Investment Apartment for Sale at Shah Alam Sec 13

Perdana Apartment
Lease hold till 2103, Next to Giant, Stadium, Politeknik and University ( no problem getting tenant )
3 Room 2 Bath, 853sf

Currently rental RM900.00, Maintanance + Sinking Fund RM105.00

Selling Price RM145,000.00

If you pay cash, then your return is :

Gross Return RM900 x 12 / RM145,000.00 = 7.5%

Net Return RM800 x 12 / RM145,000.00 = 6.6 %




If You pay 20% cash and 80% loan, your investment is RM29,000.00

Let say take 15 years loan, your installment is roughly = rental. That means no cash outflow.

15 Years later, the house fully pay off and the value may be RM180,000.00

RM29,000 investment and become RM180,000.00 15 years later = about 14% per annum.

Interested please call me at 019-325 3248, Kent.

your net return should be lower, after deducting other expenses like quit rent, agent fee's etc.

also, your 14% return should be a lot higher, if assuming this property is rented out over 15 years.

Thanks for the correction.

Quit rent is about RM430 a year. So far I don't need agent in this apartment because the tenancy just keep continue since i bought the unit 4 years ago.

Another simple calculation is using RM900 x 10 / RM145,000.00 = 6.2%.

This unit is good for someone who want to start property investment.

This is a corner unit where all the room has windows facing outside, where the intermediate unit will have only the master bedroom facing outside where the other 2 rooms facing the air well. Air ventilation is bad, that is why i got the advantage over others unit.

Today Star classified, another unit selling for RM150,000.00.

Call me at 019-325 3248 if you or your friend is interested.

regards
Kent

why you selling it if it's so good for investment?

wat kinda non-sense is this?

People will have emergency times that they need to liquidate their assets for cash..
We shouldn't doubt people like that..
It's just like asking "Why developers sell their houses if they're really good for investment"..

PS: I might be interested in the building though..
But I need some help with property investment..
Been playing only shares/UT/business, but not property investment..

its ok.

I have been doing property investment 4 years ago and i have few apartment and condo.

After gaining all the experinces for the past 4 years, I am moving to commercial property.

So, I need money. Thats all.

regards

cool.

any particular reason why want to switch your portfollio to commercial properties as the properties comes with higher risk??

Yup, Commercial property comes with higher risk and off course higher gain.

I am ready for higher risk portfolio now after a few years experience in property investment.

Don' take my words, do your own study. Visit the place a few time day and night time especially at night when they turn on the light then you will know what is the occupancy rate. Visit the management office and talk to the staff also the security guard, you will have a lot of information from them.

regards

6.2% return is not entirely true.

Lets approximate figures for easier calculation: -

Lets say rental is RM1000/month, net rental/year is RM12000.
minus RM100/month for maintenance(assuming this includes sinking fund)
minus RM400/year for assessment
minus RM50/year for quit rent
minus RM50/year for fire insurance

=left RM10300

Lets say apartment price RM150000(approx value for easier calculation)
Lets say buyer pay 20% downpayment (RM30000)
Then borrows 80%, RM120000

BLR now 6.75% means pay bank interest alone RM8100/year

RM10300 - RM8100 equals RM2200/year gross profit

Now if you base your returns on total cash invested, its RM2200/RM30000 X 100 = 7.33%/year
But if you base your returns on property price, its RM2200/RM150000 X 100 = 1.47%/year

Then consider lawyer's fees for S&P ~ RM1000

And repair/general maintenance of property. If rented to students, who tend to sublet, then the general maintenance of property needs heavier consideration.


Kindly correct me if my calculations are wrong.

i m not gonna comment on rental return % part, coz no point explaining here when it has been discussed in other thread...from the 1st post, the return is not so true and even if it is true , it is low...

just look at the lease hold part, most likely the apartment is not gonna appreciate much in value especially when it is not in prime area ( i m not sure about tht area..., don't quote me.), have to really look at tht area , what type of tenants/residences , then u can roughly tell how this property can fetch in 15yrs time...

IMO, commercial property is a good invetsment vehicle, PROVIDED one invest in a decent area + need to have enough $$$ to hold it for a minimum 5 years as it is extremely illiquid.

In terms of gross yield, developers unit can easily get at least 10% gross yield upon completion and 20% capital gains, provided its in a decent location.

Wah Kent, u really got plenty of $$$$$, as any decent shophouse today costs nothing less than 1mil. Mind sharing with us your story ahh?

Side track a bit, 853sf in Shah Alam can get 900/month rental? As I am not familar with apartment rental in that area.

But your calculation is a bit too simplied as some issues/figure are not included as other forumers pointed out. Mind to elaborate more about details.

This post has been edited by cherroy: Sep 29 2007, 11:23 AM

When we start out investment, we need to look at how much capital you have, then you can iron out what kind property you afford to buy. Off course I prefer Mont Kiara where you return could be even 10%.

So how much you have in your pocket now determine your portfolio.

My calculation is very simple. I pay down payment and let tenant pay the rest, i don't care about the how much bank charge me about the interest, because I am not paying for it. The basic point is the rental is able to cover the installment and misc fees. And that is all you need to calculate your return.

If you get shorter loan, then you may need to fork out abit, like RM100.00 a month. So consider saving RM100 per month lar..

150K today and becoming RM180K 15 years later, I guess this is very reserve calculation, I don't call this capital appreciation, I call this inflation. If you are looking at capital appreciation, go for landed property, please prepare to fork out more for monthly installment because the rental yield is low.

When you rental your property to student, make sure you just provide a basic house and make an agreement that they will pay the bill less then RM80.00.

There are risk in all investment, property also carry risk. BUT we are looking at calculated risk.

---

Added on October 1, 2007, 9:55 amHi Pai, there are shop lot sell by strata title and the price will be much lower. I will prefer those strata title unit.

Property Investment opportunity does not come everyday, you need to be patient and do a lot of study.

Most importantly, you need to save and have your capital ready when the oportunity is there.

This post has been edited by kentng: Oct 1 2007, 09:55 AM

a very shrewd calculation indeed!! (i like the way you scrutinize the cost of ownership.. just like the way i do it)
what you revealed here may hurt the seller.. (this property can't even pass the 10-month-rental profit model... collect 10 months and make an annual profit for it)

80% down at 6.75 for almost 35 years (near max period).. you're prudence in your calculation model.

guys.. this is a sample of a due-dilligence process.. this is just the calculation part. and it has not come to site-visit, transacted price of similiar units, demographic makeup of the neighbourhood.. and the more important issue.. who'd be your targetted tenant here?!

at every picking up of any investment.. a good practice is to have an exit strategy at hand..
all else being equal, when the criterias to exit are met.. you bow out in grace and move on..

good or not.. it's for the next buyer to determine.

an average of RM300/room.. it does make sense
he has a premium on convenience.. that's his selling point/advantage.

talked like as though you're already into property investment.. cliche talk.
a shrew investor don't always rely on developers' unit (you keep on thinking like a consumer)..
a lot of good investments are made.. way after they're built by developers.. meaning, it's combed/hunted via the secondary market..

i hope you can dig this.

i like commercial properties too..
are you acquiring it as an individual or you're parking it under a company?
(you're aware that the tax laws have changed and it is not in favor to an individual, right?)

dude,

cliche as it may sound, it remains true, and I believe there are many forumers here who are unaware of this fact. Im stating and sharing a general fact here. Should you disagree, come out with some facts that shows otherwise, share with us here, and then we can discuss this further. Plus, if I remember correctly, even you bought your unit from the developer, albeit on a slightly diff circumstances, right?

U do know that an average flipper would make at least 30% COCR p/a upon selling the completed property, right? The caveat here is NOT to buy ridiculously priced developments with very minimal upside in a low demand location.

yup, there are plenty bargains out there in the 2'dary market, and this actually goes without saying. Btw, congratulations on your property's COCR, 11.8% is way above average, although I've seen and experience better

This post has been edited by Pai: Oct 2 2007, 11:06 PM