No doubt there are pros and cons in property investment, like I said, I prefer property investment cause it gives me passive income as compared to share trading, plus I was once an auditor and most of the blue chip companies were my company's client hence it was an hassle for me to dabble into share market. I didnt quite have the time to monitor the shares as well. Whereas I can take my time in property investment cause properties are in nature illiquid, I can afford to view it several times before putting my money down.
Investing in Msia is entirely different as compared to Singapore. Due to strict government control in Singapore, the property game is only reserve for those who are cash rich. Whereas it is entirely different story in Msia. I can only afford one in Singapore as compared to owning 3 in Msia.
There are always undervalued properties around KL due to inefficient market, in contrast with Singapore URA, Msia dont update their database as often as they should be, hence despite the crazy prices published on classified and on iproperty, it is always negotiable.
For myself, I always look for the cheapest/oldest property in prime area. Especially when there are a few parcel of empty land around your targetted area is launching soon, the price of the new development is always higher than the older ones. At the moment, a lot developers in Msia tend to build mix development (retail podium + condo at the top). When this happens, obviously the property around the area would go up as well.
So, using that new price as a gauge, you can easily refinance your property at the new psf prices (at a slight discount) despite your property is much older but within the prime area. That's one way to recash out your money for the next development. I have not done this though but I know a lot ppl who did.
Secondly, I stretch my installment to the maximum age. (40 years is the maximum in Msia), despite paying more interest but I get the positive cash flow earlier. And once my lock in period with the bank expires, I would refinance to cash out or sell it for capital again.
Within my network of people, I personally know 5 people who owns more than 5 properties within 2 years, all below 30 years old. 3 of them are financially free, one pursue his interest in real estate, two are setting their own real estate consultancy firm.
One of their secret is that, they bought studios apartment around KLCC area two years ago. Back then, a lot ppl were skeptical of studios apartment which is nothing more than 400sf. Older investors calling them pigeon holes, but there were surge of single expats and deep pocket students from India, Middle Eastern and Korean looking for small units. They bought it at RM150K-RM200K, renting it out about RM1.4k-1.6k a month, that's 11% gross! Now all these studios are asking for RM300k and short term rental can go as high as RM2k. It was crazy. I didnt quite buy the idea when I first bought my 3 rooms condo, but I see it for myself when my friend's unit were easily rented out within days when his last tenant moves out. It took me 2 months to secure a tenant for my bigger unit, but of course bigger unit tend to have stable tenant (Family) as compared to smaller units (Singles). But yield for smaller apartments are better than bigger units cause you can play short term rental which commands a premium.
Of course all these only happens in KL prime area. Those who invested in JB cant get such yield unless they buy into low cost properties.
(24-06-2011, 01:19 AM)Musicwhiz Wrote: [ -> ]This post is not to discourage you, but rather just to inform that handling and managing tenants is not as easy as it seems.
I totally agree with you, that's the inherent risk of property investment. My initial plan was to target students, but eventually gave up after viewing units occupied by students. I have very good agents that deals with Corporate client, hence the rental is paid for by the company. Less hassle, prompt payment and quality of tenant is usually better. And my units are signed for 2 years.
(24-06-2011, 01:19 AM)Musicwhiz Wrote: [ -> ]This post is not to discourage you, but rather just to inform that handling and managing tenants is not as easy as it seems.
I totally agree with you. That's the inherent risk of property investment. My initial plan was to target students, but after viewing the unit occupied by students, I doubt I have the patient to deal with them hence opted to buy into medium to high end condo. I am lucky that I have good agents that deal with corporate client where the rental is paid for by the company. Prompt payment, better quality tenant, less hassle and signed on for 2 years.