Wednesday 23 May 2018

You Can Invest Property This Way

1. Most property investors in Malaysia have a traditional concept about property investment.

2. Investing property to them means buy a house, find a tenant, and sell it later at higher price.

3. Many investors are not aware that there are many other types of property investments. In fact, the conventional buy to keep strategy may not be suitable for everyone. It is not for young investors with low holding power.

4. Today in Malaysia, the property market is going through a consolidation. Even in Kuala Lumpur, many property rental cannot cover the ongoing costs - loan interests, maintenance fee, assessment, quit rents, and contingency repair.

5. Not to mention getting tenants is getting harder today, due to increasing property supply. Tenants prefer newer property. They have many newer choices. Older property lost competitiveness to new property.

6. Some owners faces troubles selling their older property above 10 years; especially if the management office did not maintain the common area well. Be honest with yourselves, investing property is not like 10 years ago. People should give up the idea of flipping and making profit over night. At least for now and years to come.

7. Leaseback property is more suitable for current market scenario . The property is leased to a professional operator, to rent to a niche tenant in the area. For example, a hostel operator gets a special contract with college to rent the rooms to students. Hotel operator can rent your units to tourist at tourism hot spot.

8. This investment module will solve the problem mentioned in point 4 ,5 ,and 6.

9. Pick the right operator that add value to your property, so it can fetch a higher rental. A reputable operator will maintain the standard of your common area and facility to cope with their brand standard. If you have a 5-star operator, do expect your property to be 5-star under their management.

10. Property is all about location, location, location. If your property is bundled with hotel operation, pick a famous tourist destination where the tourist arrival is expected to rise. Basic supply-demand theory applies here. More tourist, better return. Pay attention to infrastructure upgrades such as road, airport, and jetty. These are pipelines to bring more tourists.

10. If your property do not generate higher cash flow, do not dream of selling it at higher price in future, even if the property has been touted as in prime development masterplan. If nobody is willing to pay a higher rent to stay there, nobody will pay a higher mortgage to stay here.

11. If you can rent the place with RM3,000/mth, who will pay mortgage of RM 4,000 a month and pay RM 1,000/mth maintenance fee to stay in the same place ? Participate in the future appreciation? If people are not willing to pay a higher rental, who would pay a higher mortgage?

12. If your property can generate higher rental in the future, you can sell it at higher price for sure. If you are willing to pay RM 600k for a RM 36k rental/year , when the rental increase to RM 48k/year, somebody will buy that at RM 800k. This is how property investment should work.

13. If your property rental increases, selling it at higher price is not a problem. If your property rental do not grow, you are trapped.

14. If you want to buy a property with rental yield and rental growth, send your message to this page.

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