Bedroom - Amara Residence, Batu Caves
This depends on a variety of factors such as my Central Credit Reference Information System (CCRIS) rating, ability to finance a loan coupled with repayment plans. As an investor, I focus mainly on properties around the Klang Valley region that have easy access to transportation. I only invest in condominiums, apartments or service apartments. I chose high-rise properties because in addition to investing, I need to maximise my rental yields to cover my monthly loan repayments. There is a significant difference if you look at the rental rates between condominiums and landed properties. A high-rise property generally commands better rental rates than a landed property, even if both are fully furnished. There is a prevailing sentiment among renters that it would be better to buy a landed property outright instead of renting it. Therefore, a landlord would not be able to lease his property at a higher rate even though the area footage of the property is larger than a high-rise property. When I rent out my properties, I focus on the younger generation who tend to be more mobile.These younger executives prefer having modern living amenities and transportation nearby which benefit them. Also, there are not many landed properties that would be able to provide the security and comfort of condominium living and be affordable to the young.
PI: What do you think of the current market sentiment?
Living Room - Amara Residence, Batu Caves
MF: There is a clichĂŠ in property investment that says, “the best time to invest was yesterday and the second-best time is nowâ€?. The market value of a property will not go down, only the asking price would possibly differ. Having said that, you must do your research thoroughly before purchasing. Property prices have increased rapidly in the last 10 years. I think prices would only soar in the future. In a few years, I am certain you would not be able to find as good a deal as you would right now.
PI: What is your strategy to finding a good deal? with any decisions. Buying a property is a risky endeavour and is something that requires long term planning. If something unfortunate happens, the other party would still be able to continue to safeguard our investments. For example, if I were to rent out one of our properties with a negative cash flow, I will still be able to obtain extra money from her to pay off whatever housing instalments that I have left on the property. We move forward together as a team because it is our investment and not mine or hers alone.
PI: As a navy and family man, how do you balance your work, life and investments together?
MF: These days, I am working on land with fixed office hours instead of being at sea. In my spare time during the week, I will read up on market trends and search online for the latest property and deals that are available now. When I am back in KL during the weekends, I spend three to four hours viewing the properties that I have researched online.
PI: What do you look for when you are expanding your portfolio?
MF: I am mainly interested in projects that are still under construction. Such projects provide low price entry and deposit bookings for a unit. This way, I will not lose too much money if I wish to pull out of the project before signing the contract. I also have a threshold, a maximum price that I do not exceed.
MF: Firstly, you need to ascertain the market price of a property. Find out the average selling and asking price of properties in the area you are interested in. You need to remember that you are making money not only when you sell the property, but also when you are buying it. The profit on paper is just as important as the profit in hand, even if you are selling the property later. Secondly, you need to have long term planning. There are plenty of properties under construction these days that are selling between RM400,000 and RM500,000. This is the price range that I would buy at. Personally, as a government civil servant, I am able to obtain housing loans of up to RM650,000. In addition, there are many civil servants in the country and because of the loan threshold, they would be able to obtain loans from the government with relative ease and even given the price appreciation.
PI: Any advice for those who wish to start investing?
MF: I would advise those who wish to start investing to not go into it blindly. If they have the time and means, they should read and attend property seminars. You need to know what you are doing before making your first purchase. It is important to have knowledge of the area, study the market sentiments and work out other pertinent details. If you do purchase unknowingly, there is a risk that you could invest in the wrong property. Learn and seek the advice of friends who know the industry and then start buying. July 2017 I 57