A
askfind
New Member
Dear Friends.
Brief Intro. I have being investing in real estate since i was 19yrs old, Over the years have picked up a few things about real estate investing vis-a-vis other investment options available out there.
Now almost 2 decades in doing the same thing over and over again, starting off investing in Mumbai, Hong Kong, Singapore and now Malaysia. I have yet to find relatively better value at the current moment in any other place than Kuala Lumpur. I welcome critics to post their comments and will attempt to learn something new in that process.
Real estate is all about one consideration.
1. LOCATION. Its cause of this, that scarcity is developed and prices, rental yields rise. While investing in Malaysia, please consider the following.
"The market here is dependent on foreigners and second home programs, ie retirement etc."
Demand is greater in downtown cities as the influx from rural to urban continues to develop globally, higher oil / transportation/ inflation, simply means end of SURBURBIA, so investing in the right location is the KEY.
That is Kuala Lumpur, The golden Triangle and no where else. I wouldn't even advise buying on the outskirts of KLCC, ie petaling street, let alone mon't kiara or bangsar. For those thinking about Sepang GOLD COAST, Pls think again. The golden triangle is approximately a 3KM radius and there are gems to be found there. Why pay RM600-700psf in bangsar or Mon't Kiara when you can get the same in KLCC.
Note: Malaysia has alot of LAND outside the KLCC Zone and once a couple of years ago they announced no more land in Mon't Kiara, suddently land came on tap and now they are building Mon't Kiara all the way to Segambut.
2. VALUE. The second consideration is, yield to price calculation. For example is how long before your property is paid in full, a relative simply way to understand the value of the property, vis-a-vis rental yields. Just like how equities are valued as PE ratio's, you should check the value of your property and its rental.
A property which is fair valued, equates as 8-12X
decently priced, equates to 13-16x
Over priced, equates to 17X-30x
Property Price: RM400000
Rental: RM30000 pa.
= 13.33X
For example, a rental yield of 8years which equals to the property price is a rarefind and a gem. Almost impossible to find anything like this the world over.
During the property boom of the america's value of rental vs price had almost hit 30X, suggesting a peak in prices is on the cards.
3. Liquidity. Again, no one else besides KLCC there is liquidity in real estate transactions. For a Investor the right question to ask is, Can I get out in an event i want to sell? OR RENT?
In the right location, liquidity can be found at the right price, ie if noone wants to rent, by you lowering the price, can you get a tenant, if so how soon? The same is when you want to sell.
Cause if you are sitting on paper profits, but the unit is vacant, the probability of that unit even getting an offer for sale is relatively low. So whats the use of the paper profit when it can never be converted.
Liquidity is the key, cause when down moves occur there are properties that can sit on the shelf for years without doing anything.
Other Pointers about MALAYSIA.
1) Malaysia is lax with funding, capital is relatively easier for foreigners to get, mortgages are relatively much easier than any other country in WORLD. You will need full cash for deals in Thailand, Vietnam and in other parts, you can only get upto 60% of the property value. 80-85% is available here. Rental documents can also be used as a source of income.
2) Malaysia is a commodity resource economy with huge tracks of land full with natural resources, with having two main sources of OIL, on land and below.
3) Malaysia's climate is one of the best. It sells RAIN to the ARABS, an OASIS and sells SUNSHINE TO THE EUROPEANS.
4) Most land or property can be purchased as FREEHOLD, this is not the case in DUBAI, THAILAND, VIETNAM or CAMBODIA. Even in HK, developers promises are till 2047, as the date of 50yrs from 1997.
END.
Next series. 1) What to invest in and Why? Land, Apartments of Commercial units.
Brief Intro. I have being investing in real estate since i was 19yrs old, Over the years have picked up a few things about real estate investing vis-a-vis other investment options available out there.
Now almost 2 decades in doing the same thing over and over again, starting off investing in Mumbai, Hong Kong, Singapore and now Malaysia. I have yet to find relatively better value at the current moment in any other place than Kuala Lumpur. I welcome critics to post their comments and will attempt to learn something new in that process.
Real estate is all about one consideration.
1. LOCATION. Its cause of this, that scarcity is developed and prices, rental yields rise. While investing in Malaysia, please consider the following.
"The market here is dependent on foreigners and second home programs, ie retirement etc."
Demand is greater in downtown cities as the influx from rural to urban continues to develop globally, higher oil / transportation/ inflation, simply means end of SURBURBIA, so investing in the right location is the KEY.
That is Kuala Lumpur, The golden Triangle and no where else. I wouldn't even advise buying on the outskirts of KLCC, ie petaling street, let alone mon't kiara or bangsar. For those thinking about Sepang GOLD COAST, Pls think again. The golden triangle is approximately a 3KM radius and there are gems to be found there. Why pay RM600-700psf in bangsar or Mon't Kiara when you can get the same in KLCC.
Note: Malaysia has alot of LAND outside the KLCC Zone and once a couple of years ago they announced no more land in Mon't Kiara, suddently land came on tap and now they are building Mon't Kiara all the way to Segambut.
2. VALUE. The second consideration is, yield to price calculation. For example is how long before your property is paid in full, a relative simply way to understand the value of the property, vis-a-vis rental yields. Just like how equities are valued as PE ratio's, you should check the value of your property and its rental.
A property which is fair valued, equates as 8-12X
decently priced, equates to 13-16x
Over priced, equates to 17X-30x
Property Price: RM400000
Rental: RM30000 pa.
= 13.33X
For example, a rental yield of 8years which equals to the property price is a rarefind and a gem. Almost impossible to find anything like this the world over.
During the property boom of the america's value of rental vs price had almost hit 30X, suggesting a peak in prices is on the cards.
3. Liquidity. Again, no one else besides KLCC there is liquidity in real estate transactions. For a Investor the right question to ask is, Can I get out in an event i want to sell? OR RENT?
In the right location, liquidity can be found at the right price, ie if noone wants to rent, by you lowering the price, can you get a tenant, if so how soon? The same is when you want to sell.
Cause if you are sitting on paper profits, but the unit is vacant, the probability of that unit even getting an offer for sale is relatively low. So whats the use of the paper profit when it can never be converted.
Liquidity is the key, cause when down moves occur there are properties that can sit on the shelf for years without doing anything.
Other Pointers about MALAYSIA.
1) Malaysia is lax with funding, capital is relatively easier for foreigners to get, mortgages are relatively much easier than any other country in WORLD. You will need full cash for deals in Thailand, Vietnam and in other parts, you can only get upto 60% of the property value. 80-85% is available here. Rental documents can also be used as a source of income.
2) Malaysia is a commodity resource economy with huge tracks of land full with natural resources, with having two main sources of OIL, on land and below.
3) Malaysia's climate is one of the best. It sells RAIN to the ARABS, an OASIS and sells SUNSHINE TO THE EUROPEANS.
4) Most land or property can be purchased as FREEHOLD, this is not the case in DUBAI, THAILAND, VIETNAM or CAMBODIA. Even in HK, developers promises are till 2047, as the date of 50yrs from 1997.
END.
Next series. 1) What to invest in and Why? Land, Apartments of Commercial units.