-Issue a notice of demand: Issue a notice demanding for arrears, specifying the particular breach and entailing the tenant to remedy the same. Yee's experience was issue a first reminder, followed by s sterner 2nd reminder, the 3rd latter warns of legal action
-Setup an instalment or deferred payment plan:grant case by case basis. Yee:"It depends on the character of the tenant" [Only] if we feel that the tenant is genuine and can be trusted.
-Go to the tenant's work place:Mary Anne reckons it is effective to demand payment from your tenants at their work place.
-Be very firm with your tenants:It's important to show your tenants that you are determined to weed out bad paymasters.
-Forfeit rental deposit:If deposits paid are not sufficient to cover the full arrears of rent, however, one can consider taking legal action. "The landord can sue for the amount owed by the tenants, based on the tenant's covenants to pay under the tenancy agreement".
-Evict the non paying tenant:There are times when you would need legal assistance to evict a tenant. If your tenant overstays, you can apply to the court for an eviction oder, say Chris.
Ariticle summarized from Personal Money, Aug 2009
Sunday, August 16, 2009
Saturday, July 18, 2009
University Place Bukit Gambier June09 data
My uncle from Germany wanted to invest in property in Penang, I introduced him university place, along Bukit Gambier in Penang Island as an option to consider. We have viewed a few units during his 2 weeks stay in Penang late June09. I have summarized it as below for your ref.
unit#1: high floor >20th, asking price is RM330k, come with 2 car parks, fully furnished, a lot of the furnitures are not built-in, normal kitchen cabinat and old sofa. Very expensive. The unit is vacant now.
unit#2: high floor >20th, asking price is RM340k with 1 car park, fully furnished, very nice and clean english style decoration. negotiated to RM325k. owner stay now.
unit#3:middle floor<20th, asking price is RM295k with 1 car park, fully renovated and funished, tenanted at RM1500k.
unit#4: high floor>30th, asking price is RM300k with 2 car-park, it was an show house before, fully furnished and renovated, all built-in cabinet and kitchen, currently tenanted at RM1600. Offered made at RM300k but sold at RM305k the next day to other buyer.
unit#5: high floor>20th, asking price is RM280k with 1 car park, 1st and 3rd bedroom with built-in cabinets, 2nd bedroom with built-in study table, no sofa, built-in kitchen cabinet is ok, come with 1 air-cond. owner occupied and moving to landed house.
So, unit#3 and unit#4 worth considering to invest with positive cash flow. unit#4 already sold and my uncle did not purchase unit#3 because the floor number is not "chinese friendly".
unit#1: high floor >20th, asking price is RM330k, come with 2 car parks, fully furnished, a lot of the furnitures are not built-in, normal kitchen cabinat and old sofa. Very expensive. The unit is vacant now.
unit#2: high floor >20th, asking price is RM340k with 1 car park, fully furnished, very nice and clean english style decoration. negotiated to RM325k. owner stay now.
unit#3:middle floor<20th, asking price is RM295k with 1 car park, fully renovated and funished, tenanted at RM1500k.
unit#4: high floor>30th, asking price is RM300k with 2 car-park, it was an show house before, fully furnished and renovated, all built-in cabinet and kitchen, currently tenanted at RM1600. Offered made at RM300k but sold at RM305k the next day to other buyer.
unit#5: high floor>20th, asking price is RM280k with 1 car park, 1st and 3rd bedroom with built-in cabinets, 2nd bedroom with built-in study table, no sofa, built-in kitchen cabinet is ok, come with 1 air-cond. owner occupied and moving to landed house.
So, unit#3 and unit#4 worth considering to invest with positive cash flow. unit#4 already sold and my uncle did not purchase unit#3 because the floor number is not "chinese friendly".
Friday, July 10, 2009
Tips from Soon on HOW TO SCREEN GOOD BUYS FOR AUCTION PROPERTIES
I come across this article written by Soon on Livintrend magazine about tips on aution properties and would like to share with you.
“Fristly, you need to know if the auction property that you are interested to bid is occupied. If the unit is unoccupied , taking over possession will be relatively easier than those being tenanted or owner occupied.”
“For tenants who expressed their intention to continue renting after the sale is completed, the new owner will be saving time and cost to look for tenants!”
It is better to reconsider bidding for a property that is owner occupied. Although this scenario consists of some workable solutions, Soon advised seeking for proper assisstant before bidding.
“Do not wait for the price to drop if you think that the reserve price is fit to bid because the lower price will attract more buyers to bid. Eventually the selling price will be sold higher than the previous reserve price!”
Since the different bank have different conditions of sale, Soon said, “You must know who is absorbing previous owner’s arrears such as quit rent, assessment and maintance charge up to the date of auction.
“Generally, most banks will absorb the developee’s arrears but not th utility charges like telephone, electricity and water bills.”
“For the banks that are not responsible for any of the above, check on the arrears from the relevant authorities, developer and land office. You must take note that certain auction properties are still a good buy after add on the arrears”
Source: LIVINTREND (www.livitrend.com)
“Fristly, you need to know if the auction property that you are interested to bid is occupied. If the unit is unoccupied , taking over possession will be relatively easier than those being tenanted or owner occupied.”
“For tenants who expressed their intention to continue renting after the sale is completed, the new owner will be saving time and cost to look for tenants!”
It is better to reconsider bidding for a property that is owner occupied. Although this scenario consists of some workable solutions, Soon advised seeking for proper assisstant before bidding.
“Do not wait for the price to drop if you think that the reserve price is fit to bid because the lower price will attract more buyers to bid. Eventually the selling price will be sold higher than the previous reserve price!”
Since the different bank have different conditions of sale, Soon said, “You must know who is absorbing previous owner’s arrears such as quit rent, assessment and maintance charge up to the date of auction.
“Generally, most banks will absorb the developee’s arrears but not th utility charges like telephone, electricity and water bills.”
“For the banks that are not responsible for any of the above, check on the arrears from the relevant authorities, developer and land office. You must take note that certain auction properties are still a good buy after add on the arrears”
Source: LIVINTREND (www.livitrend.com)
Monday, June 22, 2009
Process and experience for buying investment property
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.
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.
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%)
Saturday, May 30, 2009
Penang Property Sales Data Q3 2008
Penang property sales data Q3 2008 summary in term of value of transactions by property sub-sectors, # of residential property transactions and # of residential property transactions for Penang Island only.
For value of transactions: -Penang Q3'08 property sales slightly dropped -1.5% (1646mil) compared to Q2'08 (1671mil) and increased 4.1% compared to Q3'07 (1581mil). -Residential property remains to be the main sectors contributing 58.2% followed by 13.9% on commercial property.
In term of numbers of residential property transactions:
-Up trend: increased from 3749 transactions in Q2'08 to 4138 transactions in Q3'08 (+10.38%)
-Flat contributed the most numbers of transactions (841/4138: 20.3% in Q3'08)
For value of transactions: -Penang Q3'08 property sales slightly dropped -1.5% (1646mil) compared to Q2'08 (1671mil) and increased 4.1% compared to Q3'07 (1581mil). -Residential property remains to be the main sectors contributing 58.2% followed by 13.9% on commercial property.
In term of numbers of residential property transactions:
-Up trend: increased from 3749 transactions in Q2'08 to 4138 transactions in Q3'08 (+10.38%)
-Flat contributed the most numbers of transactions (841/4138: 20.3% in Q3'08)
Numbers of transactions only in Penang Island:
-Up trend: from 2344 transactions in Q2'08 to 2531 transactions in Q3'08 (+7.98%)
-Top 3 transaction involved flat, condo/apartment and low-cost flat
-Penang island only transaction made up of 61-63% of total transaction in whole Penang state
Source: http://www.jpph.gov.my/ (Jabatan Pernilian Dan Perkihdmatan Harta-Kementerian Kewangan Malaysia). Full detail report: http://www.jpph.gov.my/V1/pdf/q308Pulau_Pinang.pdf
Penang Property Web Sites Links
Below is the list of Penang based/focused property web sites that provide properties related online services and information. Some are with blog and forums.
Popular Penang Property forums at http://www.apartment-penang.com. Choose the property forum you would like to participate by clicking the property name at the right site of the page
http://www.penangproperties.com/apartment/- very informative web site from PEN PROPERTIES which provide information on the selected property for example its location, year completed, tenure, # of bedroom, built-up, facilities and with photos.
http://www.fullhouse.com.my/- Fullhouse.com.my is a local website that provides property-related services online. Included blog with latest, top focused and archived property related newsletter and article and Forum with multiple real estate topics for examples forum discussing about new projects, real estate advice, investment hot tips with internation participant.
http://iproperty.com.my/- with feature development/project news, property articles and properties listing. Ask the iExpert feature available whereby you can submit your question and iExpert will try to answer you online.
Penang based real estate agency property listing website which could assist you to sell or find your real estate property and other services/information.
-http://penang-property.com/ (PEN PROPERTIES real estate agent)
-http://www.mydreamhouse.com.my/ (Dream House Properties)
-http://www1.intproperties.com/ (I&T)
-http://www.e-properties2u.com/ (e-Properties)
-http://www.leonghousing.com/ (Leong Housing Agency)
-http://www.sincerehome.com.my/ (Sincere Home Properties)
-http://www.haisoonprop.com/ (Hai Soon Properties)
-http://www.penangproperty.com.my/
-http://henrybutcherpenang.com/
-http://www.careypenang.com/
-http://reapfieldpropertiespenang.com/
-http://www.properties188.com/index.html
-http://www.penangcentral.com/Penang-Property.html
-http://www.myhoom.com/
-http://www.getan.com.my/agency.html
Popular Penang Property forums at http://www.apartment-penang.com. Choose the property forum you would like to participate by clicking the property name at the right site of the page
http://www.penangproperties.com/apartment/- very informative web site from PEN PROPERTIES which provide information on the selected property for example its location, year completed, tenure, # of bedroom, built-up, facilities and with photos.
http://www.fullhouse.com.my/- Fullhouse.com.my is a local website that provides property-related services online. Included blog with latest, top focused and archived property related newsletter and article and Forum with multiple real estate topics for examples forum discussing about new projects, real estate advice, investment hot tips with internation participant.
http://iproperty.com.my/- with feature development/project news, property articles and properties listing. Ask the iExpert feature available whereby you can submit your question and iExpert will try to answer you online.
Penang based real estate agency property listing website which could assist you to sell or find your real estate property and other services/information.
-http://penang-property.com/ (PEN PROPERTIES real estate agent)
-http://www.mydreamhouse.com.my/ (Dream House Properties)
-http://www1.intproperties.com/ (I&T)
-http://www.e-properties2u.com/ (e-Properties)
-http://www.leonghousing.com/ (Leong Housing Agency)
-http://www.sincerehome.com.my/ (Sincere Home Properties)
-http://www.haisoonprop.com/ (Hai Soon Properties)
-http://www.penangproperty.com.my/
-http://henrybutcherpenang.com/
-http://www.careypenang.com/
-http://reapfieldpropertiespenang.com/
-http://www.properties188.com/index.html
-http://www.penangcentral.com/Penang-Property.html
-http://www.myhoom.com/
-http://www.getan.com.my/agency.html
Friday, May 29, 2009
Penang Property-Why Property Investment?
Passive income is different from active income whereby you have to exchange your time to money, it is generated even though you do not actively work on it. The book "The Parable of the Pipeline" by Burke Hedges explains the concept of making passive income streams very well. There are several ways or investment vechiles to generate passive income streams toward financial freedom for example rental properties that give you positive cash flow, fixed deposit, stock dividend, bond, mutual fund, internet marketing, royalties from book or song you have written, franshising etc..
There are 2 strategies in property investment. To gain higher returns with in short period through flipping (look for reputable developer, higher risk and need to have holding power if something unforeseen happened) or want to become financial independent through rental income. My current strategy is the later which is rental income as the source of passive income.
Additional considerations that I choose property investment as my main investment vechile/strategy:
-Make my money work harder for me
-It is with acceptable/not high risk and with stable and predictable return
-Not time consuming, only need to look for the property once and rent it out. Based on my experience so far with good tenant, I did not do anything for ~2yrs but only monitor the rental bank in to account monthly
-Appreciation and let inflation to work for you. The cost to build a building or house will not be the same today vs 20yrs later with all the material, labour etc..cost increase over time
-Practice and make use of the leveraging concept. With minimun let say 10% downpayment, we are able to own the property and start getting tenant to work for us
-Serve as our retirement fund or children education funds
There are 2 strategies in property investment. To gain higher returns with in short period through flipping (look for reputable developer, higher risk and need to have holding power if something unforeseen happened) or want to become financial independent through rental income. My current strategy is the later which is rental income as the source of passive income.
Additional considerations that I choose property investment as my main investment vechile/strategy:
-Make my money work harder for me
-It is with acceptable/not high risk and with stable and predictable return
-Not time consuming, only need to look for the property once and rent it out. Based on my experience so far with good tenant, I did not do anything for ~2yrs but only monitor the rental bank in to account monthly
-Appreciation and let inflation to work for you. The cost to build a building or house will not be the same today vs 20yrs later with all the material, labour etc..cost increase over time
-Practice and make use of the leveraging concept. With minimun let say 10% downpayment, we are able to own the property and start getting tenant to work for us
-Serve as our retirement fund or children education funds
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