MKH developer acquire stake in Puncak Alam Resources... Next to UITM PUNCAK ALAM, SHAH ALAM..

Dear All,

For those who have invested in Puncak Alam Township, Congratulation!. More good news are coming!

This is  my strategy for all these years... Focus on growth area! You cannot go wrong... However, it must be done properly and do not go blindly... I'll share with you one of the lesson learnt for NOT knowing the marketplace well in my eBOOK. Download today!

In the Edge website, MKH has taken over PARSB to develop another township in Puncak Alam. The original plan to develop Rozali City is now become Hillpark Shah Alam.

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KUALA LUMPUR: Kajang-based developer MKH Bhd has acquired a 100% stake in Puncak Alam Resources Sdn Bhd (PARSB) from the family of Tan Sri Rozali Ismail for RM30.6 million.

According to MKH’s announcement to Bursa Malaysia, PARSB holds an exclusive right to develop approximately 550 acres (222.6ha) of land in Ijok, Kuala Selangor, that belongs to TM Facilities Sdn Bhd, a unit of Telekom Malaysia Bhd.

MKH said the development agreement between PARSB and TM Facilities was signed in 2005, followed by a supplemental agreement in 2011. However, it did not elaborate on the status of development on the land or details of the agreement with TM Facilities.

It is worth noting that PARSB’s vendor Rozali is the controlling shareholder of water utilities group Puncak Niaga Holdings Bhd, which has unresolved issues with the Selangor government regarding the water infrastructure in the state.

The acquisition of PARSB is made through MKH’s wholly owned subsidiary Pelangi Seri Alam Development Sdn Bhd, which has already paid the RM30.6 million to the vendor.

“The purchase consideration was arrived at based on the estimated gross development value (GDV) of the land of approximately of RM1 billion,” said MKH, adding that there would be no liabilities assumed by the group arising from the acquisition.

MKH said it planned to develop the land into a new township comprising mixed residential and commercial development with a GDV of RM1 billion over five years.

“The acquisition is in line with the group’s objective to further strengthen its future revenue and earnings from property development and to enhance the group’s presence in Puncak Alam,” it said.

MKH added that the land is located at the northern growth corridor opposite the existing UiTM Puncak Alam campus and is easily accessible via major highways such as the Guthrie Corridor Highway and the New Klang Valley Expressway.

This article first appeared in The Edge Financial Daily, on August 07, 2013.

Tip No 1#: Buy the neighbourhood, NOT homes! Consider Growth Potential

If you are looking for home, buy with your heart more than your head. BUT, if you want to an investment, put on your thinking cap.

Buying a home is an emotional decision. Everybody likes to feel that he is getting a good deal or that the property value will appreciate, but the truth is, most people buy a home because it uniquely reflect their personality.

They just want to live in a house like the one in which they grew up, and they proceed to buy a house like that, wherever it may be located. That can be FATAL.

Home buyers sometimes make mistake of focusing on home acquisition as an investment and overlook quality of life factors such as proximity to schools, parks, work and amenities. All these aspect of daily life that make a healthy, safe and comfortable home.

Tip No 1#: Buy the neighborhood.

My advice is to find the neighborhood that you like best and then select the best home for you in the neighborhood. It may not be the perfect home, but it will give you the best combination of factors that you need the maximum value and not lose your shirt when you sell.

Neighborhood drive values more than the individual homes do.

I have posted earlier in my blog on the new upcoming township called HillPark at Puncak Alam. I want to relate my tips to why you should invest in the neighborhood of Puncak Alam. This is my case study so you may want to explore other similar area that has the same traits.

As you can see from the google map above, it's going to be the next hotspot in Shah Alam. Hill park is situated just a stone away from UITM Puncak Alam main campus. With the existing mature township as Glomac Saujana Utama, IJM Shah Alam 2, and Worldwide Puncak Bestari, this is your next growth Potential Area. It has the right neighborhood, great accessibility from the new LATAR highway, University and Industrial Zone where work come in play.

Neighborhood drive values more than the individual homes.!

__________________________________________________________________________________

 This is a sneak preview of what you will get in my eBOOK. I have another 87 hot tips# to share with you. I've been wanted to write this book for years. What I know, I know well. However, on real estate wisdom, I don't have the monopoly. In this new centuries, everyone want cheaper, faster, better way to gain maximum return on their property investment. The faster way is to learn from other people experience and lesson learnt from their mistake and the their success.

Download it today and learn from the best that you can get only from a lifetime experience.

Good article... Why we should buy a property now? Do I have too?

Interesting article by a reknown expert in property Datuk Alan Tong. It does make sense.

Why wait? History has proven that investing in property with the right knowledge will definitely give you an excellent return.

A PACKET of nasi lemak (rice cooked in coconut milk) with a fried egg costs around RM2 nowadays. I remember getting a similar packet (and in bigger portion) at RM1 ten years ago. It is a 100% price appreciation in ten years! My friends and I were jokingly saying that nasi lemak would be a good investment tool if it can be kept for ten years.

However, all of us know that nasi lemak is best served when it is fresh. It can never be kept for long despite its potential for value appreciation. In fact, its value will drop to zero as soon as it turns stale. And interestingly, the same situation applies to the money we hold today. Our currency can be as “perishable” as nasi lemak in this global money printing era if money is not produced for the right purpose and use in the right way and the right time.

The global economies have been embarking on expansionary monetary policies since the financial crisis broke out in 2008. Central banks around the world are printing money to support their economies and increase exports, with the United States as the primary instigator.

Since 2008, the Fed initiated several rounds of measure termed “Quantitative Easing”, which is literally known as an act of money printing. The Fed’s balance sheet was about US$700bil (RM2.1 trillion) when the global financial crisis began; now it has more than tripled. With several countries’ central banks including the European Central bank, the Bank of Japan and the Bank of England taking similar expansionary measures and encouraging lending, more than US$10 trillion (RM30.3 trillion) has been poured into the global economy since the crisis began.

While the global central banks have become addicted to open-ended easing and competed to weaken their currencies to boost economies, the impact of these measures to the global economy is not quantifiable or realised yet. However, basic economic theory tells us that when there is too much money chasing limited goods in the market, it will eventually spark inflation.

When money is created out of thin air, there is no fundamental support to the new money pumped into the economies. More money supply would only be good if the productivity is going up or in the other sense, when more products and value-added services are created. In the absence of good productivity, more and more money would not make people richer. Instead, it would only decrease the purchasing value of the printed notes.

Let’s imagine a more simplified situation. For example, we used to purchase an apple for RM1. If the money supply doubled but the amount of apples available in the market remains, one apple will now costs us RM2 instead of RM1. Now, our money has halved its original value. If the central banks of the key economies keep flooding the global markets by printing more money, the scenario can only lead to the worst, i.e. hyperinflation.

This occurred in Germany after the First World War. Hyperinflation happened as the Weimar government printed banknotes in great quantities to pay for its war reparation. The value of the German banknote then fell since it was not supported in equal or greater terms by the country’s production.

Flood of money

The sudden flood of money followed by a massive workers’ strike, drove prices out of control. A loaf of bread which cost 250 marks in January 1923 jumped to 200 billion marks in November 1923. People collected wages with suitcases. Thieves would rather steal the suitcase instead of the money, and it was cheaper to light fire with money than with newspaper. The German currency was practically worthless during the hyperinflation period.

That scenario may seem incredible in today’s context. Nevertheless, we should not downplay the severity of a global inflation should the current synchronised money printing push the economies of major countries to burst like a balloon in sequence.

When this scenario happens, people with savings and fixed income will likely be the hardest hit. To withstand the tide of inflation, the best defence is to invest in assets such as publicly traded shares, metal commodities like gold and silver and properties that can hedge against inflation.

Investing in any assets require in-depth research before embarking on one. Commodities and stock markets are liquid assets that can be bought and sold with relative ease, while properties are favoured as long-term investment.

With Malaysia’s current economic and population growth, added with its still comparatively low property prices in the region, our primary and secondary market properties are good investment assets for investors to gain from the continuous capital appreciation that this industry is enjoying.

With the above as a backdrop, are property prices really going up globally?

Using the nasi lemak analogy, if we were to buy a RM100,000 medium-cost apartment 10 years ago, it would be equivalent to 100,000 packets of nasi lemak. Assuming it has doubled in price today, it would still be the equivalent of 100,000 packets of nasi lemak at RM2 today. It would seem to me that the true value of properties hasn’t gone up, but that global currencies have just gotten cheaper.

Asia Pacific chairman Datuk Alan Tong has over 50 years of experience in property development.

Property Make Money eBOOK Trial Period Launch!

Dear All,

I have been waiting for the right way to share my experience with all of you and I have decided the best way is to share through blog. I have started to write a sample of my property make money ebook chapter and will upload progressively in my blog. You can get it here:

http://propertymakemoney.blogspot.com/p/property-make-money-ebook-download-now.html

The ebook is written in such a way that you'll never sleep going through it. Register with me on your interest during these trial period!

These are the key benefits that you will get from my ebook:

1. Cheaper:

• You can download immediately from the web. Anywhere you are.
• Save additional cost of transfer to get the book. There's no need to travel, going to the bookstore, etc. You can download straight from the comfort of your home.
• Your ebook softcopy are safe with me. If you lose it, don't worry. Just let me know and you can download it again at no COST!

2. Faster:

• You'll be able to gain immediate access to the ebook within 15 min after SMS payment confirmed. Guaranteed! Why wait!
• All chapters are being converted to the smallest size. Less time to download. You'll be able to open it to read in no time.

3. Better:

• Get access of knowledge from the experience properties investors mind and strategies. Don't missed out on the opportunity to make less mistake, find better location and use a proven technique to make your property a money working machine.
• Unlimited Chapter. This is niche of my eBOOK. You will get additional chapter for free! as time goes by! I will continue to add new chapter in my eBOOK as more mature we come and guess what? It's FREE!

Can I buy a house? Now..check this out..

THE STAR

At current rates, fresh grad workers cannot afford to buy a house.

It was one of those long eye-opening conversation between father and his soon-to-graduate son.

“What are you going to do when you graduate?”

“Get a job, buy a car.”

“Don’t you want to buy a house?”

“It’s too expensive. I can always live with you and mum,” says Sonny.

There was a long silence.

“Dad, I went into environmental studies because I believe I can do my little part for the world we live in today. I am not looking for a fat salary,” says Sonny.

“But you need to have a decent salary in order to buy your own house one day. You can’t live with mum and dad forever, although I know your mum would like that,” says Dad.

“I read somewhere that it is possible for young people to buy their own house without taking a two-generational loan. And I am trying hard to be independent. I just need to get around some puzzling issues.

“Like what?”

And so begins the little lesson in house ownership.
What sort of loan tenure will be suitable for a young person?

A 35-year loan is more than adequate. If he needs a loan tenure longer than 35 years, it just means that he is buying something that is far beyond his current income levels.

What sort of loan tenure do most banks provide?

Most banks only give housing loans up to 30 years. Selected banks previously gave loans up to 45 years. These are two generational loans. Most people are against two generational loans as the second generation is born into debt – “Slave into debt”.

How much of my salary should go towards housing loan repayment?

The rule of thumb is always the following:

(a) Any single loan repayment should not exceed a third of the borrower’s income

(b) All combined loan repayments should not exceed half of the borrower’s income

(c) The price of the house ideally should be three times that of the borrower’s annual household income to be deemed as affordable based on a study by Harvard University and World Bank. A young couple with RM10,000 between them is equivalent to RM120,000 a year.

The value of the house that this young couple should be looking at is RM360,000 at the most.

Does a young person need help from parents to buy a house today?

It has become almost impossible for a fresh graduate to buy a property without parental support. Many condominiums are now launched in excess of RM500,000 even in suburban areas and landed properties in areas such as Kota Damansara are almost RM800,000 and above.

How is a fresh graduate with a starting salary of RM3,000 ever going to afford such properties?

Here are some numbers to chew on. The monthly repayment for a housing loan of RM450,000 (average condo price of RM500,000 less 10% downpayment) for 30 years is RM2,175. This is 72% of the fresh graduate’s monthly income of about RM3,000.

Fresh graduates will have to continue staying with their parents until both the parents and the borrower have saved enough money for a larger downpayment, or for the parents to withdraw their own EPF funds to help their children.

What about young people applying for government-linked projects like Perumahan Rakyat 1Malaysia (PR1MA)?

Some quarters have commented that young professionals still have the option to do that. PR1MA has just raised the ceiling price of their properties to RM450,000 and the maximum household income eligibility to RM7,500. Based on a study by Harvard University and World Bank, the ratings of the Value of Property over Annual Household Income are as follows:

Based on the above study, the Value of PR1MA properties are actually not affordable by international standards. In fact, it is between “Seriously” to “Severely unaffordable”.

Under PR1MA, the borrower need not pay the 10% downpayment and can take a 100% loan for the RM450,000 property.
We have illustrated a typical household income vs expense of a prospective PR1MA buyer (see table)

Hence, it would not be unusual for banks to reject PR1MA applicants for housing loans as many of them are buying far beyond their income eligibility. In other words, PR1MA properties are just too expensive. House Buyers Association (HBA) has suggested a price of between RM150,000 and RM300,000.

By this time, both dad and son are glad the conversation is coming to an end. There does not seem to be a happy ending though.

“What does this mean, Dad?”

“It means the Government must introduce further measures to reduce speculation in the property market. The Government must bring back the old formulae of real property gains tax, higher stamp duty for buyers of multiple properties, further reduction of loan to value ratio,” says Dad.

Start from zero! Another interesting approach by gen Y!

Today, I had the chance to read another book by a very own Malaysian Gen Y.

3 Years to a RM 10 million property portfolio by dexter Kim and WT Kam.

Another interesting approach and similar to faizul method. Both had used credit card as down payment but they are very disciplined to recover their loan on credit card which I personally think risky but they manage to do it.

Both of them had a very clear game plan in their hand. I like the way the projected to see how many property will they owned if they decide to take this route, etc. It give them clear target and develop the strategy to achieve it.

Although first I thought that these are young kids  will end up in trouble as they start buying property at the very young age and in a very orthodox way, I found one common thing that make these 2 gen Y survive and able to increase their portfolio to more than rm 5 million in less than 5 year.....

They have MENTOR..... They partnership with their mentor, leverage the experience and combine with their crazy idea... Boom... Cheaper, faster and better way!

Who would have imagine that to have rm10 million of property portfolio in 3 years is possible? Well, they prove me wrong..

Thank you for sharing the knowledge and the approached which definitely can be very useful in this era especially when property price are on the rise.

Pls download my property book today to learn more.

One alam jaya @ Bandar puncak alam, shah alam

Selamat hari raya and maaf zahir batin. Time fly so fast, it is already at the end of Ramadan. 2 hari lagi, umat Islam di Malaysia akan menyambut hari lebaran dan highway kini sibuk dipenuhi kenderaan yang mahu pulang berhari raya di kampung.

When I read through starproperty today, I saw one interesting advertisement on one alam jaya at Bandar puncak alam. Banglo unit are now fetching a price about rm 1.5 million. No joke.. and you know when the house are now reach these kind of price range, it going to be the next hotspot.

With Tesco puncak alam opening soon, all the houses and shoplot price will definitely increase. Good to those who had invest in early in this township.

I made some call to few agents to gauge what is the current price for shoplot near Tesco puncak alam. Sale price is now about rm900,000. Believe it or not, rental demand for those shoplots are now stands at RM 6000 for corner lot and for intermediate lot RM 4000. There are not many shoplot in the area, so guess that is why the demand is high. Mark my comment and this is 2013... Wait until 2016... I'll update what would be the price.

I read somewhere in the internet, with the current house price, any new graduate and started new career, there are likely unable to purchase their first house. Average income for new employee is around rm3000. With half of the salary gone to the housing loan, after deduction of car loan, daily groceries, etc, they only have rm 300 balance.

So, my advice, go back and draw your strategy on the drawing board and set your strategy right!

The Meridin@Medini by Mah Sing. Another icon tower at Iskandar Malaysia, Johor

Salam,

Yesterday was another tower launched by Mah Sing for  their first iconic tower at iskandar Malaysia. It is located right in the heart of Iskandar Malaysia opposite Pine Studio and minutes away from legoland.

The first phase was done via balloting where you have to pay rm10000 upfront to register for it. Despite the price of about rm 750 psf, the crowd turn up were full and 80% sold out snapped by local and Singaporean.

My analysis:

1. Iskandar Malaysia was well planned by the government to boast tourism and value of johor. A good zoning systems and clear demarcation  of Iskandar Malaysia would attract more investor in.

2. Strategic location near Singapore.
Singapore is known for it good economic and established name across the world. This has led to scarsism of land in Singapore which push up the property price up. A study conducted by cimb last year indicate rental in Singapore stood at USD 700 psf compared to Iskandar Malaysia which is around USD 300 psf.

3. 5 minutes drive to Singapore via 2nd link bridge.
Daily commute to singapore is now possible with it close proximity location. I would not be surprise if Iskandar Malaysia will turn into Singapore 2...

4. Major housing developer are in town.
Mahsing, Subway, khazanah, and many more established property player are embarking their portfolios at Iskandar Malaysia. These developers have a very good reputation in term of build quality and new township development. With Khazanah as the mastermind behind Iskandar Malaysia, I would not be surpise that this will be one of the new golden triangle in Malaysia

As a conclusion, Iskandar Malaysia will be the new Shenzhen of Malaysia. A good investment to consider.

Faizul Ridzuan.. 23 properties by 30. .. interesting book

Salam,

Just had the chance to read another property guru's, Faizul Ridzuan... aka propertywtf.. where to find?

Interesting story and commitment by him to owned 23 properties in about 10 years. An average Joe, but he has the will and determination knowing that he couldn't make a day end if continue working for other people.

Good insight and a very rare approach indeed. I have to salute him as he spend hours doing the research, observe the crowds and making each efforts counts. It takes a lot of stamina to get to his level. Even I could not do what he did. He did everything, from auction, nego. Subsale, property flip, etc. However, I  found some things are common when I read his book,

My analysis:

1. Keep learning from others.

 He made every attempt to learn from the best. Seminar, met the neighbors, buy books, network in forum. Etc.  I'm totally agree on this as I mentioned in my previous blog. Never stop learning. We came in so many path and no harm in learning from other experiences. It may or may not work for you, but with the  knowledge, you can make less mistake in buying a good property. It not cheap investment so, do it wisely. Plus, you will learn faster and even at par with the experts. This is why he can do it before reached 30.. 

2. Research, research, research

When come to buying property, you need to do a lot of research and assessment of each property that you would like to buy. 

He spends days just to observed who lives there, demographic population, etc. 

You need to have a good set success criteria to match your research study before you decide to invest. I'll explain in more detail in my ebook.

3. Clear goal and target

This is very important when you want to become a good property investor. You need to have a clear set of goal what do want to achieve, how long it will take and how are you going to do it... 

He set his target to achieved RM 3 million before 30. I have different sets of target. 

Once you have a clear target, the next step is how are you going to achieve it.. He goes for quantity but in my case I'll go for quality as I do not have a good stamina as him. Although I have less property than him, in general the achievement are similar.

So, in general there are few ways you can do it. Follow your game plan.

One thing that I learn from his book is that, build up a good network of friends. Be it the developers, bloggers, real estate agents, plumbers, contractors, etc. They have the additional skill that you may want to use or leverage. For example, I have a team of contractors that able to resolve my tenant problem, ie broken fridge, leaking roof, etc. It is just a phone call away and good service.   In fact, some of them have my tenant spare keys!.. just in case.

Mc Donald.. It is just a hamburger business? at Puncak Alam, Shah Alam..

Salam,

I'm still puzzled why Mc Donald would invest and set up an outlet at Puncak Alam considering the location is a bit far from KL. Normally, you'll see McD available at major township where it is always full of customers.

What differentiate Mc Donalds against the rest of other fast food outlet?

What make them so robust that they have survives for more than 30 years, more than 100 countries, 34,000 outlet and employs 1.7 millions employees?

What makes them so successful in term of making customers keep coming back to buy their burgers?

Why they invest at Puncak Alam?

It is just a burger! What is so special about it? Pls note that as a health conscious person, most of fast food product are not good for your health but I'm more interested to analyse Mc Donald business model with respect to property investment.

I was doing research on the internet and found a very interesting discovery. McDonald is actual a Real Estate  Property! This is how McDonald make their money. They have the best commercial property in the world and one of key success is selecting the right location, location, location.

In simplified terms, McDonald's makes money on real estate via 2 methods. First, it buys and sell properties. Often these are restaurant lots, but such is not necessarily alway the case. McDonald's will buy properties that it feels are, or will be, hot locations, and it of course sell properties that are under performing or otherwise not doing so well. Again, all of this seems normal.

Secondly, on top of the franchise fee ( normally 8%), which McDonald's charges its franchisees to use the 'McDonald's" name, it charges rent to the franchisees to use the corporately-owned properties.

My Analysis:

1. McDonald's survives because it has a very good internal system that every franchisees has to follow. Doing the same thing will get the same result!. If you eat fries at KL or Puncak Alam, I can bet you , no one will notice the differences. This is the key strength of McDonald's survival.

2. Good Location. This is maybe the number one reason or criteria for McDonald's to invest in a new place. Good location and accessibility will definitely create a good feeling and convenience to their customers. A strategy to operate 24 hours outlet will definitely targeted to night flyers and leaving the impression that McD's are always available when you're hungry...

It's just a burger!

3. A smart move by McDonald to replicate it's outlet so that every customer will experience the same situation regardless which outlet they go through. This will eventually leave a permanent good impression to their customer that McDonald's alway available, faster delivery and better option whenever I'm hungry in the middle of the night, I'll always get the same price, the same products and same taste. Although it may not be same at all!

4.Happy meal using toys as attraction to kids is another strategy used to attract more traffics. When you kids eats, wouldn't you start be eating too? Nice.

So, based on this, I'm seeing that the new Bandar Puncak Alam and Bandar Puncak Bestari will be the next hotspot in my list!

By the way, between KFC and McDonald's, which  do you think has more outlet and trusted brand?

Download my ebook and understand how you can use these successful strategy to pick you right property location.

Selection the right property location for investment. New township ! Case Study.

Dear all,

If you are familiar with Kuantan, especially  in the new township, bandar indera mahkota, most of house price are in the range of RM300,000 to RM 600,000. The property  price has double since 2010. And all these are are leasehold.

Bungalow land area in 2005 at Bukit Istana was only RM 16 psf , now the latest I heard, it was selling at RM 45 psf. 

These are my analysis why property price in this area keep on to appreciate at a faster rate:

1. The new completion of KMC (Kuantan medical center ).  

It located in 10 acre of land. One of the biggest private hospital in Kuantan. Fully owned by TDM, it is expected to start in full operation somewhere in October 2013.

2. McDonald.

Yes, you are right. The new completion of McD in 2011 has attracted more and more traffic to the area. As I mentioned in my puncak alam post, McD are very good in property investment.

3. New intelligent township, KotaSas. 

The new township will cater additional 50,000 residences and has it own commercial center. 

4. New Integrated Kuantan Terminal Sentral. ( Terminal Sentral Kuantan )

The new bus terminal situated right beside the dual lane carriage, is very strategic and move human traffic from the busy Kuantan Town to Bandar Indera Mahkota.

For long distance traveller, the new bus terminal is definitely much better than the existing ones.

5. The new integrated RapidKuantan bus.

This is excellent masterplan by the government. When RapidKuantan started  their operation in Dec 2012, the bus network has good coverage from Teluk Cempedak until Gambang Water Park. 

I have actually doubt whether this new bus system can actually work similar model to RapidKL. Well, after 5 months of free bus service, it seems that more Kuantan people are beginning to accept the change.

I only heard complaint from the taxi drivers!

It has added additional convenience to the residence in Bandar indera Mahkota.

6. The new Tunas Manja Boutique Hotel

Located at the heart of Bandar Indera Mahkota, once an empty place, the hotel draw many tourist to stay in the area. The Hotel room is much more affordable compare to Hyatt or Zenith Hotel.

Not just that, shoplot in that area also flourish as more and more human traffic are available.

7. New UIA campus for medicine and hospital. 

It is one of the biggest UIA campus outside kuala lumpur. It mainly set up to cater for medicine and pharmacy stream.

8. Sultan Ahmad Shah Mosque

One of the biggest mosque build by UIA. 

Jammed pack on every Friday!

9. Mature township of Bukit Istana, Alam Perdana and Astana Permai.

10. New golf course called Mahkota Golf Club construction in progress. Expected to open in 2014.

11. Last but not least, integrated government building such as Imigresen complex, kwsp, jabatan pendaftaran negara, and Bomba definitely will draw additional population here.

In conclusion, a well amenities, facilities and neighborhood with mature population will definitely make your investment worth to wait. You cannot go wrong with it.

My advice is that, you take a look at any mature town and define your success criteria for your investment.

My case study on Bandar Indera Mahkota is definitely worth to consider. 

When I bought my property here in 2010,  all these additional facilities were not known. 

However, one thing for sure, the area has excellent accessibility which in the end, turn out to be a good investment. This is one of the most important criteria in my location selection. I'll share with you more criteria in my ebook later on.

Do you have any other criteria? Pls share with me!

DIBS Scheme... Good for Investor... Bank Negara is involved!

Yes... It's official! I know some of us did not agree with me, but I'm a true believer that somebody has to pay if there is too good to be true kinda scheme.

It is always being my argument that, buying property without any money down is a speculation market.

Why?

1. You can buy 4-5 unit of property with no money down. Interesting, but in the end; it will screw the market true value. 

I have seen during my recent purchase, one lady came to the registration counter , stand beside me and bought 5-6 unit in one row.  I know it's a good buy, but what is the intent of buying 5-6 units at the same time? Purely speculation. With DIBS, you can actually make easy money  within 2 weeks.. I'll share later on how u can do this..

2. Because of the higher price, more people are not able to afford owing their own house. Some of them have to take 2nd generation loan. It will definitely burden the who has actually started to work.

3. I get less value from my investment. Compare RM500k with DIBS and Rm400k without DIBS, my yield would be higher if I buy property without DIBS as I pay less. 

" Less is More! "

Below are the extract from the star newspaper yesterday. Let me know what do you think?

Bank Negara is studying the risks arising from DIBS with a view of potentially imposing curbs on it

Posted on June 25, 2013 - Featured, Property News.

By GURMEET KAUR
gurmeet@thestar.com.my

PETALING JAYA: Bank Negara is studying the risks arising from the developer interest-bearing scheme (DIBS) with a view of potentially imposing curbs on it, sources said.

Although it is unclear if or when such curbs would be put in place, Hong Leong Investment Bank (HLIB) said that it may be “later this week”, adding that such a move would be a negative for future sales in the primary property market.

Other industry players think that the measures might be introduced in the second half of the year.

DIBS has become a popular easy financing package offered by property developers in joint-promotion activities with banks in recent years.

Under the scheme, buyers need not fork out much initial downpayment to buy properties, as the developer supposedly absorbs the initial interest. This is until the buyer takes possession of the property.

A high number of buyers enter this scheme with the intention of flipping the property when they gain possession of it, making a profit without having to come up with much capital in the process. Such a scenario fuels speculation.

“Typically, under the scheme, buyers only foot between 5% and 10% of the house price upon signing the sale and purchase (S&P) agreement and only begin payment when the project is completed,” a property consultant told StarBiz.

“There are caveats to this scheme, as buyers commit to a financial obligation upon the signing of the S&P and the interest cost has actually been already passed on to buyers via the higher selling prices.”

DIBS is mainly offered to the high-rise residential segment. Some property consultants have opined that the presence of DIBS in the market has caused prices to be set on an artificially higher trajectory.

Notably, the Singapore government banned DIBS in 2009.

“While the exact measures are yet to be revealed, we believe the curbs would impact this easy financing scheme,” HLIB said in a note yesterday.

According to analysts, most of the sales in the recent property bull cycle were tied to the attractive DIBS scheme at the expense of the secondary property market which has remained sluggish. And given the persistent rise in household debt, the Government is mulling over measures to limit it.

“In the recent past, Bank Negara has been compiling information on the scheme and studying its impact on the sector,” a source said.

Bank Negara had yet to respond to StarBiz’s queries as at press time.

“The difference between the non-DIBS and DIBS pricing can range from as low as 5% to as high as 30% if other incentives like early-bird discounts, stamp duty waivers and cash payments are taken into account,” said Elvin Fernandez, managing director of Khong & Jaafar group of companies.

He advocates regulators to compel developers to be transparent on the various incentives, as it may be difficult to do away with DIBS packages.

“Developers should inform buyers and bankers of the actual value of the discounts they are getting so that house buyers know the true value of the house they are buying,” he said.

UOB Kay Hian Research noted that new launches in selective high-rise projects in the suburbs of the Klang Valley were transacted at over RM1,000 per sq ft (psf) vis-a-vis RM450 psf two years ago.

“Household debt has risen to 80.5% of nominal gross domestic product as at end-December 2012, up from 60.4% as at end-2008.

“We also note that outstanding banking sector loans in the household sector has risen 3.6% year-to-date as at end-April to RM638.5bil from RM616.5bil as at December 2012. As the rise in consumer credit is partly linked to housing, curbs may be introduced to dampen speculation,” UOB Kay Hian said in a report yesterday.

On the financial impact of curbing DIBS on property companies, HLIB said that it would be “negative for future sales in the primary market but the extent of damage varies with the degree of exposure to the high-rise segment for each individual developer”.

UOB Kay Hian reckons that if DIBS or similar schemes were to be tightened, it could “significantly dampen new property launches as speculators will be filtered out”.

The company also does not rule out the possibility of a further upward revision in real properties gains tax (RPGT) to dampen speculation.

In Budget 2013, the Government had raised the RPGT for the second time since 2011, stipulating a 10% to 15% tax for the disposal of properties within two years of purchase, and 5% to 10% for the disposal of properties within three to five years. However, properties sold five years after purchase are exempted from the RPGT.

Why invest in property?

Salam,

Today, I had the chance to drop my wife to her favorite spa, HERBALINE. Very nice place and relaxing environment. The staffs were very nice and kind.

While I was there, I was offer to do my own spa... FISH Spa! .. My very first time.. It was fun.. Got to do it again. Since the fish were very eager to nimble my feet, I have a few thought on why we all should start to invest in property..

1. Good hedging against inflation

Property has been proven a good hedging against inflation which is currently higher than 3-4% inflation rate per year 

2. Slow but surer become RICH

Property is something very boring, slow but on thing for sure.. Over time, if you invest in the right place, you will be higher chance to become rich. Look at Donald trump, he build his empire with property.

Since I started my investment 10 years ago, I have seen my properties have double and triple its value from my initial investment. These property going the odd even during economic crisis in 2003 and 2008. 

3. Excellent leverage - pay less than 20%, you own 100%.

This is the only investment vehicle that you pay RM10,000, you can own RM100,000. Bank are willing to lend their money to you as long you have a good track record.

4. You work only once, your property work for you forever..

With holding your property for a period of time, your property will appreciate in it's value. Not only it appreciate, if you rented you property, you will get positive cash flow and your tenant pays for all the loan from the bank.

This is the best leverage where your tenants are working hard for you to pay the bank. Interesting huh?

5. Growing with corporate ladder vs Growing with property investment.

I am sure that most of us work for somebody to meet our days end. It is not wrong but the higher you go up on corporate ladder, you have less time with your loves ones, yourself and under stress at all time to met stakeholder expectation.

Take an example, our Prime Minister, Najib Razak. If you see his schedule and his involvement to lead the our country, he isis very busy including weekend! I still remember someone say to me that Dr Mahathir Mohamed only sleep about 4 hours per day.. Do you want to be in that position? 

It is different with property. It gets easier each day with property. You still get your money when you sleep which I call, passive income!

Tenants work for you, your property work for you, and your bank work for you!  What does this all mean? It mean that you have more time for yourself and able to do what you love!