Your loan interest can be deduct from your rental income (even when you are employee), so pay less tax also.
I heard setting up company have to pay some accountant fees every year maybe RM1k? If that is more than your tax what for?

From wikipedia:
The subprime mortgage crisis is an ongoing financial crisis triggered by a significant decline in housing prices and related mortgage payment delinquencies and foreclosures in the United States.

Did RDPD assume house price will only go up? coz they don't make more land?

Moral of the story: don't borrow too much and don't expect your house value (including rental) will only go up.

Alternative view about RDPD: http://www.johntreed.com/Kiyosaki.html

This post has been edited by getsmart: Nov 25 2008, 03:51 PM

i think you just contradicted yourself
how to make profit when you buy if the price not go up after you buy?
you see the reverse psychology or subliminal message at work here?

Motivational books you can use those feel-good catchy phrase lar, but this about investment mah.

I see your point.
Always calculate your profit as rent/house value.
Assume house value = 120,000 that will give you 6000/120,000 = 5% profit.

Don't forget bank charge you interest. If profit is 5% and bank interest 5% your nett profit is zero but you still have to pay the lawyer fees . Don't forget about inflation too.

As a landlord, consider the risk of tenant not paying, house maintenance, etc, etc.

Think about this: You may get positive cashflow of RM100 every month but you can only buy your second rental property after 30 years?

i have done research and this just my opinion . you are free to share yours, this is a forum mah

many people just look at the instant gratification and not think of worst case scenario.
this make them easy target for creative marketing, con artists and get rick quick schemes.
imagine even got people give 10K and more to strangers who contact them via sms and emails.

@b00n
Flipping i can agree.

I like to agree with the rental income but:
- if house value drop 20% you borrow 85%, will bank ask you to top up 5% more?
- if rental is same as your monthly expense, how long the loan period is acceptable?

Longer loan period, more money go in. Shorter period, more money go out. So what's your yield actually??? This is why i think dividing rental with house value gives more realistic picture. You can then compare it with other investments year on year.

My research? That you can quickly decide whether property rental yield is good enough by rental/house price formula. Ask some real estate agent about investment property, then ask how they calculate the rental yield. I think 8% is consider good.

If you pay cash, that 8% is working for your money 100%. If you start with 15% dp, then only 15% of that 8% is working for your money (75% work for the bank). Overtime, your installments will increase that 15% to 100% when you settle the loan.

I think I got off topic, so enough about RK.

Why need to setup company when the tax for company is 26%? I think for employees if have 4 rental property can also deduct all those expenses like what Pai listed? Maybe only 1 rental property also can?

thanks ttwangsa

I know 10% only can buy house but that depends on risk appetite - how much exposure to debt you willing to take.
Mine is very low . All my money now goes to my current house loan which i'm staying in.

I plan to save enough money to settle the house loan but i'll not settle it (coz want to withdraw from EPF again). So will use the money to buy another property. Then when new property fully settle, buy another and repeat.

@Pai

I admit that's wrong. Putting more cash in is like what ttwangsa says depend whether EPF (or savings) return is less than bank interest and not related to the 8% rental yield.

His calculation is based on RM invested. I guess it could mean borrowing 100% (RM0 invested), so RM1 rent over RM0 invest is infinite

But I got a question with this ....

Bank lend 100% becoz house value is high enuf from house price. If the bank valuation is correct, then we actually have (house value - price) RM invested, coz if we sell it, we could use that money to invest else where. So infinite doesn't apply here?

Infinite is only true if the bank valuation is wrong i.e. we could not REALLY sell at the higher valuation but get the RM from bank to invest anyway.