T
here
are two sides to
every coin, and so it is with
investments, whether in the
bull or bear markets. Where
weakness in property stocks may
come as amisfortune to some, it’s an
opportunity to accumulate assets
and increase wealth for others. In
investing, it is common for investors
to ownmultiple properties, one
which serves as a primary residence,
while others are used to generate
revenue. Real estate, when bought
for a song and sold for a stately profit,
can generate some serious income.
Close a couple of such deals and
you’re on your way to attaining
financial independence. Then again,
although there aremany like Vanessa
Tshai (refer to
.
com/how-she-makes-rm200k-in-
property-investment-within-4-years-
vanessa-tshai%E2%80%99s-
successful-story/
) who havemade
their heap buying and selling
property, there are those who have
had their hands burnt, investing
blindly. This has led to growing
interest from the public and a rise in
the number of property investment
seminars, where wanna-be investors
learn the tricks of the property trade.
Leverage for more
Property investment gurus like
MilanDoshi and VincentWong can
attest to the tried and tested theories
of property investment. They’ve
even devised foolproof methods on
how tomake your property
purchases work for you. SaysMilan,
“
Investors need to learn how to
borrow ‘intelligently’ as much as
possible
.
One of theways is to
leverage and use the bank’s
money, even
though you can
afford not to
. By
doing this, you
only need to
come upwith a
minimumof let’s
say 10% for the
down payment,
and take on a
smaller
percentage of the
risks involved.”
What more with
some property
developers
launching
developments
where zero
down payment
is required.
Win-Win
options
VincentWong on
the other hand
wrote
Step by
StepGuide to
LeaseOptions
and co-founded
WealthDragons. He believes that
one does not require finance to
invest in property
. The UK-born
and bred investments coach and
international speaker has helped
many sellers move on in their
financial difficulties whilst
assisting investors inmaking
property purchases, without
having to take up amortgage plan.
He does this using amethod called
‘Lease Options’, which he coined.
“A piece of property can be an
asset or liability to the seller,
depending on the seller’s
circumstances.
Lease Options is
a contractual agreement made
between the seller and investor,
where the latter resumes all
responsibilities of the property,
including themortgage payment and
the property’s maintenance. In this
agreement, the seller gets tomove on
with his/her life while the investor
will fix an ‘option price’ at which the
property can be purchased in the
future, typically between five and
seven years. In other words, the
investor promises to pay the seller’s
mortgage in return for the capital
potential increase of the property in
the future. Naturally, the investor will
let the property out to tenants and
benefit from rental profits. If the
investor decides not to exercise an
option at the end of the agreement
and purchase the property, (which is
unusual due to the benefit from the
capital increase of the property), the
propertywill just be handed back to
the original seller owner.
It’s a
win-win agreement
,” Vincent says,
but adds that
lease options are not
meant for every deal and should
be used by investors who have
been trained appropriately.
The
benefits of Lease Options: the seller
gets time to get back on his feet
where his finances are concerned
and has the option of selling his
property; the investor gets tomake a
profit from rental, and if a good
arrangement is made, would have
structured a purchase option price.
In some cases, a profit share can be
in-built into the agreement. Lease
Options can benefit buyer and seller
inmanyways.
To buy or not to buy
An article on iProperty.comhas
Kelvin Fong, CEO and co-founder of
training company Zest Academy
Group advising investors to
minimise their risks and
maximise profits
. He recommends
potential investors to
refer to facts
and figures whenmaking
purchases and not rely on one’s
emotions or hearsay
. His also
shares of the two golden rules that
have brought himenormous success:
To always look for the potential
upside; and to calculate the
amount of risks involved.
With these tips at hand,
we ask the deputy president of the
Malaysian Institute of Estate Agents
(MIEA) and Agency CEOof PPC
International Sdn Bhd, Siva Shanker,
for his viewon the local property
market for 2013. “The first few
months of the year saw the local
propertymarket a little quiet,
possibly due to the general elections,
and the potential possibility of a
change in the government. If indeed
this were to happen, this would be a
first inMalaysia, and the situation
made investors wary. This sentiment
transcended to the propertymarket
which silently created pent up
demand. Soon after the elections
were over, and the situationwas
status quo, themarket went into a
frenzy, due to pent up demands
exploding. Well, the initial frenzy has
quieted, and themarket has become
more sensible now.
“
I expect themarket this year
to registermoderate growth of
between 10%and 12%on average.
I believe that this
year, wewill see a
higher number
of transactions,
compared to 2012.
No unusually high
growth is expected
this year. Any growth
will bemoderate in
nature, which is
good for the long
term sustainability of
themarket.
”
So, is it a ‘safe’ time
to buy, or is there really
a good or bad time to
invest in property.
According to
Milan, “Even the
experts haven’t
found the holy
grail of when is the
‘right’ time to buy
and sell. Frankly,
there is no such
thing as the
perfect time.
As long as you
find a good deal belowmarket,
in a good locationwith high
demand and limited supply,
then it’s time to buy
. Whether you
should sell when the time is right or
keep for long termdepends on your
objective.” Our take,
look out for
the signs, attend courses to
increase your property
investment knowledge, speak
and learn fromqualified
professionals to learn the
tricks of the property trade,
do research and read on the
subject, and start small
.
NOTE – All charts and graphs were
obtained from the Property Industry
Survey report by the Real Estate and
Housing Developers’ Association of
Malaysia (REHDA).
Those interested to learn more
about property investment can listen
toMilan, Vincent and Siva, along with
other property greats, at a seminar in
KL on August 17th and 18th. For details,
visit
com/2013/ or
.
wealthmasteryacademy.com)
ON
friday
july 5, 2013
DID YOU KNOW?
RPGT is only imposed on net gains after deducting all costs involved such as the
purchase price, renovation cost, legal fees and stamp duty. The government
increased RPGT (Real Property Gains Tax) to 15% from the current 10% on all
properties sold before two years from the date of purchase, and to 10% from
5% for properties sold between the third and fifth year in the recent budget.
Real estate property owners who are not profit motivated and not involved
in speculation are eligible for RGPT exemptions on these accounts:
1. RPGT exemption on gains from the disposal of one residential property once
in a life time to individuals (citizens and permanent residents);
2. RPGT exemption up to RM10,000 or 10% of the net gains, whichever is
higher, from the disposal of real property by individuals (citizens, permanent
residents and non-citizens); and
3. RPGT exemption on gains from disposal of real property between husband
and wife, parents and children, grandparents and grandchildren.
(Information retrieved from
and
/)
X
X
Feel free to email your
queries to us:
propertyqs@
thesundaily.com
X
X
To read the more
comprehensive
version of this article,
please log on to
>TheAnnual Global Retirement Index 2013 rankedMalaysia the
thirdbest place to retire in, so start accruingwealth togain financial
independenceby investing in real estate
in
Property
Investing
BCI Asia 2013
Top 10 Developers
in Malaysia
•
IOI Properties Berhad for
IOI City Mall
• Mah Sing Group Berhad for
The Meridien
• Nadayu Properties Berhad for
Nadayu 28 Sunway
• Perbadanan Kemajuan Negeri
Selangor (PKNS) for Kota Puteri:
Link House
• S P Setia Berhad for S P Setia
Corporate Headquarters
• Sime Darby Property Berhad for
Sime Darby: Isola
• Sunway Berhad for The Pinnacle
• Symphony Life Berhad for
Taman Tasik Prima: The Wharf
(Serviced Apartments)
• Tropicana Corporation Berhad
for Tropez Residences @
Tropicana Danga Bay
• UEM Land Holdings Berhad
for Imperia @ Puteri Harbour
Waterfront
(Information above received from BCI
Asia. ForTop 10 architects, please visit
)
property investing tips
•
Two Golden Rules
Look for the potential
upside, and always calculate
the amount of risk involved
in the investment.
•
Don’t Believe
The Hype
Always refer to facts
and figures and not the
hype surrounding the
property or your own
hopes and emotions.
• Enter At The Right Price
When choosing the right
property, nothing is as critical
as the right entry price.
Cross-check the property
price against surrounding
properties; if it is lower than
its neighbours, you’re taking
less of a risk and have the
potential to make more profit.
•
Popularity Counts
Popularity needs
consideration. The property
has to be sizeable enough.
Reasonably well-known areas
and architect’s brand name
give a strong publicity push.
These are the properties
which prices will escalate.
•
Look For Uncertain Times
If the market isn’t good, there
will be buying opportunities,
and interest rates will have to
stay low. Do your calculations,
POSTPONED...
The Smart Investment in Property
Seminar 2013 themed ‘Post
GE13-Where?’ by FIABCI
Malaysia initially scheduled for
this Saturday July 6th, has been
postponed to September 7th. For
further queries and details, visit
or call
03-6203 5090/1.
don’t speculate and
take advantage of
the opportunities.
•
Multiply Your Asset
s
Know when to sell your
property. Cashing out your
profit will probably enable
you to buy more properties
and multiply your wealth.
•
Be Confident
The property market isn’t as
volatile as the stock market’s
extreme day-to-day changes.
Acquire adequate
knowledge, holding power
(the resources needed to
keep a property for a few
years) and confidence in the
long-term economy of the
nation, and go for it.
(These are tips from Kelvin
Fong, retrieved from http://
)
RESIDENTIAL SELLING PRICE BY STATE
faCtors tHat infLuenCe
buyers’ demand
Size
7%
Potential
rental yield
7%
Security
Features
5%
Location
27%
Price
22%
Potential
capital
appreciation
15%
Accessibility/
Connectivity
14%
Design Layout
4%
% Selangor and KL respondents
The
factors are
location, price and
potential capital
appreciation
1
puchong
top 3 property types
top 5 Hotspots
(based on 21 areas in KLang vaLLey)
Kota damansara
Kajang
Cheras
KLCC
2
3
4
5
Landed
properties
Condominiums
service
apartments
INSIGHTS
CUT AND KEEP
