买)
 
战略:
每年购买1个低成本公寓(低于150k)直到第4个低成本公寓。 5 - 8年后,逐一卖出去。所获得的钱(资本收益)可以用来购买住宅或商业房产。当你购买第4个低成本公寓后,你将具备购买住宅商业房产所需的技能。
 
Pros
a)Low entry cost (zero down)
b)High return (usually rental cover instalment n positive cash flow)
c)Easy rent out
d)low risk
优点
a)入门成本低(零下降)
b)高回报(通常是租金可以偿还分期付款和给予正现金流)
c)轻松出租
 
Cons
a)Low Tenant quality
b)High Maintenance
c)Hard collect rental
d)Cannot sell within 5yrs
e)Hard to sell
f) low capital gain
缺点
a)低租户质量
b)高维修费
c)难以收取租金
d)不能在5年内出售
e)难以出售
 
How to choose good low cost
a) Location (btw tier 1 - tier 2) like ard KLCC area.
b) Mrt/lrt
c) Old but gd maintainence
d) Rental must cover installment
e) Research online below 200k
f) Can Mark up
g) Use IHC or 3rd quota
如何选择好的低成本公寓
a)位置(最好是一线或是二线区域),例如KLCC区域。
b)捷运/轻轨
c)旧但是要“保养”好
d)租金的数额必须可以偿还分期付款
e)请上网研究那些200k以下的
f)可以Mark Up(Mark up是借比屋价更高的贷款以达到零头期买屋子)
g)使用IHC或第三配额

 
5. Use market rate and rental to evaluate New Project Price. (Comparative Analysis)
5.使用现有市场价格和现有租金来评估新房产项目的价格
 
You can research online to find this rate. If surrounding same type condo psf is around RM500psf (compare apple to apple). Then new project selling RM700psf. So is a no go for this project. Below is some grading system use by some guru
您可以上网研究以查出这些数据和比率。如果周围相同类型的公寓psf卖价大约RM500psf。然而这个新房产项目的价格为RM700psf。所以这个项目是不行的。下面是一些大师使用的评分系统
 
CA - Capital appreciation
CA  - 资本增值
 
CF - Cash flow
CF  - 现金流量
 
GRADE A
- CA : 20% upon completion (minimum 3 boosters needed)
- CF : positive. More than RM300.
等级A.
-  CA:完成后升值20%(至少要有3个会升值的因素)
-  CF:正面。超过300令吉。
 
GRADE B
- CA : min 10% upon completion
- CF : positive
等级B
-  CA:完成后至少升值10%
-  CF:正面
 
GRADE C
- CA : not much upon completion
- CF : breakeven
等级C.
-  CA:完成后升值不多
-  CF:收支平衡
 
 
GRADE D
- CA : no profit even if sold
- CF : negative up to RM500
等级D
-  CA:即使卖得出也没有获得利润
-  CF:负面数额高达RM500
 
 
GRADE E
- CA : loss of more than RM100k upon selling
- CF : negative more than RM1000
等级E
-  CA:销售时损失超过RM100k
-  CF:负面数额超过RM1,000
 

LANDED PROPERTY GRADING SYSTEM
有地房产的评级系统
 
Grade A
Covers 70% of installments
Capital Gain : 10-20%
A级
租金可以偿还70%的分期付款
资本增值:10-20%
 
Grade B
Covers 60% of installments
Capital Gain : 5-10%
B级
租金可以偿还60%的分期付款
资本增值:5-10%
 
Grade C
Covers 50% of installments
Capital Gain : -5 to 5%
C级
租金可以偿还50%的分期付款
资本增值:-5至5%
 
Grade D
Covers 40% of installments
Capital Gain : -5 to -10%
D级
租金可以偿还40%的分期付款
资本增值:-5至-10%
 
Grade E
Covers less than 40% of installments
Capital Gain : -10 to -20%
E级
租金可以偿还少过40%的分期付款
资本增值:-10至-20%
 
Based on this grading system for landed properties, we can determine which type of landed property is a good buy and which is a bad buy.
基于这种有地房产的评级系统,我们可以确定哪种类型的有地房产是一项好的选择,或是坏的选择。
 
If you are buying into landed properties, negative cash flow is expected.
If you are buying into high rise property, negative cash flow is unacceptable unless 2-3 boosters coming into the area in the next 5 years.
如果您购买有地房产,预计会出现负面现金流。
如果您购买高层房产,负面现金流是不能被接受的,除非在未来5年内该区域会出现2-3个升值的因素。


In Conclusion
结论
 
Property is NOT a Investment. Property is a BUSINESS.
Business require capital to manage it. If you have this mindset, you will treat maintenance, tax and other miscellaneous cost as a business cost.
 
You should not have a “plant vegetables” mindset
You should have a “plant a tree” mindset
 
房产不是投资,而是一门生意。
生意需要资金来管理。如果您有这种心态,那么应该把维护,税收和其他杂用视为生意费用。
 
你不应该抱有“种菜”的心态, 你应该保持着“种树”的观念
 

References
AW
Tony Yap
FR
Dr Victor Gan

This post has been edited by cliffekent: Apr 2 2019, 10:27 AM
Sand Dust
post Feb 8 2019, 03:21 PM

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How does current assets (shares, cash, unit trusts, houses etc) will help to get more loans? Any formula to calculate?
TS cliffekent
post Feb 8 2019, 03:30 PM

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QUOTE(Sand Dust @ Feb 8 2019, 03:21 PM)
How does current assets (shares, cash, unit trusts, houses etc) will help to get more loans? Any formula to calculate?
*
If your this asset worth 1 million and above. You will become high net worth group in terms of bank. Bank usually borrow 70% DSR.
If you declare as high net worth group, DSR can be 80%-150%. Each bank have different assessment. Please consult bank.

This post has been edited by cliffekent: Feb 8 2019, 03:35 PM
icemanfx
post Feb 8 2019, 04:33 PM

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20% or more DSR is considered stretched, risk become mortgage prisoner. Capable to borrow doesn't equal to capable to repay.

Over leverage is not a path to wealth accumulation but recipe for financial ruin.

property investment is not newly invented or discovered. if property investment is as easy as claimed, every da ma and kopitiam unkers are property tycoons, and there should be a lot more than about 3% of adults in this country have over us$100k net worth.

Property bull run 2011-2014 fuelled by cheap and easy credit was a fallout of u.s qe and unlikely to reoccur in the foreseeable future.

In the long term, residential property price rise at about inflation rate. As most buy with bank loan, after deducting loan interest, net gain is less than most expected.

Until current property overhang is reduced substantially, property price is unlikely to rise. By about 2030, Malaysia will become a ageing nation. If Japan is any precedence, property demand and price is expected to be on a long downtrend.

Property investment is a zero sum game; developer/vendor and buyer are on different sides of the same coin; one's gain is another loss.

Those blinded by greed are like those blinded by love, see different in opinion as noise.

Sharing is caring.

This post has been edited by icemanfx: Feb 8 2019, 05:40 PM
TS cliffekent
post Feb 8 2019, 08:30 PM

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20% or more DSR is considered stretched, risk become mortgage prisoner. Capable to borrow doesn't equal to capable to repay.

Over leverage is not a path to wealth accumulation but recipe for financial ruin.

Yes. Do not over leverage, as I mention in the article also.


property investment is not newly invented or discovered. if property investment is as easy as claimed, every da ma and kopitiam unkers are property tycoons, and there should be a lot more than about 3% of adults in this country have over us$100k net worth.

Property bull run 2011-2014 fuelled by cheap and easy credit was a fallout of u.s qe and unlikely to reoccur in the foreseeable future.

In the long term, residential property price rise at about inflation rate. As most buy with bank loan, after deducting loan interest, net gain is less than most expected.

Ya. That y I say rental must cover bank interest.

Until current property overhang is reduced substantially, property price is unlikely to rise. By about 2030, Malaysia will become a ageing nation. If Japan is any precedence, property demand and price is expected to be on a long downtrend.

What I see is current property is in stagnant stage, due to previous year growth too rapid. Then government in order to prevent property bubble. So government impose cooling measure in. How long it will stagnant, I think nobody can ans it.

Property investment is a zero sum game; developer/vendor and buyer are on different sides of the same coin; one's gain is another loss.

Those blinded by greed are like those blinded by love, see different in opinion as noise.

Sharing is caring.
LoTek
post Feb 9 2019, 03:01 PM

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Note 1 : current govt "cooling measure" is more like fanning the overheating flames. Beware.

Noe 2 : can't overemphasise the difficulty of collecting rental from low cost properties. Yield might look good on paper but in actual fact collection is nightmare of nightmares. Friend actually got threatened back by his tenant when he went (for the 3rd attempt) to collect. In the end not only he could not collect rental, he paid for locksmith to cut tenant's lock and lorry to carry the tenants furniture away.
langstrasse
post Feb 9 2019, 03:06 PM

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QUOTE(LoTek @ Feb 9 2019, 03:01 PM)
Note 1 : current govt "cooling measure" is more like fanning the overheating flames. Beware.

Noe 2 : can't overemphasise the difficulty of collecting rental from low cost properties. Yield might look good on paper but in actual fact collection is nightmare of nightmares. Friend actually got threatened back by his tenant when he went (for the 3rd attempt) to collect. In the end not only he could not collect rental, he paid for locksmith to cut tenant's lock and lorry to carry the tenants furniture away.
*
Agreed on Note 2 - low cost properties bring their unique set of tenant characters.
AskarPerang
post Feb 9 2019, 03:53 PM

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Plus low capital appreciation for low cost units. Very hard to dispose off coz the next buyer must fulfill the requirement set such as must be 1st home buyer and income cannot be more than 5k.

It is better to just buy medium cost apartment at non prime area at the same pricing with those prime area low cost flat (around 200k). Probably can fetch the same rental too if you know the area demand.

Good luck.
leodinouknow
post Feb 9 2019, 04:12 PM

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low cost apartment, need scan and chose the tenant. cannot simply ask agent help rent it out for you.
LoTek
post Feb 9 2019, 04:20 PM

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alot of work managing those low end props, not everybody can do. that friend laughed at me, said his 10 units of 100k units yielding double of my 1 unit of 800k.

but i pointed out, i get to keep working at my job, or taking weeks off when i want to, whereas he spends the whole life running them 😂
leodinouknow
post Feb 9 2019, 05:08 PM

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QUOTE(LoTek @ Feb 9 2019, 05:20 PM)
alot of work managing those low end props, not everybody can do. that friend laughed at me, said his 10 units of 100k units yielding double of my 1 unit of 800k.

but i pointed out, i get to keep working at my job, or taking weeks off when i want to, whereas he spends the whole life running them 😂
*
you & your friend cash rich
icemanfx
post Feb 9 2019, 05:18 PM

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QUOTE(LoTek @ Feb 9 2019, 04:20 PM)
alot of work managing those low end props, not everybody can do. that friend laughed at me, said his 10 units of 100k units yielding double of my 1 unit of 800k.

but i pointed out, i get to keep working at my job, or taking weeks off when i want to, whereas he spends the whole life running them 😂
*
QUOTE(leodinouknow @ Feb 9 2019, 05:08 PM)
you & your friend cash rich
*
Property game is not newly invented or discovered. If low cost rental is a worthwhile proposition, many da ma especially those cash rich would be at it. Gen y or z won't stand a chance to queue.
Bjorn1688
post Feb 9 2019, 05:35 PM

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QUOTE(LoTek @ Feb 9 2019, 03:01 PM)
Noe 2 : can't overemphasise the difficulty of collecting rental from low cost properties. Yield might look good on paper but in actual fact collection is nightmare of nightmares. Friend actually got threatened back by his tenant when he went (for the 3rd attempt) to collect. In the end not only he could not collect rental, he paid for locksmith to cut tenant's lock and lorry to carry the tenants furniture away.
*
Haha yeah there are gains in theory and actual reality.

Never underestimate the difficulty in collecting rental from people who in reality have little to nothing to lose in life.

Used to know this bloke who had several of these low cost properties. His actual "profession" was a loan shark. He tried collecting rent from a "difficult" tenant, ended up he was slashed twice with a parang by the daughter of his tenant while trying to collect rental. Later she turned the story that he was trying to rape her.

This isn't a market that is worth the time and effort and that will eventually apply to all those first home program homes too which eventually will become cestpool of social problems.
LoTek
post Feb 9 2019, 05:37 PM

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QUOTE(leodinouknow @ Feb 9 2019, 05:08 PM)
you & your friend cash rich
*
i dont know him but in certainly up to my nose in debt bruh haha
LoTek
post Feb 9 2019, 05:38 PM

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QUOTE(Bjorn1688 @ Feb 9 2019, 05:35 PM)
Haha yeah there are gains in theory and actual reality.

Never underestimate the difficulty in collecting rental from people who in reality have little to nothing to lose in life.

Used to know this bloke who had several of these low cost properties. His actual "profession" was a loan shark. He tried collecting rent from a "difficult" tenant, ended up he was slashed twice with a parang by the daughter of his tenant while trying to collect rental. Later she turned the story that he was trying to rape her.

This isn't a market that is worth the time and effort and that will eventually apply to all those first home program homes too which eventually will become cestpool of social problems.
*
hahaha lesson is there is always a bigger shark in the ocean. wah this story can be an idea for a jack neo film already
BEANCOUNTER
post Feb 9 2019, 07:37 PM

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I seriously dont know what is this thread all about
leodinouknow
post Feb 9 2019, 08:38 PM

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QUOTE(LoTek @ Feb 9 2019, 06:37 PM)
i dont know him but in certainly up to my nose in debt bruh haha
*
debt is good


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leodinouknow
post Feb 9 2019, 08:39 PM

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QUOTE(Bjorn1688 @ Feb 9 2019, 06:35 PM)
Haha yeah there are gains in theory and actual reality.

Never underestimate the difficulty in collecting rental from people who in reality have little to nothing to lose in life.

Used to know this bloke who had several of these low cost properties. His actual "profession" was a loan shark. He tried collecting rent from a "difficult" tenant, ended up he was slashed twice with a parang by the daughter of his tenant while trying to collect rental. Later she turned the story that he was trying to rape her.

This isn't a market that is worth the time and effort and that will eventually apply to all those first home program homes too which eventually will become cestpool of social problems.
*
shark getting bite by small fish
icemanfx
post Feb 9 2019, 08:50 PM

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QUOTE(leodinouknow @ Feb 9 2019, 08:38 PM)
debt is good
*
Provided you could pay back on time.
leodinouknow
post Feb 9 2019, 09:35 PM

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QUOTE(icemanfx @ Feb 9 2019, 09:50 PM)
Provided you could pay back on time.
*
we want the benefit of owning the house only, but we dont want the house itself. let the bank have it.

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