Books give lots of information that's non-debatable.
But how you use the knowledge in books is how you excel in life.
I see ppl condemning certain books saying that the strategy doesn't worked or whatsoever. However, they never really understand that one that works for a person might not really work out for the other.

Hi,

All comments are most appreciated. Thank you for the positive feedbacks. Indeed, risks are there when it comes to investment.

I've my way of managing my personal finance and risks. Different people has different ways and opinions of seeing one thing.

Like I said, I look it all as challenge whilst others look it as an obstacle or consequences

Cheers
Roger

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Added on July 19, 2007, 12:44 pmLet's not talk bout the methods of me buying the properties as my story is rather unique, extreme and a little uncomfortable for others.

The points that I've wanted to send across is "Property could be the choice of investment" (getting back to the forum title). Same like stock investment, you just need to manage your investment and personal finance well. That simple! No tricks.

Cheers
Roger

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Added on July 19, 2007, 12:45 pmI agreed ! It all boils down to the attitude of one!

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Added on July 19, 2007, 12:57 pmI need extra cash to do renovation

As for for my 2nd and 3rd property, I don't treat these two as my investment as it's a social obligation. I'll work my way out for the 4th property to have a +ve cashflow later on.

Already taken into consideration for margin of safety. Check my previous reply.

I don't intend to sell all at the moment as I'm still comfortable with my current financial status.
Even if I am forced to sell, I wont have any problem as 3 of my properties are in prime area and strategically located.

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Added on July 19, 2007, 1:00 pmI presume you haven't buy into any properties yet?

I've taken into consideration margin of safety when buying properties and I've enough buffer money to last me 6 months if things turn out bad

Like I've said, do your homework, plan your personal finance and manage your investment well.

Cheers
Roger

This post has been edited by wcwroger: Jul 19 2007, 01:00 PM

wcwroger, good if you've planned.
Just that by looking at your comments on your investment, everyone is like worrying for you; thus our comments and advice.
Good luck to you.

Thanks a mil

Appreciate everyone's concerns and feedbacks.

Will try to keep you guys updated on my latest progress when I've the time.

Best wishes,
Roger

My advice to those of you who have just started to earn an income, dont invest in property yet. Save up your money for raining days or to start a business should an opportunity arise. Earnings from rental is erratical and wont make you super rich. Property prices only goes up high in certain hot areas, whilst it remains stagnant in most areas depending on the state of the economy. Your present house may be cheap and increase anually but do you take inflation into account? You can afford to buy a RM100,000 house now but you can sell it for RM500,000. But the RM500k wont buy you an equivalent house then.

Earning a salary and buying several properties just dont make good investment plans. what happen if you lose your job or the property market crashes. Sell? who wants to buy then?

I have lived thru these vicious cycles before and see those property investors regretting.

I read through all the posts. I'll start with the above which is the most insecure IMHO.

1st of all, I salute wcwroger's adventurous & daring mentality, for investing so bravely (for his age & current income). He'll be very rich in the future assuming he faced no rough times & everything go smoothly as how he planned.

Ok, regarding his 1st property that most ppl think is most secured (since got a 15 year tenancy agreement with developer). It's actually the most insecure although it's legally binding at this stage. Anybody heard of Kolej Lagenda at Mantin N.S. ? A developer built a few blocks of apartments there aiming at the students there. The major selling point is, developer will rent the property from the purchaser for 3-5 years. Purchaser are guaranteed a return of 8% p.a. (based on purchase price) which will be used to pay off instalment. Sounds good right? Just need to pay downpayment & no need to pay instalment for the next 3-5 years & thereafter may receive a 8% or higher return.

1 year after the agreement was signed. The purchasers received a letter from the developer notifying them that the plan is cancelled. The developer will no longer rent the units from them. Fast forward to 6 months ago, a total of 60+ units of the said apartment was put up for auction. Venue at Staffield Golf Club just 3 km away.


I assume you bought the property through auction. So have you verified the real market value. Was the valuation done by a qualified independent valuer most recently?
If not, did you ever wonder why the previous owner disposed the said property at below market value. Not being passive here. As I'd mentioned b4 in this thread. To earn from property investment, one must have the power to HOLD.

I knew a couple (both teacher but not doing tuition for side income). They bought 7 properties (link house, flats & aparments) spread across Selangor & N.S. They did it just like how wcwroger did (through rental income). But they also did it through Govt loan as both are Govt servants. So they could secure up to 4 loans (2 fr Banks) at the same time. For bro Wcwroger, would you be able to secure more loans in the future? That's if your income increase steadily cos i don't think u'd want to declare the rental (subject to tax).


It's bad if one is under heavy debt at the toughest moment. But that's also the time where property is cheap & business opportunity opens up. When times are good, all the market share was taken up. At bad times, cash is KING. In other word, gain on other people's lose.

This post has been edited by scorgio: Jul 20 2007, 09:28 AM

wcwroger,
another thing i can think of is, 15yrs of FIXED rental income is oready making a loss coz rental shud hav increased over the years , in 15yrs, probably u shud be getting more by managing the property urself. on top of tht, 15yrs later, wat the developer pass back to u could be an extremely run down property which they / the past tenant would never bother to take care ( few years down the road ,rental is cheap relatively).

just my 2cents...

My respect for putting things into perspective.

WC, TY for sharing. You have a very gutsy approach.

This post has been edited by METALRAGE: Jul 22 2007, 10:52 PM

Ahhhh, but there is a way of realising the capital gain immediately without actually selling the house, should you need money. All you have to do is just go to the bank and get a loan with the house as collateral. Sure, you pay interest on the loan, but remember, the house is still yours! How to use the money, you think yourself.........

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Added on July 23, 2007, 12:41 amActually, banks do treat your rental income as part of your income to calculate loan egilibility! But you must make sure you report it as your extra income in your yearly income tax submission form.............

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Added on July 23, 2007, 1:21 amwcwroger,

I see you're trying to practise what the seminars and books tell you.

Allow me to be a bit critical of your 1st 3 properties. Your return on your 1st property in 7.2%/year. I am not sure what loan package you have, but i think it would be BLR+0.??%, meaning between 6.5-7.5%, no? 15years guaranteed return is good, but it should have been able to negotiate rental every 5years . You end up with a +ve cash flow of RM600/year. But how much do you have to fork out for quit rent, assessment, fire insurance & income tax?. I hope for your sake too, that the agreement with developer states that any repairs if bourne by tenant! Also, if your agreement if 15 years duration fixed, then it would be hard to sell your property as your only target are investors, and how many investors are keen on a property offering only 7.2%/year return?

As for your 2nd and 3rd property, they are not even for complete rental. Renting out rooms are ok....if you can live with strangers in your home, but I'm not sure if that's sustainable. Honestly, I hope there is capital appreciation for you in the end. If I were you, I will save like hell to pay off your non profit generating loans first and forget about buying another property at present.

Sorry for being harsh.
minolta

This post has been edited by Minolta: Jul 23 2007, 01:21 AM

@Minolta,
U've got a point but that wasn't exactly what i meant! *ggrrrrr*

Points taken.

Greatly appreciate everyone's opinions.

Actually, I would go slow from 2008 onwards, taking 2 to 3 years to improve my cashflow first before buying into my 4th property.

Cheers

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Added on July 26, 2007, 10:48 pmAgreed... nothing is certain... that's the risk we've to consider...

This post has been edited by wcwroger: Jul 26 2007, 10:48 PM

if u hav seriously considered the risk , a risk which most investors ( too bad, not many here) know, u wont hav do so, worse case, obviously, u aware of this risk n still go on with it, n it's a risk which is totally out of ur control..
all the best !

This is seriously gutsy move. My salary is higher than your previous year's salary but still no property.

care to give a latest update to your property acquisition?

wow... very daring indeed!

Lets not jump on his throat la... maybe he has enough cash reserve to see him through rocky periods?

Personally, I wouldn't have acquired that many properties in such a short span of time but to each their own.

There seems to be alot of speculation and uncertainty in your plan but so long as you have a secure backout plan then *shrugs* (Able to quickly sell off one or two properties in case of unforseen circumstances-hopefully at a nice profit) I am guessing you won't balk at the course you are taking now since you seem very confident.

I think one property acquired every 2-4 years is good if one can afford it and has carefully planned their lifeplan with consideration for worst case scenario (life is not a script which will follow our will as we wish after all). Then by the time they are close to retirement 3-5 properties which may ensure shelter and passive income. Again, each person's situation is vastly different and variables are aplenty so don't take it for granted that one can cash out easily or collect passive income at all times...

If you are able to profit from your endeavour then I applaud you but do be prepared for the worst... Optimism will only get you so far...

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Added on August 3, 2008, 10:08 amwhat if you lose your job if there is economic slowdown? Can really expect the salary rise rise rise (unless you are a govt servant?)

Personally i dont really agree with a fella who own few properties and thinks that he is earning big bucks already
You must be able to sell it at a reasonable price then only it is considered a good investment. If you just rent it out with a few tenants, i just wondering whether you can maintain with a tiny salary of RM3000-4000 with the possible increase in BLR (unless you get govt loan) and inflation.
Properties a type of investment, in some extent, is like share market. If the price drop tremendously, the bank can request you to pay a certain amount of money to them and you can suck big time.



This post has been edited by muscaa: Aug 3 2008, 10:10 AM

And you will continue to disagree until you own a few properties and start earning decent passive income. Ppl r often sceptical until they experience it themselves.

When you earn approx 2k monthly passive income (clean after minus all cost) and your investment capital has triple in just 3 years, you'll have a diff outlook





This post has been edited by Pai: Aug 3 2008, 12:32 PM

True true. If a person managed to reap rewards (in the case, properties being rented out and held on to) from their investments then naturally they will have a very positive outlook on it.

I think properties, well handled, can ensure a person is comfortable for life-but life is uncertain so don't see it as the be all end all. I feel those that believe that need to learn the meaning of 'asset allocation'.

That said, more than a few people rely on property investment as a passive stream of income and possible retirement fund after it is eventually sold. Some even hold on to properties as inheritance for the following generation. It is hard to deny that properties can create a person a lot of wealth so long as they don't bite off more than they can chew.

Hmm, interesting point here. Im personally not a big fan of asset allocation actually, due these 2 cons :

1. No time -In order for it to work ie getting good returns, should one plans to segregate their investment into 3 asset class, say property, shares and precious metals, they technically need to master all 3 asset class.

Since we only 24 hours a day, I'd rather concentrate my efforts to become really good at only 1 asset class. Better be a pro at one thing than become an average at many things.

2. Measly returns - Not only its time consuming, you could end up being an average investor for 3 asset class, and geting a mere 5%-6% returns p/a. My view is that one concentrate on maximising returns when they are still young, then explore asset allocation once they've accumulated a comfortable wealth level, say at RM3Mil.

Also, there no one I know got rich thru asset allocation. What do you all think?

Actually I do agree on those points with you. After all, some (if not most) of the richest people in the world make their fortune by mastering one asset class and specific skills. However, there are risks involved and I believe most of them had alot of patience to learn, perfect and master their skills and assets and had enough foresight to ensure they don't go completely under should unexpected events cause their investments to go 'under'.

But I cannot completely condone those that stretch all their money in either property, shares or precious metals. Admittedly, I am more of a medium risk investor though I am aware of the fact that higher risks will reap higher rewards. There must be enough room to buffer any investment and for me that would mean leaving part of my assets in cash (with sad FD returns but what to do? ). I am still learning a little more about shares though so eventually I hope to invest part of my assets there.

Property though still remains a form of investment I hope to master (as well as the rest of the people in this forum I guess) as it is least likely to cause me financial ruin as long as I manage it properly. By the time I retire, I hope to have 2-3 paid up properties which is able to provide passive income for me, 2-3 properties which I would be able to sell with nice capital gain for $$$ and my own live-in home. So that would be 5-7 properties by retirement which are completely paid up for. Very general goal that I have yet to micro-plan to achieve. LoL! Give me time. I will figure it out as I learn from all you gurus

As for the 3 mil mark... Would that be completely in cash or mix of assets that make up 3 mil like a few of properties worth 1.5mil, 0.5mil in cash and the rest in stocks;unit trust;etc?

If a person has 3mil in pure cash along with other assets then I think asset allocation is definitely in order With that much $ then a person really shouldn't put all of it in one investment. But that is just me. I am not so brave I would strive to ensure that the value of my assets (cash or otherwise) remain the same if not more by appreciating more than inflation and provide me with a reasonable income though.

Every person will have a unique plan to make their fortune. What works for one person may not work for another so I won't let myself fall into that trap or feel pressured into something I am uncomfortable with. I simply wish the best of luck to anyone brave enough to stretch themselves financially with one form of investment alone with no buffer.

[quote=shadowz,Aug 3 2008, 11:36 PM]


Property though still remains a form of investment I hope to master (as well as the rest of the people in this forum I guess) as it is least likely to cause me financial ruin as long as I manage it properly. By the time I retire, I hope to have 2-3 paid up properties which is able to provide passive income for me, 2-3 properties which I would be able to sell with nice capital gain for $$$ and my own live-in home. So that would be 5-7 properties by retirement which are completely paid up for. Very general goal that I have yet to micro-plan to achieve. LoL! Give me time. I will figure it out as I learn from all you gurus
[/quote]

Sounds like a good plan, at least for me

[quote=shadowz,Aug 3 2008, 11:36 PM][/quote]
As for the 3 mil mark... Would that be completely in cash or mix of assets that make up 3 mil like a few of properties worth 1.5mil, 0.5mil in cash and the rest in stocks;unit trust;etc?
[/quote]

3Mil of pure cash or in highly liquid investments bro.

[quote=shadowz,Aug 3 2008, 11:36 PM]
If a person has 3mil in pure cash along with other assets then I think asset allocation is definitely in order With that much $ then a person really shouldn't put all of it in one investment. But that is just me. I am not so brave I would strive to ensure that the value of my assets (cash or otherwise) remain the same if not more by appreciating more than inflation and provide me with a reasonable income though.
[/quote]

Agree. When u reach the 3Mil mark, capital preservation should rank highest (unless you plan to reach the bilionaire gang) and should be one's top priority. A 5% yield would already give a person 150k p/a pocket money


[quote=shadowz,Aug 3 2008, 11:36 PM]

Every person will have a unique plan to make their fortune. What works for one person may not work for another so I won't let myself fall into that trap or feel pressured into something I am uncomfortable with. I simply wish the best of luck to anyone brave enough to stretch themselves financially with one form of investment alone with no buffer.

[/quote]

Very true and I respect that each person has their own investment preference and risk appetite. What I dont like is those naysayers who cast doubt on every lad here by making negative remarks with no supporting proof. Im very sure that there's plenty of kids out there who come here looking for investment advise ended-up being a chicken due to this unfounded but "sounded-logic" remarks. they then ended up regretting their "chickenness" few years down the road when other ppl took their chances and made significant profit, be it properties or stocks or any other investments

Dont get me wrong, I dont plan to get everyone here to buy properties blindly.