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> If u have cash to spare, would you buy this

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TS doczane
post Feb 12 2019, 04:57 PM, updated 3 months ago

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Hi. Need opinion from sifus. Just had some modest inheritance left to my name and have spare cash from it.

Recently had an offer for a 2 storey shoplot in east coast state with ready tenant paying around rm4k rental per month total. Freehold. Located behind a university, near a mall and mcdonalds.
Asking price is 860k, off hand valuation by bank around 900k Planning to take 560k loan and the rest pay cash. HSBC may give 4.1-4.3% interest and after mortgage, rental will provide some 1k profit.
Is it a wise investment? Or should i get cheaper properties and pay cash.
Ideas welcome. Iโ€™m very noob in property investment.
Bjorn1688
post Feb 12 2019, 04:59 PM

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"east coast state"

No as I don't invest in shithole places.
kochin
post Feb 12 2019, 05:02 PM

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it's very hard to understand someone paying rm4k rental for a 900k valued property indeed.

in theory it is a very good investment.
so assuming if tenant run road, can you easily find a replacement tenant at the same rate?
TS doczane
post Feb 12 2019, 05:10 PM

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QUOTE(kochin @ Feb 12 2019, 05:02 PM)
it's very hard to understand someone paying rm4k rental for a 900k valued property indeed.

in theory it is a very good investment.
so assuming if tenant run road, can you easily find a replacement tenant at the same rate?
*
What do u mean by hard to understand as it is too cheap is it?
From rough survey, its a local hotspot, twice a week got pasar malam in front of it. Rental turnover seems easy according to other biz owners.
1 current tenant is handling her second restaurant branch there, another is housing a 20 rooms student hostel for the next door uni. Interviewed both and they seem to plan long term stay.
ahpooki
post Feb 12 2019, 05:11 PM

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east coast state.... nooooooooooooooooo
TS doczane
post Feb 12 2019, 05:11 PM

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QUOTE(Bjorn1688 @ Feb 12 2019, 04:59 PM)
"east coast state"

No as I don't invest in shithole places.
*
Haha. Too bad but I stay here. Ya, west coast higher yield but for that price, do u think rental yield better? Would appreciate any suggestion.
SquareFt
post Feb 12 2019, 05:21 PM

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QUOTE(doczane @ Feb 12 2019, 04:57 PM)
Hi. Need opinion from sifus. Just had some modest inheritance left to my name and have spare cash from it.

Recently had an offer for a 2 storey shoplot in east coast state with ready tenant paying around rm4k rental per month total. Freehold. Located behind a university, near a mall and mcdonalds.
Asking price is 860k, off hand valuation by bank around 900k Planning to take 560k loan and the rest pay cash. HSBC may give 4.1-4.3% interest and after mortgage, rental will provide some 1k profit.
Is it a wise investment? Or should i get cheaper properties and pay cash.
Ideas welcome. Iโ€™m very noob in property investment.
*
Commercial loan should be higher than Residential. How you get 4.1% rate? Also max tenure for commercial is 25 years so you sure 560k loan installment is only 3k? ROI is around 5.5% which is decent (but not fantastic for commercial).
TS doczane
post Feb 12 2019, 05:32 PM

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QUOTE(SquareFt @ Feb 12 2019, 05:21 PM)
Commercial loan should be higher than Residential. How you get 4.1% rate? Also max tenure for commercial is 25 years so you sure 560k loan installment is only 3k? ROI is around 5.5% which is decent (but not fantastic for commercial).
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user posted image
Spoke to a loan officer, he said the rate applicable to premier account holder. Though subject to bank approval once i submit my application.
SquareFt
post Feb 12 2019, 05:35 PM

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QUOTE(doczane @ Feb 12 2019, 05:32 PM)
user posted image
Spoke to a loan officer, he said the rate applicable to premier account holder. Though subject to bank approval once i submit my application.
*
Yea I saw that on loanstreet but I figured there was some clause attached as it was too good to be true. Make sure to check properly for hidden T&C.
nexona88
post Feb 12 2019, 06:19 PM

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QUOTE(doczane @ Feb 12 2019, 05:10 PM)
From rough survey, its a local hotspot, twice a week got pasar malam in front of it. Rental turnover seems easy according to other biz owners.
1 current tenant is handling her second restaurant branch there, another is housing a 20 rooms student hostel for the next door uni. Interviewed both and they seem to plan long term stay.
*
seems very good investments...
go for it... rclxms.gif

worse come worse, convert your place to students hostel too biggrin.gif I'm sure can get some good $$ from it too
potenza10
post Feb 12 2019, 06:44 PM

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QUOTE(nexona88 @ Feb 12 2019, 06:19 PM)
seems very good investments...
go for it...  rclxms.gif

worse come worse, convert your place to students hostel too  biggrin.gif  I'm sure can get some good $$ from it too
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Agreed
nexona88
post Feb 12 2019, 07:04 PM

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well students hostel is good investments too..
that's why u see shoplot being converted into one.. heck those bungalows also have been converted especially near universities campus
woolei
post Feb 12 2019, 10:16 PM

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QUOTE(nexona88 @ Feb 12 2019, 07:04 PM)
well students hostel is good investments too..
that's why u see shoplot being converted into one.. heck those bungalows also have been converted especially near universities campus
*
worth to convert shoplot to hostel meh? for commercial can easily fetch higher rental yield eh
iamkid
post Feb 12 2019, 10:28 PM

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i think its a good one if the tenant is definitely gonna stay. but not sure if 900k is worth for the shop.
BEANCOUNTER
post Feb 12 2019, 10:33 PM

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your 440k cash payment to buy this property, if you just put into FD at special rate of 4.5%, will net you rm1650 p.m.
nexona88
post Feb 12 2019, 10:36 PM

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QUOTE(woolei @ Feb 12 2019, 10:16 PM)
worth to convert shoplot to hostel meh? for commercial can easily fetch higher rental yield eh
*
worse case situation.. No tenants like 1 year above...
if can find commercial tenants, just stick to it...
Yggdrasil
post Feb 12 2019, 11:14 PM

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Make sure you can cover instalments in the event nobody rents your shop.
Sand Dust
post Feb 12 2019, 11:24 PM

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QUOTE(kochin @ Feb 12 2019, 05:02 PM)
it's very hard to understand someone paying rm4k rental for a 900k valued property indeed.

in theory it is a very good investment.
so assuming if tenant run road, can you easily find a replacement tenant at the same rate?
*
Agree.. check if rental rate sustainable..
TS doczane
post Feb 12 2019, 11:47 PM

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QUOTE(SquareFt @ Feb 12 2019, 05:35 PM)
Yea I saw that on loanstreet but I figured there was some clause attached as it was too good to be true. Make sure to check properly for hidden T&C.
*
Noted, and yes, will scrutinize it well. Thanks.

QUOTE(nexona88 @ Feb 12 2019, 06:19 PM)
seems very good investments...
go for it...  rclxms.gif

worse come worse, convert your place to students hostel too  biggrin.gif  I'm sure can get some good $$ from it too
*
I hope so, thatโ€™s what Iโ€™m betting on, all girls some more staying ๐Ÿ˜˜

QUOTE(BEANCOUNTER @ Feb 12 2019, 10:33 PM)
your 440k cash payment to buy this property, if you just put into FD at special rate of 4.5%, will net you rm1650 p.m.
*
You mean Bank Rakyat right? And that rate only for 60 months. Safer yes but no capital gain. My next bet.

QUOTE(Yggdrasil @ Feb 12 2019, 11:14 PM)
Make sure you can cover instalments in the event nobody rents your shop.
*
Ya, worst case scenario. But it main road frontage and so far whole stretch of shops has no vacancy. Hoping the market stays or improves. Thanks
nexona88
post Feb 13 2019, 09:21 AM

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All girls staying?
Huhuguh... Expect guys issues ๐Ÿ˜‘
I mean visitors ๐Ÿ˜

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