Identify who is your target tenant. Whether they are university, college students, lecturer, admin/workers, factory workers, expatriate and etc. This will help you to identify where are the targeted areas that you should survey on later.
Focus on the targeted areas identified for example my targeted tenant is Penang USM local/foreign students, then my targeted areas will be where normally they choose to stay. After some survey and talking to housing agents, I'll focus on areas like Batu Uban (foreign students especially from Arab), Jalan Sungai Dua (mostly local) and Jalan Bukit Gambier.
Find out and list down the apartments/condominiums options available in the targeted areas that meet you budget and where your targeted tenant is looking for. Of course make sure the property provide good rental too so that you have positive cash flow and good yield (<2x of fix deposit). Start looking for ads in newspaper, I found that Kwong Wah newspaper on Friday/Saturday and Monday have the most Penang housing ads coverage. I started to keep these newspaper ads 3yrs ago in order to keep a record on how is the pricing go for the interested property and decide whether the recent advertised property is worth buying.
Call housing agents to check out the properties and viewing of the properties. The frequent questions I'll ask including pricing, which floor, is it furnished, if yes, what are the furniture avaiable, how many car park, owner occupied or tenanted. How much is the rental if tenanted. Survey the sorrounding and enviroment of the property before and after viewing at different time and day to ensure you don't miss out anything at that area which only happened at particular time and day for example pasar malam on Friday evening.
After you found the property for investment, negotiate the price, go into the legal procedure and hope you become the landlord 3months later.
Monday, June 22, 2009
Saturday, June 6, 2009
My experience and tips in Property Sub Sale Procedure
Confirm Property, Pay Earnest Deposit and Sign Booking Contract- After the buyer decided on the property to purchase and confirm the price with seller. Buyer (purchaser) and seller (vendor) will need to sign the booking contract prepared by the housing agent and buyer pays booking fee (min 1% or more). The booking contract stipulated clearly identification of the property and its terms and conditions including seller and buyer right to confiscate booking fee or compensation.
My experience was we need to calibrate what is the next step buyer or seller can take (refund, cancel transaction etc..) if the developer of a strata title units which individual title is still not available found to be winding up or involved in a legal petition that might cause the developer to wind up before the S&P transaction completed.
Applying Loan- If the buyer borrows to finance the purchase then buyer will need to look for a loan from bank (government for civil servants).
Considerations of loan package including how long is the loan, some banks offer up to age 70/75 or 35yrs loan which ever earlier, interest rate, term loan or flexi loan, tie in period, early settlement penalty and etc. I'll make sure monthly loan installment plus service charge <>
Appoint Solicitors, Sign S&P and Loan Documents- While applying loan, buyer/seller can appoint solicitor(s). Solicitor will conclude the details of S&P within a prescribed time agreed by the parties. Upon signing of S&P, buyer will pay the balance of the 10% deposit for 90% loan. Buyer sign loan offer letter and loan agreement after loan approved by bank. Prior signing S&P, normally searches will be done by solicitor include title search, official bankruptcy, CTOS search on vendor, acquisition and assessment search.
Full purchase price released to vendor and vacant possession delivered to purchaser- Transaction process completed and bank release 90% of remaining purchase price to vendor within 3 months from the signing date of S&P. Need to take note of the definition of this 3 months period in S&P, when the clock start and end because interest incurred when buyer request 1 month extension.
My understanding was if unit has individual title or non strata, the 3 months start from the date of signing S&P but for strata with master title, the 3 months period is from the date consent received from developer. Work with your solicitor to under detail of the clause.
We can also consider requesting a join inspection of the property right before the 90% balance released to vendor.
Take possession of property upon full payment and handover of keys. For our convenience, make sure solicitor help and attend to change of name in assessment, quit rent, Indah water, TNB and PBA of the said property.
My experience was we need to calibrate what is the next step buyer or seller can take (refund, cancel transaction etc..) if the developer of a strata title units which individual title is still not available found to be winding up or involved in a legal petition that might cause the developer to wind up before the S&P transaction completed.
Applying Loan- If the buyer borrows to finance the purchase then buyer will need to look for a loan from bank (government for civil servants).
Considerations of loan package including how long is the loan, some banks offer up to age 70/75 or 35yrs loan which ever earlier, interest rate, term loan or flexi loan, tie in period, early settlement penalty and etc. I'll make sure monthly loan installment plus service charge <>
Appoint Solicitors, Sign S&P and Loan Documents- While applying loan, buyer/seller can appoint solicitor(s). Solicitor will conclude the details of S&P within a prescribed time agreed by the parties. Upon signing of S&P, buyer will pay the balance of the 10% deposit for 90% loan. Buyer sign loan offer letter and loan agreement after loan approved by bank. Prior signing S&P, normally searches will be done by solicitor include title search, official bankruptcy, CTOS search on vendor, acquisition and assessment search.
Full purchase price released to vendor and vacant possession delivered to purchaser- Transaction process completed and bank release 90% of remaining purchase price to vendor within 3 months from the signing date of S&P. Need to take note of the definition of this 3 months period in S&P, when the clock start and end because interest incurred when buyer request 1 month extension.
My understanding was if unit has individual title or non strata, the 3 months start from the date of signing S&P but for strata with master title, the 3 months period is from the date consent received from developer. Work with your solicitor to under detail of the clause.
We can also consider requesting a join inspection of the property right before the 90% balance released to vendor.
Take possession of property upon full payment and handover of keys. For our convenience, make sure solicitor help and attend to change of name in assessment, quit rent, Indah water, TNB and PBA of the said property.
Tuesday, June 2, 2009
Frequent property investment question: what is the property price and rental?
Frequent property investment question was how much is the property and what is the rental to determine whether it is worth investing and able to generate positive cash flow. In addition, we were always told to buy property below market price but the question is what is market price and rental of the property we are interested to invest?
The property price and rental information contained in the Property Market Report 2008 from JPPH Ministry of Finance Malaysia which the data presented by state was based on actual 2008 transactions done is useful as a guide to to these questions even though some of the properties price and rental might have already increased by now 2009.
I listed sample data with top 10 transactions (Penang Island) in the report below.
Apartment
-N-Park s/s:24 140-177k (+4.4% compared to 2007)
-Ratu Mutiara s/s: 20 228-398k (-7.6%)
-Sunny Ville s/s:20 170-270k (+7.8%)
-Putra place s/s:200-260k (+8.0%)
-Desa Permata s/s:17 115-130k (stable)
-E-Park s/s:15 180-245k (-1.2%)
-Villa Emas s/s:15 198-250k (4.4%)
-Taman Desa Relau II s/s:15 130-150k (+3.5%)
-Desa Green s/s:14 98-134k (2.3%)
-Pearl Garden s/s:13 218-285k (+2.8%)
Double storey terrace prices range
-Taman Sunway Bayan s/s:11 480-582k (11.4%)
-Taman Tunas Damai s/s:9 515-545k (ND)
-Island Glades s/s:8 435-600k (+11.8%)
-Island Park s/s:7 468-550k (+13.9%)
-Taman Sri Nibong s/s:6 550-600k (+13.3%)
-Taman Desa Ara s/s:5 405-500k (+18.6%)
Based on example above, landed double storey appreciated a double digit (>10%) while apartment appreaciated in single digit. Big sample size data happened in Bayan Baru areas.
Sample of Penang Island Apartment rental data:
-Desa Permata 420-450RM (stable)
-E-Park 950-1200RM (stable)
-Ratu Mutiara 1500-1600 (stable)
-Sunny Ville 1000-1200 (stable)
-Putra Place 1000 (+5.3%)
The property price and rental information contained in the Property Market Report 2008 from JPPH Ministry of Finance Malaysia which the data presented by state was based on actual 2008 transactions done is useful as a guide to to these questions even though some of the properties price and rental might have already increased by now 2009.
I listed sample data with top 10 transactions (Penang Island) in the report below.
Apartment
-N-Park s/s:24 140-177k (+4.4% compared to 2007)
-Ratu Mutiara s/s: 20 228-398k (-7.6%)
-Sunny Ville s/s:20 170-270k (+7.8%)
-Putra place s/s:200-260k (+8.0%)
-Desa Permata s/s:17 115-130k (stable)
-E-Park s/s:15 180-245k (-1.2%)
-Villa Emas s/s:15 198-250k (4.4%)
-Taman Desa Relau II s/s:15 130-150k (+3.5%)
-Desa Green s/s:14 98-134k (2.3%)
-Pearl Garden s/s:13 218-285k (+2.8%)
Double storey terrace prices range
-Taman Sunway Bayan s/s:11 480-582k (11.4%)
-Taman Tunas Damai s/s:9 515-545k (ND)
-Island Glades s/s:8 435-600k (+11.8%)
-Island Park s/s:7 468-550k (+13.9%)
-Taman Sri Nibong s/s:6 550-600k (+13.3%)
-Taman Desa Ara s/s:5 405-500k (+18.6%)
Based on example above, landed double storey appreciated a double digit (>10%) while apartment appreaciated in single digit. Big sample size data happened in Bayan Baru areas.
Sample of Penang Island Apartment rental data:
-Desa Permata 420-450RM (stable)
-E-Park 950-1200RM (stable)
-Ratu Mutiara 1500-1600 (stable)
-Sunny Ville 1000-1200 (stable)
-Putra Place 1000 (+5.3%)
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