I notice we don't have a proper property investment thread for property investment (yes, we have some topic discussed on particular projects...), so i m opening this thread for all property investers & investors-to-be to share all thoughts and queries (S&P, Loan, Review, Legal issue, developers , rental, strategy.....).

Good example of own experiences are welcome to share!!!

Friendly discussion is welcome , not flaming(erm, may be a little...) pls as we are all here to learn and there is not definite right answer for property investment , whatever strategy/method tht works is correct.

With here i attach some links to previous topics being discussed in LYN and some links to useful source of information on real estates , if there is any specific link tht u guys wanto include in 1st post pls PM me after u posted here.

Previous active discussion on Specific projects/topics, discussion can be continued here or in the topic itself : (will update more soon)

=>Setia Alam
=>Petaling Indah condo
=>Recommendation on Property for own use
=>Shoplot investment
=>Perdana apartment, Shah alam
=>Amansiara II, jalan ipoh
=>How do u make money fr property investment
=>Where do u think is good to invest?
=>Lake City condo phase II
=>Leasehold vs freehold
=>How does budget 2008 affect property sales?

Useful link for self study / property survey :

http://www.property.net.my/
http://www.hba.org.my/
Need a calculator?
http://www.iproperty.com.my/
http://www.realestate.net.my/
Facts about malaysia property...

we need ur sharing of info especially review on new projects coz one can't get to study all projects ...

This post has been edited by yewkhuay: Oct 27 2007, 12:58 AM

yewkhuay,

a suggestion, perhaps we'll be better off creating separate threads for each item like S&P, Loan, Review, Legal issue, developers , rental, strategy, etc.

That way all the relevant information on a particular subject will be cumulated under one thread, hence making it easier for anyone to look for them. My 2 cents

Good suggestion !!! tht's y i started to link other topics to this thread so that b4 someone open new topic to ask , they can check whether similiar topics had been discussed instead of opening new one, those topic which has only been discussed less than 2pages i will not link over here.

anyone can still open open topics related to their personal case / interest , i will link it over here if the discussion is active. Here will be the pool for all related and Generally on Property investment strategy discussion . would tht be ok?

I see, it does make sense.

Let me get the ball rolling here Im no expert but I strongly believe if anyone lurking here looking to buy their 1st property either for investment or own stay, here are some areas that I'd recommend if you can only afford below 200k and can only buy apartment or condo's :

1. Kota D
2. Sentul
3. KElana Jaya
4. Bukit Jalil
5. Puchong (IOI area)
6. Ampang

I recommend these 6 area due to the fact that these area posses strong fundamentals, and I personally like these areas.

Anyone has other suggestion?

Pai, from your 6, i would suggest Kota D, Kelana and Bukit Jalil.. Its more near to town area..

Actually, certain part of Ampang and Sentul is nearer to town, and I felt there are bigger upsides for Sentul. Good for long term investors, ie above 10 years timeframe

Just came back from a property seminar organized by The Edge magazine at Eastin hotel,


Points to consider in property investment from what was said at the seminar:

- Property market cycle has just started and should be very good for the next 5 years.

-Any Properties in a 5 mile radius of Petaling Jaya District should be good.

I'm going to play the devils advocate here and give a pessimist views on things.

I would only say it's speculation that property market would be good for the next 5 years.
Recently we saw a lot of developments especially in the recent 3 years. Why because our market just recovered and stabilised from the previous hit of recession in 97/98 and the big market downturn in 2000/2001. So it's correct that we're still at the young stage in property development.

But currently because of the young booming market; everyone is into properties thus the current uptrend in property price. Now the question is what would happen in the next 5 years? Maybe within this next 5 years the market is still blooming; but remember that oil price is also riding on the up trend surpassing USD90 per barrel on several occasion and is predicted by year end it would obviously be above USD90 per barrel permanently.
Not to mention we'll become net oil importer in 5 years time.

Thus what would the economy be after the 5 years period? Or are we suggesting that we ride on the trend for 5 years flipping properties to earn fullest returns for the next 5 years to sustain ourself for the next 10 years? Property prices are at all time high currently, so is it really wise to buy property for investment now? But obviously we're expecting it to grow further more. But how much can it grow since it's already at a high price? What's the peak before all tumbles down?

Another factor, is property price is going up at a very fast rate and predicted to grow even faster in the next couple of years; but is our increase in earnings able to keep up with this uprising trend?

Btw, to those that are not in the banking and finance line, you wouldn't believe how much the industry NPL had grown. I.e. lots and lots of ppl are getting into too much debt that they could not handle. That is why also the Government took the initiative to set up AKPK to help those type of ppl from the grasp of financial institutions. Us in this line is expecting US's sub prime crisis to hit us in another 2 years times at the rate of our rising NPLs. Taiwan took a hit 2 years back in year 2005 because financial institutions are offering too much credits to consumers out there; and M'sia market now are recently also aggressive in giving out loans which is also really not a good sign. To those who is able to manage, kudos! but to those who can't I wouldn't advice them getting into debts i.e. leveraging from financial institution in hope for a better return in properties.


Cheers!.........

1. Property market cycle started back in 2002, not now. In fact now we are at our highest peak. I disagree with this statement, as there's no fundamental evidence to support it.

2. Agree. What you should also point out is that anything within 5 mile radious to PJ usually doesnt come cheap. Btw, is puchong more than 5 mile radius of PJ?

---

Added on October 27, 2007, 10:05 pmTotally agree.

I honestly dont understand the correlation between oil price and property investment, apart from the rising cost of construction.

You are right, its rather risky to flip 1/2 million properties now. But for those into the rental game, I think there's further upside over the next few years, even if we go into recession.

Brilliant observation and totally agree with you. Hence why I dont suggest anyone to buy high end properties with the hope to flip.

I think this problem mainly caused by the debtors ingnorance in personal finance. Plus, I thought our NPL loan level are still very healthy, well it is still very healthy for most foreign banks. I know local banks are catching up, and I think most local banks have reduced their NPLs significantly over the past 2 years. Disagree that we'll have a similar problem to US subprime issue(our credit apppetite are still very far behind compared to US Banks).

Anyway, good write-up there. Its always good to hear & discuss diff views.

This post has been edited by Pai: Oct 27 2007, 10:06 PM

1. I mean the real boost for property has come in the form of RPG tax 0%, properties are underpriced(well compared to our neighbors), easy and cheaper to get loans and a few others that was discussed and presented at the seminar

2. When the are puchong is said, it can mean starting at kinrara up to dengkil
Not too sure but im staying at ss3, pj, and its nearer to bandar metro puchong then to 1 utama
But if you consider PJ state as the heart of PJ, and take the 5mile radius, Bandar metro puchong is in the radius

This post has been edited by bryanyeo87: Oct 28 2007, 02:56 AM

good thread here yewkhuay

I wish some experts can give more informations for absolute beginner like me to learn the general knowledge in property investment.

questions are such as-(property > p, investment > i)
1.why p.i?
2.who are suitable for p.i?
3.step by step guide in the process of buying p for i in Malaysia, from start to end.
4.things to consider when buying a p? is it really all about location location location only?
5.basic calculation of ROI.
6.basic p.i strategy.

thanks!

1. Property market depends on econmy situation, if economy will be robust in the next 5 years then demand for property will be good and vice versa. So need to look at the economy situation to determine. If said next 5 years will be good because of cycle without good reason backing then it is purely speculation.

There is some modest correlation between oil price, inflation which affected the property market.
If taking aside the demand issue due to economy, high oil price will mean push up the inflation in all channel, steel price goes up, cement price goes up as well as all other building materials mean that developers need to raise their price which generally make the market price higher.
But in the real world, it is much more complex, high oil price and inflation generally will mean higher interest rate imposed by central banks making loan more expensive and lesser demand on property. Also high inflation mean consumer has less ability to buy property also high oil price always associated will economy slow down -> less demand.

So it has 2 way to affect the property sector which one is on the upside, one is on the downside. So how it (oil price and inflation) willl affect the property market, you need to see which factor has the largest effect.

This post has been edited by cherroy: Oct 28 2007, 11:34 AM

very clear n precise explanation, learnt something today, thanks mate U r right, oil is the key driver for inflation. The last time we raise interest rates last year was bcoz of oil as well. Btw, whats your take on the FEDs next move? Cut, hike or mantain? It seems like they have no choice but to cut rates to spur back the US economy and to mantain Dow's performance, but now inflation is way up due to oil prices.

1 thing I'd like to point out though, our BNM has been very conservative in hiking up or lowering our rates. I think FEDs raised their interest rates like 17 times since 2004 to date, and we've raised ours only 3 times. Therefore, I still think that even with rising inflation (oil, toll etc) and our CPI is currently still below 3, BNM most likely wont hike up our rates anytime soon.





BAck to properties, unless oil prices drop big-time, new properties will always command higher prices due to higher cost of construction. Therefore, my advise to anyone shopping around for properties now, please buy completed, secondary market properties. If you must buy an undercon properties, make sure you buy from reputable, cash rich developers.

hmmm where would be a good place to invest in shoplots?
<-- noob here

The Fed might have another 0.25% cut in the bag as housing slump continue and financial market credit crunch issue is far from stable. But with inflation is still a threat, I don't think Fed will cut it too low unless economy run into recession. If they really cut it too low, then it will send the USD to more fresh low and if USD did drop non-stop, if would create more uncertainty in global market as most of the trade and asset held is in USD denomination.
But over long term, there are some arguement that you don't cure the problem at all at the root with the rate cut, you just delay it, as inflation might haunt later on. This issue still debatable, only time will tell.

Back to local issue, BNM has no choice at all, by right, wtih high inflation currently, BNM needs to hike the interest rate to cool down the demand, but current domestic demand is not so strong, they don't want to risk it as it mean economy will be easily put into break with the hike. They rather take the risk of inflation rather than causing economy to slow down. We just come out the the 1997 recession and recover, they don't want out economy back to slow mode again which might mean a lot of problem domestically. Also, there is massive liquidity in the local banking system which means klibor rate will stay at low end for the near time.
Also, the recent inflation is not because of domestic demand driven but the root of raw material which is much harder to tackle.

With high inflation is coming and raw materials price surging, it is a bit high risk to buy those under-con with less reputable developers. When the raw materials price outshooting their cost, project will have high chance of being delayed and abandoned especially those bad track record developers. Our law is simply not protective enough for the buyers.

This post has been edited by cherroy: Oct 28 2007, 04:28 PM

The government says there is no shortage of steel bars in the market, but why the heck is it at RM 300 a ton now, and that is IF the developer is able to buy them, and the industry is at its peak production, so who is hoarding them and controlling the price?

Bad track developer, ie : Talam?

cherroy,

My feeling is it will be a 0.50% cut next Wednesday from what I read so far. I guess we will know how good my guess is on Thursday.

Dreamer

If it is 0.5% then USD will be slaughter in the forex market.
Then oil price will probably shoot up again.
Foreigners holding US assets will feel the pain if USD keep on its bearish mood. US Dollar Index has dropping to fresh low recently, around 77.+ only.

Let see how it make up on Wednesday, Fed move is difficult to judged at the moment.

Cheers.

The thing about shop lots is always location. You need to front it at a location where it is full of ppl and ample space of parking. Anyway, by buying shoplots, you'll be mostly relying on rental income, so you need to survey the surroundings before buying to avoid buying a "dead" place.

interesting guess.

Exporters will curse but speculators will cheer. KLCI will break the 1400 barrier then.

Very interesting...
I would like to point out if property demand is low due to inflation, rental demand will be up which is good for investor.
Most investor keep thier property and not flip it.. as i know of

property for rental market is always there, depends on which group of tenants we r targetting.

investors will also need to hav sufficient cash flow to sustain the properties , tht's y now u see alot of seminar asking ppl to join the band for group investing , i havent attended any , has anyone attended ?

anyone investing in property heard of SUPEX?

yup, and I personally dont trust their "services".

SUPEX had a "not-so-good-reputation" in the online community for property investor such as http://realestate.net.my/forum/ and http://www.myrealestate.com.my/

anyone invested in office suites?

I did

Also, would like to know if anyone are interested in commercial properties, ie shop lots, offices, retail, etc.

No I'm not trying to sell anything to you, just want to gather a group of like-mind investor and learn together

which project u hav in mind now and what is the review about it ?

Just found out via The Sun.

Malaysian Property & Real Estate Listings

wow, free listing website......hopefully later won't start charging fees for priority posting featured....

I'm new to property investment, still learning, now mainly spend time to check around diff projects and ask all the sifus around.

Am looking at YTL's D7, UOB's Menara Bangsar UOB and Mah Sing's Southgate Commercial Center (not office lot, retail space only). Personally think these 3 look quite promising. Also monitoring how Solaris Dutamas perform until its VP, think this will give us some insight on the other projects.

You?

seems quite temptiong too. anywhere, can u pls provide more accurate information of the project stated above ? thanks.

Aeron, why use Solaris as base comparison?

a6meister,

you can go http://www.myrealestate.com.my/index.php for more info.

Pai,

not to use Solaris as base comparison, but to see how it goes. to get a feel of hows the trend of rental/price for office suite.

is it not the right way to do?

please share your opinion

Personally, I dun think the comparison would be accurate as all the commercial properties you r looking at are sold by diff developers, at diff timing, concept, location and price. Its like comparing apple with oranges.

For me, I'll only compare properties when the price, location and concept is similar. There's no guarantee it would be accurate this way but at least the variable is not too far off.

my 2 cents

Actually I bought a unit of D7, so watching closely the trend of office suite in KL area. From your point of view, which project is comparable to D7 that I should be watching?

thanks in advance

soory mate, I invest 100% in residential property only as of today, so I cant be much of a help in terms of commercial property. Plus there so many variable that would affect the commercial properties performance, such as the visibility, fronting, accessibility, nearby commercial areas etc.

As for D7, I like the facade very much (YTL is excellent when it comes to the "looks"), but SOHO concept is still rather new in Malaysia. The big plus about D7 IMO is the fact that there are practically zero new office supply within the Sentul vicinity. The big minus about D7 is that its an interesting concept but based in Sentul, so I have no idea what is the tenant demographics like and who would be willing to pay top dollar to rent an office there.

In the long run, commercial properties normally will outperform residential properties. If you have plenty of reserves in da' bank, then I think u'll be fine. Make sure you have enuff $$$$$ to sustain your D7 unit for at least 1 year, as finding tenants or buyers for commercial properties is bit tedious and dificult.

Current cost to build a medium to high rise apartment or condominium is currently rm150 per sq foot, excluding the land price.

So if you have a condominium/apartment priced at below or at about rm150 per sq foot, you sure are in for a price boom

sure boh? that expensive?

Sure lah, with steel bars now exceeding the ceiling price of rm2k per tonne due to shortage even when the government say there is " no shortage" and a "fixed ceiling price", it is traded and sold at about rm3k per tonne.

Apparently someone is hoarding them


Unless of course if the contractor "curi tulang" and give u less steel bars (basically means collapse hahahah) on your condo/apartment la

can anyone comment for a 30 year loan for housing? What is the average loan term for a 300K with 90% loan?

Comments welcomed...

based on the interest rate of 6% per annum for 30 years and loan amount is RM300k.
Monthly installment is RM1,798.65
Total paid for 30 years is RM647,514.57
So total interest paid is RM347,514.57

You guys sure know a lot about property investment. It is quite interesting to read about all the comments you have been making.

After reading it, I was juts thinking about whether there are property investment companies or clubs that gets many investors who has a small sum of money and use it to buy properties. I have been looking for something like that as I don't have such a huge fund to go invest in prime properties.

An example is where 10 people invest RM40k and use it to flip a house which cost about RM400k. This can be bought and sold in a period of 1 year.

Anyone who has an idea about this, please share.

They are companies out there doing that. I.e. gather investor to invest a certain sum to invest.
Anyway, if you want to do it on your own I would suggest start with family. Because there would be problem in trust. Especially with money. At the time of buying, you need to list down the owner's name. whose name to put?!....No way you're putting down 10 names...
At the point you think it's ripe to sell; what is the determined price to let go? would there be any vote on that? what if 5 thinks they want to gamble by waiting for another 6 months and 5 wants to sell now?!....

See the complication now?
Unless you want to draft out legal papers and guides to get things on the way. But than, your investment cost would go up with all these efforts. Thus I don't think it's advisable. For RM400k property, you could still secure it with loans. It's known as leveraging. You ensure low cash out in securing the property to gain maximum gain when you sell say a year later.

bOOn, thanks for your prompt and kind reply. Actually my problem with getting family members is finding someone to manage the properties. I want to take the managing part of this out of the picture to save a lot of hassle.

It is good to hear that there are companies out there who does such things. I am very interested in the companies who can manage this thing well. If you can suggest some companies which you have experience in or know someone who had good dealings with them, I would really appreciate it.

anyone here try for auctiondata.com before?it asking for Rm365 joining fee...dunno it worth it for 365...

You probably meant http://www.auctiondata.com.my

This post has been edited by joe_mamak: May 7 2008, 11:46 PM

SUPEX MORTGAGE IS NOT A SOLUTION FOR FLEXI LOAN FOR SURE!!!

I would like to remind everyone here. For those who is using Term Loan, SUPEX might help.

I'm using SC Mortgage1 loan. So far the only bad point about flexi loan is Higher INTEREST!!! BLR + XX.

For my case, there is no concern since in interest is more than 4%, my company will subsidise the rest of all. If BLR=8%, my company will pay 50% of interest charged for me.

However, 1 simple question which SUPEX MORTGAGE consultant all can't answer here is:

1. If my monthly installment is RM1k and I pay RM2k every month to my account (assume BLR is fix), how long I can finish my payment? If you use a normal loan calculator, a double payment of your required payment will indeed reduce your years to half!

2. If SC Consolidated Statement is a +ve value, will there by any interest charged?

3. Flexi Loan is just like a Overdraft account, if you take out extra payment, OF COURSE YOU WILL BE CHARGED INTEREST! Where got FREE OVERDRAFT in this world? So if put in Extra $, that's it...... If you take out, REMEMBER, INTEREST RATE IS BLR ( Still cheaper than Credit card for those CARD SLAVE).

4. Flexi Loan calculate based on your -VE value. Which means how much you owe the bank at the current Month(or DAY), of course how much interest you are charged. Simple mathematic, I'm not sure why people doesn't make sense about it.

5. If your account is a +ve Value, you can terminate the account anytime (More than 5 years no penalty). So once you terminate the account, of course your loan finish. Because you already END THE FACILITY.

6. Normally SUPEX member pandai. They ask you to request an "EARLY SETTLEMENT STATEMENT". Early settlement will always follow the calculation of TERM LOAN. Hence your EXTRA PREPAYMENT will not be calculated. HOWEVER, they will return you the $. Beware, EARLY SETTLEMENT and +VE account in your Condolidated STATEMENT is different. EARLY SETTLEMENT is something you wanna do with Refinancing or EPF. Positive Consolidated Statement means if you have a CASH youself and debit into the account, and at the end BANK OWE you $ not you owe Bank $ anymore.

7. My advise here is, don't simply do any Refinancing unless you get a very good interest (FIX INTEREST, maybe 4%) for the whole loan TERM.