Hi, really sick of renting house! Wana buy house ASAP !

Do u think this is an good investment?
and am I afford to buy it?
Really lack of experience in buying property.Appreciate if anyone could help me out, see what have I lack of or what i have missed. Million Thanks.

Property:
Price of the Property: RM165000
Terms of Loan (yrs): 30
Interest Rate :5.99 %
Down Payment : RM16500
Monthly Payment:RM889
Rental: RM1000-1200
Maintenance: RM100-120
Type: Apartment, lease hold (now I believe is ald 25+-years old)
Condition: Old, near LRT, quite low class and messy.. but i think many ppl will willing to rent because is near to LRT and shopping complex, near city center

Personal Finance:
Salary:RM3000 (able to save RM1200 - RM1500 every month)
EPF: RM 10000
Savings: RM12000

Interest rate 5.99%?
I guess it is those fixed rate by AIA?

Anyway, the monthly installment is RM900
Your salary is RM3000.

RM900/3000 = 30%
If you do not have other commitments, i believe you should be able to get your loan approved easily.

1st of all u need to get a credit card for 3 months if u dont have other commitment coz they need it for ur credit evaluation CRISS.

Is a good investment as house price tends to appreciate(in most case) compare to car which is a definite depreciation

With a house u think u can rent out some rooms to cover ur rent if it is too taxing

if u r interested in getting housing loan kindly contact me as i provide below the market rate loan

Actually, Im not sure whats the lowest rate right now...just simply calculate from iproperty calculator. so whats the best rate in town?

VpowerZone, thanks for your prompt.

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Added on August 17, 2008, 12:56 amHi ed0gawa,
What I concern is ....is it worth to buy a 20+ apartment for investment?

and with my financial right now, targeting RM165k - RM220K property.. is it a wise move? or I need to wait until my salary increase (of cos with EPF) ?

I got no commitment at this moment. Im 26 years old.

This post has been edited by kanasai88: Aug 17 2008, 12:56 AM

As a financial adviser (not qualified yet in msia)

U should aim upgrowing towns for a better house compare to old 2nd hand house. And with ur savings capability i advice you to go for more exp house reason being

When u r saving ur $$ in bank basically u r losing money bit by bit, even though you are earning FD type of interest u r still losing money as inflation of msia is recorded on average of 6-7% p.a. and for this quarter in msia is it reported at 7% already. As inflation eats up the VALUE of the amount of your SAVINGS and INTEREST is to soften ur depreciation of ur value for your money.

Why target new house instead of 2nd hand house?
New house sold by developer are generally in its basic price and it will normally appreciate due to real estate agents and property investment going in. Where else the price of 2nd hand house are normally being mark-up to up-to-date market value of the house or worst be mark up by ridiculous real estate agents(if u r buying from them most likely this will happen)

Things to look at for a good house that will appreciate
1. Surrounding infrastructure (roads, commercial areas, school, hospitals, police stations, petrol, the condition of the utility surrounding the area.
2. People (surrounding houses are low cost or medium cost or luxury bunglow, security and ur neighborhood basically)
3. Price (survey the median price for the property similar to yours)
4. Developer (if possible buy from prominent developer e.g Sime Darby, IOI, PKNS) as their property sell like hot cakes most of the time (due to strategic planning) which also means ur property will appreciate and fetch good rental returns

Some tips of uprising property price (AGGRESIVE)

Shah Alam (sek 7) Bandar Seri Permaisuri Puchong, Kota Damansara

Ur MOR (margin of repayment or repayment capability) can easily get a 250k loan approved

I would suggest u wait for another bonus before buying a house as there are many hidden costs will incur

e.g. Lawyer fee, renovation, furniture, stamping which will cost up to 10k (depending on the price of ur property) normally it is around there

NOTE: Things to look out for when getting loan.

When u plan to get a housing loan (given u r going to hold the house for 5 or more years) opt for those that provide FREE LAWYER FEE (normally they will tell u ZEC (zero entry cost) or FMC (free moving cost)) When they offer u such MAKE SURE THAT IT IS PAID BY THE BANK OR FINANCIAL INSTITUTION AND NOT ABSORBED INTO UR LOAN AS IF IT IS ABSORB U HAVE TO PAY INTEREST FOR THAT AS WELL WHICH CAN COST A BOMB!!!

please pay attention to abovementioned note

if they give u bullshyt about no1 pay for the lawyer fee go for other bank/financial institution

It is true that with his income, he should be able to get a loan for a 250k property.
But that is subjective too ..... if he doesn't have any credit record, or a job that are seen as 'unskilled/unstable/unprofessional' by those kolot credit reviewer.. then it might pose some problem.

Well, also on your point of having the legal fees absorbed in the loan, it might be good and bad.
Let's say the bank offer you -1.85% ZEC package VS a -2.2% NZEC package but allows you to add in the legal fee to the loan. It turns out the -2.2% package monthly installment is lower than the -1.8% package.


@ kanasai88

Older property might have a better location compared with new projects.
Like in Johor Bahru (erm yeah, i am based in JB .. so i don't know much bout other states). All the new projects now are located quite far from the town area. Lands nearby are all taken up and developed. The price of a 'old property' near town might be the same price as those that are further away from town but are 'sparkling' new.

It goes back to what you want actually. A house near town which is convenient for you? Or a new property further a little ....
So is it worth it?
Personal preferences actually..

Personally i like non landed property (condo/apartment) and i don't care if it is leasehold or freehold ... but people around me keep asking me ' WHY ? WHY WHY? ' . Just personal preferences lo ....

yes, I got credit card already. it is still a good investment if the house already 20-30 years old? but the location is very good la.. near LRT

Kanasai, mind sharing with us where is this place?

Was in the same situation as you when I looked for my 1st property(was looking for a < 180k property) almost 3 years ago, perhaps I could share with you what I knew.

hi donki85,

Thanks for your generous advise.
I wish to buy new house (landed better) but with my earning power and cash on hand, I only able to buy an 200k+- apartment. Im working in center of city. If buying a house with my current cash on hand, I only can buy house located far from the place i work i.e shah alam, puchong ( I do not have transport, travel by LRT to work).

Yeah, it is true that there are many hidden cost. Ill take note of that.

Loan:
normally whats the procedure applying loan? pay deposit to owner--> apply loan --> or apply load--> pay deposit?

Really appreciate if anyone can enlighten me, noob noob here..

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Added on August 17, 2008, 10:42 amHi Pai, of cos.

The place is near University LRT station



This post has been edited by kanasai88: Aug 17 2008, 10:46 AM

buying for own use or rental/investment?
If own use, the place you mentioned (University station) may not be a great place to stay. The LRT is very convenient anyway.
The units nearby that area ?vista is very old. But cant complain much as the price is cheap (160k+)

Yes, is vista !

ok, my plan is like this... Ill buy a unit in vista to stay + rent out (since im single, my rental now is RM1150). Will consider another units when plan to marry (wont be in Vista, the environment...err...sucks).

I can see UOA is building bangsar south here, and trying to make the environment better ( bustop, road side....), but another concern is when UOA "built" the bangsar south, Vista will become depreciated?

This post has been edited by kanasai88: Aug 17 2008, 12:13 PM

i think i know which ad you saw. but is it for your own stay or for investment? from the headline you sound like you're buying to stay but there are mentions of rental, so i'm a little bit confused.

personally for me, vista angkasa is not a good place for own stay, have you visited any units there? if you getting it for investment purposes i think you'll more likely attract students rather than families, but that's your choice if you want to choose your tenants.

btw, 5.99% should be AIA, good if you're looking for fixed rate whole tenure. i think alliance bank offers a better deal, but your preference matters most really. since you're browsing iproperty already, which don't you search for it and compare?

Hi livingmonolith,

Actually im renting a house in Vista now (RM1150)
what in my mind is, is better to own a unit rather than rent from people with this kind of rental.

My plan is buy a unit, own stay and also rent room to people. and this is what i do now, rent a whole unit, then rent other rooms to people so that i can cover some.

Do u think a 20-30years old unit worth RM165k?

I have compare the price around...is almost around that price, depend on which block. What loan are you suggest? Im using 5.99% because i wan to estimate more instead of estimate min.

This post has been edited by kanasai88: Aug 17 2008, 12:28 PM

Depends on the apartment's condition. It is a good buy if it's well maintained. Usually properties near LRT amenities will have good rental and they usually have a better price tag when it comes to selling.

Based on your financial condition, I think you should be able to support. Don't forget to take the hidden cost, maintenance fees, etc into account.

All the best to you!

Hi agape_ian

say the apartment already 30 years old. after 69 years, it wont belong to be?

or say like this, year by year, my property will depreciate because is lease hold?

Once the lease expires, the land reverts to the state. The owner will then have to apply for a renewal of the lease.

About depreciation, because it's lease hold doesnt mean the property actual market value will drop.

Hi VpowerZone,

we can apply to renew the ownership? how if Im dead and leave the property to my son, can he apply ? Since the property is won by him already..

mm...then y should have lease and freehold? since its renewable...
sorry...maybe got other reason i duno.

Bro, seriously think u shouldnt go for this Vista, its just teribly mantained and price will hardly appreciate given its current condition and management office. Suggest you topup a bit and go for Panorama studios(rent is RM1.1k-1.5k) OR the 3bed hillpark instead. At least these are condo's with decent facilities, security and most important, future capital gains potential.

Good luck hunting

Hi Pai,
Actually one of the reason I choose Vista is because my own self too. I do not have transport to work, i need to rely on LRT. But erm, is not an bad option too choosing Panorama & Hillpark.
How does the pricing look like for 3 bed rooms in panorama? rental ?

Hill park is quite far for me, unless I buy a car first. but but but ... if I buy car...sure will delay my plan to buy house.

Am I too rush? I really sick of renting people's house any more.

my advice is , don't buy a property just bcoz u wanto get rid of renting house. by renting , u get to stay in a house cheaper than instalment , free of debt , can change house every yr if u wanto, no need to worry about BLR fluctuation, least worry about monthly maintenance fee if any and tenants problem. there are also alot of fees involved like fire insurance n assessment.

looka at the money u r paying for legal fees n S&P n bank interest , this amount of money can probably pay ur 2-3yr rental for room, allowing u to save enuf to buy a house for ur permanent stay in 3yrs time.

btw, i m still renting a landed house worth 600K while paying rental of rm230 for my own room, at the same time receiving rental from the apartment i rented out.

Hi YewKhuay,

Is first house important? I mean it will delay your plan to buy second house if not careful? ermm...i think no matter how, I still need to buy my own house. But er... is it a good time (i mean with my financial, condition & market)?

How's my plan look like? Buy an apartment some where else, rent out (around RM100-200 profit), then I rent a small room for ownself at vista (cos I still need stick to LRT)?

Sorry ya..youngster always rush rush...

erm, there is no best timing to buy a house, get ur intention clear : y u wanto buy a property? investment or self stay ? for investment purpose , u can find out how n where n which to buy for make ur money work for u. for permanent stay, u wanto get a nice one at good location , which at the moment, might not be possible.

U might also wanto consider, u r able to save 1200-1500/m now, wat other options do u have to make sure these money grow so tht ur goal to get a good place for own stay will come true asap. and u also wanto consider , even though u can afford the apartment now, IF anything happen to u, do u have a reserve fund of 6-12months tht support ur expenses n instalment. if u havent got a car, is buying a car in ur 3-5yrs plan ?

About ur plan, looking at the property tittle n age, i won't buy, even at 120K. if u wanto buy for investment , when is ur exit ?

I might give u too much considerations to think, but if u choose tht u wanto buy tht property , i will also support u by coaching u how to work towards tht goal.

Buying house just because sick of rent? You've gotta re-evaluate your words.

Buy house needs downpayment. You have the $$?

After buy house, maybe you need to wait for construction. Even if you buy completed property, you wait for transfer. You have the time?

Rent out rooms earn some $$. How long it take for you to earn back your dp?

Salary - housing loan = balance. Enough?

You might want to ask the management to apply a renewal for the lease since they have 69years to go. Check with the management office before buying. I think it will cost a couple hundreds for ringgit for the renewal. Not so sure myself. You better check.

I don't think the property will depreciate alot because it is leasehold. Many properties in Mutiara Damansara are leasehold but they are appreciating alot. But 1 thing for sure is Freehold property can sell higher and easier.

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Added on August 18, 2008, 1:49 pmIf the management is bad, I suggest you to look for other options. Pai was right.

This post has been edited by agape_ian: Aug 18 2008, 01:49 PM

Is your office nearby vista? If you dont have vehicle and your salary can afford the home loan then i should say vista is a good buy.

Hi Sifu ,
Thats why I love LYN, many sifus here.

My intention is clear. I want it as investment, probably around PJ/KL near LRT. I think will look at Pai's list in another thread. Plan to have another house after I have my own family (targeting 5 years), worst case stay in the first property that Im hunting now.

I know with such income, is kinda hard to have a house. But I think if I rent out, it should able to cover back (if not, partially). You are right, I might lacking of backup now. Targeting 3 months backup now. For car, I think is should be in these 2 years too, due to nature of my job is required travel. I know is a lil risky at the same time buying both house and car, but i think ... however first step must start somewhere else, right? maybe this is a naive thinking, if sifus around got any comment, please enlighten me.

Thank you yewkhuay for open my mind.

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Added on August 18, 2008, 8:14 pm
You got your point, seems like you are planing to rent a house forever. Well, individual preference.

I wish to have my own house, just the time matter. and I have the time, time can arrange one ma...

Salary - housing loan = balance. Enough? I think change a lil bit lifestyle should b enough.

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Added on August 18, 2008, 8:20 pmHi agape_ian,

let say the the lease period only left 5 years, would the pricing of the property going down crazy compare to price when I bought? I believe more or less will be affected rite?

better look for freehold...but not easy to get leh with this kind of budget and requirement... unless got ghost..haha

But still will survey around, if required, I might top up a lil bit.

Yeah, Pai was right, the management there....not that bad, is REALLY x 999 bad. 2 Lifts, can spoil 1, for several months (reason: not enough fund to repair it) And I know may tenant refuse to pay the maintenance fees as they never improve the surrounding over there i.e. new paint or whatever....

BUT yet, there are still many peoples, are willing to stay there, as it's really convenience to workers or students (near LRT, Midvalley, UM, TARC).

I got another option, which is University tower, anyone know bout that area?

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Added on August 18, 2008, 8:27 pmHi Muscaa,
My office can access by LRT, but I think I wont stay in the same office for long. Moreover, my job nature requires me to travel. Im in IT. So, car is my second priority.

This post has been edited by kanasai88: Aug 18 2008, 08:27 PM

Actually if you want to invest, there are still many condos around which are freehold and within your budget such as in sg long and USJ 19. If you want near by LRT then Crimson Condo in kelana jaya is not a bad choice either.

I personally don't stay in those condos so i not able to provide you feedback regarding the condo's management and environment. Perhaps you can do some research if you are interested.

Hi VpowerZone,

I did some research around kelana also. But Crimson not really near LRT right? Is the terminal if im not mistaken. Will try to work on it harder ..

Hi Cutegurl,

Yah, it's on the NZX side..but with 5 mins drive to kelana lrt station..it's still consider near right?

1st of all, i m not sifu, i m just happen to have a lil more experience than u in buying property.

Here is the thing u have to do , REGARDLESS which property u target now as an investment, and ur mind is clear tht it is an investment, U DO NOT take rental tht only partially cover the loan instalment, tht is called subsidizing tenants to stay ur place while taking risk on ur finance. ur money could serve u better in FD / UT.

and , 3months reserve is not enuf, targetting a reserve is a NO, reserve of min 6months is a MUST. b4 u have this, forget about any investment, u r risking ur LIFE.

DO some maths here shall we ? say u earn 3K now and u get a property tht cost u monthly instalment of 1200 inclusive of maintanence fee, u cannot get a car loan with ur current financial standing in 2yrs. even if u managed to rent ur unit out to cover ur instalment, u still need to save up d/payment for ur car in 2yrs, Notice how ur money leave ur account into ur house d/payment and legal fees, u have 3months reserve as u TARGET, then u have to save 2yrs for car d/payment.

then like u say having ur family in 5yrs time with another new place (probably a better n more expensive) , take out ur 2yrs saved for car d/payment, u have now another 3yrs to work on this new house n new family. It is possible, the question here is : How much do u need to save in the next 5yrs ? How much ur income should catch up to make sure ur savings are always enuf for the every 2-3yrs big spending? What kinda life u will be living for the next 5yrs to have ur targets achieved?

If u don't have any answer for the questions or u have answers tht u don't like to face, u might wanto reconsider ur plan or work out another plan.

the investment tht u r talking here is big n low liquidity, u might wanto find out wat other investment tht can actually gives u similiar return but lower risk n higher flexibility yet manageable.

This post has been edited by yewkhuay: Aug 19 2008, 02:05 AM

I'm giving my point. You're making assumption on me. Do you want me to list out the number of properties I have in hand? Becareful of the things you say if you're asking for advice.

sui teng sannn and tell them about the snakes!

well, before buy property, you need to ask yourself if you have enough funds. having insufficient money in the long run happens alot. there's a reason why "bank lelong" exists.

I got a list? DOnt remember producing one, can pass me the link?


Kanasai, give Kelana Puteri condo at Kelana Jaya a look. It fits your budget coz u could get a 3bed condo for circa 170k, ROI is decent (7% - 9%), plenty of tenants supply, and its got condo facilities. I personally love the location and the price. If u r looking for min 5 years investment horizon, think u cant go wrong on this one.

FYI, Im vested, so pardon my biassed opinion. But I do put my money where my mouth is, so its not a blind recommendation. Good luck

I am quite agree with yewkhuay (Monster) ... haha ... actually kanasai, monster got his point ...

Calm down ... Calm down ...

lol
feel the heat ... faster say sorry .... haha
Please forgive him lar ... I dont think he meant anything there ....

kind reminder, profanity are strictly prohibited here, Sir.

(runs and hide)

calm down calm down ... lol
"Kanasai" is the nick name for the TS ... hahahaa ... he is kanasai88 ... so in short we just call him "kanasai"

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Added on August 19, 2008, 4:34 pmbut thats his name wor................


*brings out the popcorn*

This post has been edited by Pai: Aug 19 2008, 04:34 PM

By the time the lease period left 5 years, I think you no longer stay in that property, or sold the property, or extended the lease period. I would suggest you to buy Freehold property if you dislike leasehold.

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Added on August 20, 2008, 9:32 amTraffic is congested in that area. I think they have flood problems as well. Not very sure either.

This post has been edited by agape_ian: Aug 20 2008, 09:32 AM

map san My snakes are doing fine here, don't worry, I will not release it to kanasai

Basically most youngster rush rush wanna buy a house coz dun wanna pay rent. That was my thinking in the earlier days (why pay rent for something that doesn't belong to you?) which landed me into a big financial crisis.

Luckily now, I'm out of it and it started to generate income. Although there's income from rent, but owner always bear risk because the loan is under the owner's name, not tenant.

I feel that being sick of rent room & taught of buying own properties. But due to current market in yoyo graph, is better to be conservative & not rush into buying properties which tight your financial.

eh sifu, cerita lah sikit in detail so that we could all learn

Hai, Suiteng, still angry meh ...

share your experience with freshie like me la..

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Added on August 20, 2008, 7:37 pmI second that !

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Added on August 20, 2008, 7:39 pmeh ! where is all my reply ? all gone...

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Added on August 20, 2008, 7:42 pm

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Added on August 20, 2008, 7:45 pmHi suiteng

eh, dun la like that, I really mean nothing here. I do have some friends who feel that renting room for the rest of his life is better than buying a house and i respect them, is their preference ma.

I really not mean to hurt u sorry sorry.


This post has been edited by kanasai88: Aug 20 2008, 07:45 PM

I sympathise, as I was in your situation once. But you don't have enough RM to buy a house-lah. Assuming you get 90% margin of finance (and that's a big IF ... if I'm not mistaken, AIA/ING offers 80% or 85% MOF only), you need to fork out RM16,500. Don't forget about S&P legal fees, which should be around RM4k+. And what about furnishing and other misc expenses?

And there's valuation. Valuers are not always logical ... what if he values your house at only RM150k?

If you proceed to buy a house now, you risk losing your deposit.

This post has been edited by Spartacus 2.0: Aug 20 2008, 07:49 PM

yeah yeah.. let ur snake out.


fund ar... just ngam ngam only, and sifus here are right.. I need some bullets first. But anyhow, I will keep hunting start from now.


er...why my previous reply all gone ar?

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Added on August 20, 2008, 7:50 pm quite true.. maybe Im too rush ald..


This post has been edited by kanasai88: Aug 20 2008, 07:50 PM

mate, u r back

so did u ended up getting a place?

Yup, a studio in Subang. Will get the keys in a couple of months. Buying a house is a real hassle

Pai, where is Kelana Puteri condo is it near Giant?

Anyone thought of Subang Jaya. like Tiaraville. its near college and KTM.
Good returns there?

Bro,its right opposite giant accross the LDP

I don't know much about property at all and I am merely speculating here but won't the value of Vista Angkasa appreciate given the upcoming Bangsar South project extremely nearby? The project is bringing about a lot of infrastructure development in the Bkt Kerinchi area and as a result, is really cleaning up the place. Moreover, Vista Angkasa is located smack in the middle of the LRT station (which will be further expanded in the coming years) and Bangsar South so it will inevitably (or will it?) be spruced up in one way or another.

With all the improvements there, the quality of residents who rent from you will likely also improve so the risk of running into irresponsible and reckless student tenants will be less. I don't think there is any worry of a shortage of tenants.

I stayed in Vista Angakasa a long time back and IMO, there is nothing really wrong with the units. Repairs are rarely needed except for certain top floor units which experience leakage from the water tanks. I am uncertain whether this has been rectified. Units if fixed up and minimally decorated can look very nice as I've seen such units first hand before. The shortcomings are however the surrounding, maintenance (needs a new paint job amongst other things), and the quality of the community (petty thieves, roudy neighbbours). These are problems which I reckon can be overcome with the developments that are going on as stated.




Anyways, this is just my speculation. Would love to see these points debated. I'd learn a lot.

This post has been edited by wilsoncvt: Aug 23 2008, 03:09 PM

Wilson,

IMHO, the key criteria when it comes to evaluating a property investment is location, price, and timing. U'll get a potentially spectacular investment if you could get all 3 criteria right.

However, one huge wild card in a prop invetsment that none of us could guarantee or predict would be the future level of maintenance quality of facilities. Even the best located properties bought at a low price will suffer even further when its not properly maintained. Vista IMO, failed spectacularly when it comes to maintenance and up keep. Its worst than some low cost flats. And owners just dont care about renting it to 10 students as long as they make money. Changing Vista's tenant prospects will be like moving a mountain.

Unless someone buys Vista on en-bloc, and refurbish the whole develpment, then Vista is defo off from my investment consideration.........