compounds. These are the things that we advise them. We will also teach them the best way to save money and to get extra money, especially for the down payment to pay for their own property.” “I started property investment 15 years ago. That time, my father asked me to purchase a property. My salary was only RM1,000. I was a management trainee for six months, and then my father asked me to buy a property. I still hold the property, Bayu Perdana @ Klang,” Shah said. His second property buying experience happened when a home owner came to the bank, shared his problems and said that he wanted to sell the house. “And I said okay, I’m interested to buy the house – based on the location. And then after that, I went for the site visit. I tried for a loan and it got approved, and that is my second property. Until today, I have never stopped buying,” Shah added. He stated, “I had started investing in year 2001 and now have already transacted more than 100 units. Right now, I’m still holding about 89 units, including retail, commercial, residential. Is there any difficulty during the beginning? Yes, definitely, because I lacked experience. I also didn’t know the type of properties that I should buy, and where.” Shah said location is a very important issue in choosing property, because an investor must choose a location that can attract tenants. Just like other investors, he also had some experiences dealing with “tenants from hell.” “This would be the biggest and quite common issue for us when the tenants didn’t pay the rent. It happened during my first five to six years when I started investing. But it’s a good experience. That’s one of the things I always share with my students.”
WHY PROPERTY?
“Property has two important things for me. We have cash flow, and we have appreciation. These two things are very crucial things which we cannot get in other instruments of investment. Property investment is
unique. You cannot pull it, you cannot bring it together with you to show it to people wherever you go because it’s static there. When you started off, you need the money, you can leverage in it can get mortgages, can refinance it and can sell it as long as you buy the right property. If we buy the right property, we can sell it easier, we can rent it easier. Although when you decided to refinance it, you can refinance it easier compare to other investment,” expressed Shah. As a financial expert, he sees property as an asset in a bigger picture. “They must have a proper plan whereby, when they want to buy a property, they must set the actual date of when they want to buy and how much they need for the down payment, instalments and all these things,” Shah said. Expressing his concern, he said, “As we can see today, a lot of people’s concerns are more on entertainment, lifestyle, image, without the major concern in what they are supposed to have for the future. So that’s what we do here. We have clubs, coaches and mentors to guide them to create the environment. Not only to build the environment, but with the same understanding. Everyone shares their achievements with each other.” “Nowadays, young people, after graduate, they don’t have a proper planning. Even during university time, they didn’t plan anything. Then they started their career without a proper planning, without a proper financial planning. They don’t have savings, so when are they going to buy their property? They focus more on the entertainment. They obtain a credit card first, personal loan, all these things,” Shah mused. INVESTORS’ GUIDE Property investment, Shah emphasised “Is not about the quantity. It’s about the quality. You need to choose a right property. You must wait for the right moment, the right location, the right price and the right government policy. During that time, even if you want to shoot three or four units in one lump sum, it’s no problem. But then if you do it frequently – every month you
“I had started investing in year 2001 and now have already transacted more than 100 units. Right now, I’m still holding about 89 units, including retail, commercial, residential. Is there any difficulty during the beginning? Yes, definitely, because I lacked experience. I also didn’t know the type of properties that I should buy, and where.
buy one property – it’s not a good thing either.” “Because I already experienced it, I tried to keep the momentum – I purchased one in every three months. But it will drag you into another problem where you cannot maintain your personal cash flow. Because you save the money, let’s say for RM20k and RM50k, and then after that in the next three months, the money is gone – so the liquidity is less.” He opined, “So actually as an investor, we need liquidity as well. It’s not only the property. It’s not how many properties you have. You have one property, but that gives you a good appreciation and cash flow. It’s better than having ten properties but all the tenants are ‘from hell’. It will only give you headache.” MALAYSIA PROPERTY MARKET Shah expects the 2015 market to bit a www.propertyinsight.com.my JUNE 2015 I 63