Nak kongsi sedikit artikel yg ditulis oleh Azizi Ali tentang pelaburan hartanah khususnya di US.
The riskiest element in investing
I wrote about the advertisements in the media about investing in properties in the US in the July issue of Malaysian Business. In it, I shared seven points as to why all of us should be careful before doing so. While there is no doubt that property prices there are lower than two years ago, there are still a lot of risks for us to take the plunge. One of it is that prices still have some way to go before stabilising. In fact, many experts are predicting that prices will drop further from the current levels.
While the seven points that I mentioned in the article are already a lot, it turned out that there is at least one more point that we should consider. My good friend and fellow columnist of this magazine, Bill Wermine, sent me an e-mail about his thoughts on the matter. Being an American himself, Bill knows a lot more about the country than most of us. It turns out that even he himself would be wary of investing in the US because of all the seven points that I mentioned, plus an additional point.
Let me share Bill’s e-mail with you:
I read your article about the pitfalls in investing in US property. It was an excellent article.
There is another downfall which in my opinion is crucial and most Malaysians are ignorant – property taxes.
All over America local and state governments are facing budget shortfalls. A way they are raising money is to go after property owners by raising property taxes and fees related to property.
As a house is visible, it is impossible to hide from tax authorities – unlike gold. If you do not pay the property tax, in some states the government can seize the house. Each of the 50 states has different tax laws, and property is taxed by the state unlike federal taxes where taxes rates are uniform. Property taxes are much higher than Malaysia. Your home would incur a tax of at least USD50,000 a year if in New York, New Jersey or Massachusetts. I am sure you only pay a fraction of this.
I’m paying a property tax of only RM600 per year (quit rent plus assessment) for my house (about 2,200 square feet) in Ampang Jaya. A comparable house in an area close to a city in Maryland would be at least USD800 per month.
The 50 different state property tax laws are a minefield of confusion and penalties. Before buying a US property a buyer would need to consult with a property tax lawyer – and these fellows are not cheap.
Any Malaysian investor buying a property in America is a sheep waiting to be slaughtered by the tax collector vultures who wait for their prey.
Even me as an American would never venture in a US property unless I lived there and needed a roof over my head. Were you aware of the tax situation regarding property in the US?”
My answer to Bill is that I wasn’t aware of the high property taxes myself.
Now this only adds to the already long list of complications that awaits anyone who wants to invest there. I’m willing to bet that there are even more points that will only make things worse.
This is why I always caution my coaching clients, readers and seminar attendees to be very careful before investing overseas. While the investment itself may look lucrative and profitable, often time, there are hidden dangers and traps that lie unseen. The high property taxes in the US is just one example. We in Malaysia do not even consider property taxes when buying properties. So we assume that the same thing applies in other countries. But this assumption is dangerous and often costly. Many things that are normal here are not applicable elsewhere. Many fees that are low here are nose-bleedingly high in other countries. Often time, traps like these have led investors to lose a lot of money.
The riskiest element is the investor himself
This brings me to the main point of this article – the riskiest element in investing is not the investment. Actually, the riskiest element is the investor himself. <
I have seen, and I’m sure you have as well, people losing money from the safest of investments. At the same time, I’ve seen people making money from the riskiest of investments. While there are many reasons for this, a common thread why people lose money in ‘safe’ investments is because they know very little about the investment. Often time, they know nothing about it all. They made the investment because someone they know made the same investment. Or they were talked into it by a salesman. And usually such blind-faith investing does not end well.
Now while an investment can be safe, it does not mean you do not have to learn about it at all. Just because it is categorized as a ‘safe’ investment does not mean you will definitely make money investing in them; that all you have to do is to deposit money and then the investment will do the rest and dish out the returns tomorrow.
Actually, if you know very little about it, even a safe investment will turn out to be a risky proposition for you. If you do not know how the investment makes money, who the managers of the fund are, their fees, the track record and the future prospect of the investment, how can you expect to make money from it consistently? Wouldn’t it be like expecting to track across Taman Negara without any equipment, guides, training or even knowledge on jungle survival? In all likelihood, you will be lucky to come out from the jungle alive!
However, if you took a course in jungle survival, you would have increased your chances significantly. If you brought all the relevant equipments – compass, Sat Nav, food, water, parang – you would increase your chances further. And if you brought along two Orang Asli guides with you, I believe that you would appear on the other side of the jungle not only in one piece but ready to write a book about your experience!
Educate yourself on money matters
Likewise, your chances of making money from an investment would have increased significantly by educating yourself about it. You can do this easily by reading a few books on the subject matter, attending seminars on it, observing others and learning from the true experts. While this is no guarantee of success, it is clear that your batting average would rise with the knowledge.
One example of a risky investment is property auctions. If you don’t know what you are doing, you can get seriously burnt. So it is a risky proposition for most people. However, if you know what to do and what not to do, there are plenty of opportunities for you here!
Inisiatif yang baik untuk mereka yang layak. Jadi jangan lepaskan peluang. Terdapat sedikit perubahan polisi yang membolehkan lebih ramai yang layak untuk memiliki rumah pertama. Ini antara good news yang terawal untuk tahun 2013 bagi mereka yang ingin melabur dalam bidang hartanah dan seterusnya memiliki hartanah rumah pertama.
Income limit eligibility for My First Home up to RM5,000
KUALA LUMPUR: The income limit of individual borrowers for My First Home Scheme (SRP) will be increased from RM3,000 to RM5,000 per month effective January 2013.This enhancement was one of the SRP’s eligibility criteria slated for improvement under Budget 2013’s announcement last year, Cagamas SRP Bhd said yesterday.
For joint borrowers, it said the income limit had been increased up to RM10,000 per month, subject to the individual borrower’s income not exceeding RM5,000 per month.
“In addition, the requirement for a savings record equivalent to three months installment and minimum employment of six months will be abolish,” Cagamas SRP said.
It said the scheme allowed homebuyers to obtain 100% financing from participating banks, enabling them to own a home without having the need to pay a 10% downpayment.
“Cagamas SRP will guarantee the initial 10% of the loan under the scheme,” it added.
Cagamas was mandated in 2011 to play an active role of helping young, working Malaysians in the private sector to own their first homes under the SRP. — Bernama
Apakah pelaburan yang membolehkan anda yang hanya mempunyai modal RM7,200 dan ingin mencapai target RM100,000 selepas 25 tahun?
Formula matematik menunjukkan anda perlu mencari pelaburan yang boleh memberikan pulangan sekurang-kurangnya sebanyak 11.1% setiap tahun untuk 25 tahun akan datang. Terdapat beberapa pilihan pelaburan iaitu hartanah, unit trust, saham, ASB, simpanan deposit, emas dan skim cepat kaya. Yang mana satu pilihan anda.
1) Hartanah. Modal RM7200 tidak cukup. Perlu sediakan deposit 10%, caj peguam, setem duti, bil utiliti, cukai tanah dan sebagainya.
2) Unit trust. Berdasarkan rekod Public Ittikal, untuk tempoh 15 tahun memberikan pulangan 300%, tempoh 10 tahun pulangan 204%, tapi tempoh 5 tahun lepas pulangan hanya 17%. Ini menunjukkan, kadar pulangan sangat bergantung kepada entry timing. Peluang mencapai target 50/50, seperti juga pelaburan saham.
3) Saham. Kadar volatiliti yang sangat tinggi. Anda mungkin bernasib baik atau sebaliknya. Tapi peluang untuk mencapai target tetap ada. Saya meletakkan peluang 50/50.
4) ASB. Terlalu sukar dan hampir mustahil. Sejak akhir-akhir ini, ASB hanya memberi pulangan sekitar 7% – 8% sahaja.
5) Simpanan deposit. Terlalu mustahil kerana trend kini, pulangan hanyalah 2% – 3.8% sahaja.
6) Emas. Perlu imaginasi yang tinggi. Harga emas kini adalah sekitar RM180 segram, jadi anda perlu yakin yang harga emas akan mencecah RM2,500 segram 25 tahun akan datang. Ini bermakna, untuk 10 gram emas (berat biasa perhiasan emas), harganya akan mencecah RM25K.
7) Skim cepat kaya. Kemungkinan anda jadi cepat miskin.
Jadi yang mana satu pilihan anda?
Saya memilih pilihan yang ke-8 iaitu Loan ASB. Bayaran bulanan RM600 untuk tempoh 25 tahun. Dengan dividen 7% setahun, hasil dividen digunakan semula untuk membayar ansuran bulanan tahun ke-2 dan seterusnya. Hanya untuk tahun pertama sediakan RM7200. Kini Maybank menawarkan semula loan islamik ASB. Saya agak yakin, dividen 7% – 8% boleh dikekalkan oleh PNB untuk 25 tahun akan datang, kerana majoriti aset-aset dan pelaburan-pelaburan dana ASB memberikan dividen melebihi 10%.
Lama saya tidak menulis sebarang post untuk blog…sebenarnya buat masa ini terlalu bz melakukan eksperimen utk study phd saya…jadi tu yg agak kurang menulis sebulan dua ini…masih belum dapat sesuaikan diri dgn time management yg baru…
Travel…nak kongsi juga…airasia dan airasia x baru saja habis promosi mega sales…saya sempat beli tiket ke tehran, return RM673 sahaja…ini trip utk Mei 2013…tapi destinasi sebenar adalah istanbul…dari tehran sambung flight ke istanbul dengan pegasus…anda bagaimana?
Hartanah pula…baru masukkan cek jualan 1 unit tahun 2011…perlu ada kesabaran menunggu, kerana hasil jualan kena tunggu 1 tahun dalam bidang hartanah ni…profit sekitar 50 – 60% untuk unit ni, tempoh 2 tahun….syukur…
Ini petikan artikel daripada Azizi Ali:
Malaysian investors are a lucky lot today: there are a lot more investment options when compared to 20 years ago. These include unit trusts, direct stock investment, private businesses, futures, options, commodities, precious metals and of course, the old faithful, properties.
While having more options is good, it can also confuse the average investor. He has only so much money but all of the aforementioned investments appear to be good. So which one shall he choose? The people selling the investments are all saying that theirs is the best, and lo and behold, they can even prove it with facts and figures. “Invest with us, and all your dreams will come true!” This being the case, it is perhaps no surprise that many investors are at a loss on where to put their money.
Let me now shine a little light into the subject matter, which may help you to make better investment decisions.
Firstly, I must admit that I often cringe when I hear individuals wanting to try out forex (ditto applies to futures, options and commodities). While it is not rocket science, forex is certainly more complicated than buying and selling properties. I’ll throw in some terms so you’ll get a taste of the action: bid, ask, spread and pips (no, I’m not kidding – pips is short for Percentage In Point). If you don’t know what these four words mean, may I suggest you to look elsewhere to invest your money?
But here we have individuals who cannot make money from properties – perhaps the easiest way to make money – wanting to try out forex. As you can see, something is not right with that statement. If they cannot make money from
properties, what makes them think they are going to make money from forex, a significantly more sophisticated instrument? (That ought to set your alarm bells ringing already. Any time the seller uses the word ‘instrument’ instead of calling it plain old investment; he’s telling you that you need to have a double PhD to make money from it!)
This is not much different from a guy who is losing at checkers who now wants to try his luck playing chess – against grandmasters! While he may win once in a blue moon, the obvious result is that he will lose most, if not all, of the time.
Furthermore, how many people you know have made money from forex? My guess is none. Don’t worry; you’re not the only one. I don’t know of a single individual who has made money on a consistent basis from forex. Come to think of it, I’ve never met anyone who made money from forex – period!
But I do know of some big corporations, organizations and in fact, a certain country in South East Asia (clue: the country’s name begins with the letter M) that nearly went bankrupt because of currency trading! Imagine, if a country with millions of bright intelligent people can go bankrupt because of currency trading, what chance does the individual investor have?
Of course the people promoting forex will make it sound so simple. Learn a system, work the system, maintain your discipline, and you will make money from forex. Easy peasy.
But then I can also tell you how to win at chess. In fact, it’s so easy. All you need to do is to conquer the opponent’s queen, and you will win.
That is the theory. However, to do it in real life is not so easy.
And by the way, this is not an attack on forex, futures, options or commodities. What I’m saying is that these instruments (that word again!) require a lot from the investor. So much so that they will wind up losing most of the time. The odds are against them.
This being the case, why go against the wind? Why not invest where it is easier to make money, and property certainly fits the bill here. While property investment is certainly not perfect – no investment is – it has many advantages over many other investments.
Firstly, it is significantly easier to learn the winning strategies in property investment. It is not too difficult to make money from properties. While I’m not saying that you will be raking in the big bucks just because you invested in properties, your chances of making money is a lot higher here than most other investments. As long as you do your homework, you should be able to make money from it.
One simple strategy is to buy the property the moment the project is launched by the developer. By doing this, you are paying the lowest price (particularly if you get some good discounts). Once the project is completed two years later, you can often sell it at a profit of 20, 30 percent or even higher.
Now while it is a simple strategy, the fact remains that it works! In fact, tens of thousands have made money this way. And because it works, it is certainly one strategy that you should consider adopting, if you have not done so yet.
Furthermore, because it is simple, you don’t have to crack your head trying to discover new formulas or reinvent the wheel. All the formulas are already there; you just need to work on them.
Next, it does not require much time. While you obviously will be inspecting the properties before buying them, you don’t have to be eyeing it every other day. In fact, there were properties that I saw only twice or three times in my life. But that did not stop me from making money from them.
This hands-free concept is another valuable plus point in property investment. I’m sure that like me, you have no big desire of monitoring your investment every single day. What you want to do is concentrate on your work and family, and perhaps look at the investment once in a couple of months or so. In fact, the less time you have to spend on the investment, the better.
Now aren’t these good solid reasons why you should invest in properties? I think the answer is an overwhelming yes.
Saya percaya ramai yang mengalami dilema disebabkan panduan peraturan baru yang dikeluarkan oleh BNM. Ia menyukarkan lagi cabaran membuat pelaburan hartanah terutama kepada kategori middle income.
Saya sendiri tidak lagi layak untuk membuat sebarang pinjaman hartanah. Terpaksa menggunakan teknik lain. Berikut saya kongsikan artikel (petikan drp BizStar) yang membincangkan topik serupa, w/pun jawapan yang diberikan masih tidak memuaskan.
Refinancing apartment to buy third property
Our property investment consultant Peter Yee is the author of the books, You Can Become Rich in Property and The Certain Way to Life’s Riches.
Formerly an educationist, he has also been a management consultant, stockbroker, restaurant owner, property investor and investment coach.
Yee has a doctorate and master’s degree in business administration as well as a bachelor of science degree. He runs workshops on How to Make Money from Residential, Commercial and Auction Property in Malaysia.
I have one serviced apartment with a market value of about RM500,000 and a rental income of RM2,000. My loan is RM339,000 with a monthly repayment of RM1,200.
A year ago, I bought another apartment for my own use. But I was transferred to Pahang and I’m renting a house there. My second apartment was rented out for RM1,100 and I’m paying RM750 monthly for the loan. I will return to Kuala Lumpur next year and I plan to buy another house.
The current banking policy is that I can’t get 90% loan for my third property. I’ll only get 70% and I have to come up with 30% down payment, which is quite difficult for me. I have three options.
- Stay at my old apartment which is about 30km from my new workplace and lose my positive cash flow.
- Rent a new house near my workplace. Positive cash flow will go to apartment rent.
- Buy a new apartment by refinancing my serviced apartment. Since it is still new – completed in Oct last year – refinancing it will increase my monthly payment to RM2,000 per month. This means no positive cash flow for that serviced apartment.
What is your opinion on this matter.
Congratulations on your success of getting positive cash flow!
Property investment is getting more challenging partly due to the 70% loan limit for the third residential property. Such a loan consideration is now based on the net household income instead of gross household income. The challenge is also partly due to the inflated prices of property in general.
The pricing and rental rates of condominium developments and office space in areas with an oversupply such as KLCC have been declining since the second half of 2011.
Your question relates to the future or about one year from now. Many things can change within one year and the future is uncertain. The general election is around the corner. Other considerations which may affect sentiments include the debt crisis in Europe, the US economic crisis tail off, stagnation of the Japanese economy, soft or hard landing of China’s economy and a slower GDP growth (an estimate of 4.8%) in Malaysia this year.
Property prices in cities and major towns in China, Hong Kong and Singapore are beginning to decline. The pricing and rental rates of condominium developments and office space in areas with an oversupply such as KLCC and Mont’ Kiara have been declining since the second half of 2011.
The reason for the 70% loan limit is to reduce the increasing household debt to service ratios (expected to be more than 60% in 2012). The 70% loan limit may change within a year, so do not worry too much for now. Be flexible and adjust your investment plan, as and when, the changes occur.
If you plan to purchase another house or a third residential property, here are other factors to consider before making a decision.
In considering your second option, renting a new house near your workplace and using the cash flow from your apartment rental to pay for it, is a good idea. This is because you don’t have to evict the existing tenant and it will help you save time and petrol.
For your third option, in refinancing your serviced apartment for the third loan – check with your banker for the maximum loan amount eligible – as the serviced apartment is sited on commercial land with a residential building on it. At the same time, consider the hidden costs such as maintenance fees, quit rent, assessment rates and rental vacancy rate.
I do hope the 70% third residential loan limit will be removed and you can continue your investment plan next year.
Kepada pelabur yang masih belum memiliki sebarang hartanah kediaman, ini adalah peluang terbaik anda.
Skim Rumah Pertamaku (SRP) was announced in the 2011 Malaysia Budget by the Malaysian Government to assist young adults who have just joined the workforce, with a gross income not exceeding RM3,000 per month, to own their first home.
The Scheme allows young adults to obtain up to 100% financing from participating banks, enabling them to own their first home. This is in line with the Government’s aspirations of increasing home ownership amongst the “rakyat”.
Sila rujuk link www.srp.com.my
Ini satu lagi teknik yang saya ingin kongsi bersama untuk pelabur hartanah. Tapi teknik advance ini hanya sesuai utk pelabur yg telah memiliki hartanah sekurang-kurangnya 4 buah.
Place the purchase of your property under a company, investors advised
Corporatise the purchase of your properties under a commercial entity to realise your investment potential, says KPMG partner Ooi Kok Seng.
He said if the purchase of a property was placed under a company, the loan to ratio value which allowed borrowings of only up to 70% for a third house did not apply.
“Property investors should explore the option of parking their property investments under a company,” he said at a property forum ‘Invest in Malaysia, Invest in Kuala Lumpur’ organised by Eastern & Oriental Berhad recently.
Ooi said the loan to ratio value applied only to individual buyers of properties.
He said the annual tax rate for such a company renting out the properties that it owned was only 20% for the first RM500,000 profit, compared to the flat tax rate of 26% if the rented properties were to be parked under an individual’s name.
“There are also other benefits such as when a purchaser buys the shares in an entity that owns a property, he only has to pay a stamp duty of 0.3% as compared to 3% for buying a property directly from an individual owner.
“In the case where a purchaser buys the entire shares in a company that owns a property with a market value of say RM1mil, the maximum stamp duty is around RM3,000, whereas a purchaser who buys the property directly from an individual owner has to incur a stamp duty of approximately RM24,000,” he said.
Ooi, however, said the disadvantage of setting up such a commercial entity was that the loans offered by banks would not be as attractive as compared to those provided for individual buyers.
“The other setback is that there will be an annual maintenance cost of about RM3,000 to RM5,000 for auditing, tax, and secretarial charges,” he added.
Artikel berikut sangat menarik untuk dikongsi bersama. Saya sependapat dgn beberapa konsultan hartanah. Dalam pelaburan hartanah, faktor yg sangat penting adalah modal permulaan. Sebab itu skim 5/95 sangat membantu pelabur hartanah. Malah kalau ada skim 0/100, saya akan menjadi org pertama akan memohon. Dgn modal permulaan yg rendah, ROI akan menjadi lebih tinggi.
Is the 5/95 housing loan scheme a better option?
When Lehman Brothers fell in September 2008, the Malaysian property market entered a challenging period. There were few takers and developers were at a loss as house buyers were few. In the first quarter of 2009, one of Malaysia’s largest property developer, SP Setia group coined what was soon to become popularly known as the 5/95 scheme.
Soon after, other established property developers such as Glomac Bhd, Mah Sing Group Bhd, Malton Bhd and Sunrise Bhd followed suit with their 5/95 home loan schemeswith different degrees of success. Some of these schemes could be 10/90, where a buyer paid a 10% downpayment.
Essentially, the 5/95 scheme was meant to help boost property sales which was then being threatened by a slowing economy. Under the scheme, house buyers need to pay 5% of the downpayment while the rest will be financed through a loan. Servicing of the loan starts only when the property is up and ready.
Are these schemes beneficial to house buyers? Or is it another marketing tool of developers?
In the short term, it may seem attractive. After all, one only has to pay 5% or 10% of the price of the house and the next payment is only when one takes delivery of the house. The developer will also bear other entry costs such as legal fees, stamp duty on the sale and purchase agreement and loan agreement as well as memorandum of transfer for purchases under the campaign.
A mortgage loan officer who has done his rounds being on the panel of bankers for various developers says the conventional loans and not the interest-bearing ones, are better options in the long run.
He says that no developer will bear legal fees, interests or stamp duty for free. All these are in fact factored into the price of the house. He says that 5/95 schemes are popular particularly among entrants to the job market because they have problems forking out the downpayment, which is usually the biggest challenge when purchasing big ticket items such as a property.
Because they are young, time is on their side. Such schemes are also popular among speculators because their intention is to sell the house the minute they take delivery of it.
While it is understandable that developers need to sell, what may be prudent for buyers is to ask for an option, to either enter into a 5/95 or to go for the conventional mortgage. And if a conventional loan is possible, whether the developer will reduce the price of the house. However small that percentage may be, it will add up.
A developer of a high-rise condominium project in Petaling Jaya gave buyers an option of a 5/95 scheme or pay more for the downpayment. If a buyer were to opt for the conventional scheme, the price of the house is reduced.
Given the sharp rise in property prices last year, it may appear that most of these house buyers could be sitting on potential profits.
While house prices in the Klang Valley grew by an average of 10% a year in the last two years, selected areas saw astounding growth of 25% annually.
As most of those who bought houses under this scheme, particularly in the Klang Valley, likely comprise those from the middle to upper income bracket as well as speculators, chances of them facing difficulties servicing their loans may be low.
“These days, one can stretch the repayment period from 35 to 40 years, especially if one is in his or her late 20s or early 30s. Thus, the 5/95 scheme, together with the long repayment period, is very helpful for first time buyers,” says a banking analyst. “People like 5/95 because the initial capital outlay is low, hence it doesn’t hurt so much. One reason why property prices remain high could possibly be because the hidden cost of 5/95 is already imputed in the price. High as it may be, people continue to buy anyway,” said KGV-Lambert Smith Hampton Sdn Bhd director Anthony Chua.
Another property consultant added that 5/95 was popular because of the affordability factor.
“Many people can’t afford the down payment for the 10/90 scheme and are digging into their Employees Provident Fund. So even if 5/95 may be perceived to be more expensive, it will still remain popular, ” said the property consultant.
Chua added that with 5/95, the buyer might be paying more but he wont feel the pinch as the loan period was over a longer period.
“Furthermore, with the real property gains tax at 5%, coupled with our inflationarry environment, it also keeps the risk of buying homes under the 5/95 scheme even lower, as the house price is more likely to increase in tandem with inflation,” said the property consultant.
A banking and property analyst says the difference between 5/95 and 20/80 schemes is merely in the interest portion paid.
“When you pay interest on a 95% down payment versus interest on 80% down payment, of course the interest payment on the 80% is lower.”
She adds that there is a perception of savings under the 5/95 scheme and the buyers’ salary could increase after three years, hence reducing the stress on their balance sheet.
Zerin Properties founder and chief executive officer Previndran Singhe adds that when purchasing properties, it is all about the purchasers’ cashflow abilities. The buyer will decide based on his monthly income and his ability to service his monthly commitments.
“At the end of the day, it is only an interest issue. Everyone claims that the interest fees and other costs are built into the 5/95 scheme,” he says adding that if a property product is good and developed by a reputable property developer and in a good location, he would encourage the buyer to purchase the property via the 5/95 scheme, especially if the interest rate was low.
“What is more important is to look at the interest rate at the time, not whether it’s 5/95 or 20/80,” he says.
With interest rates going up today, the bigger question is this: Will those who buy properties under the 5/95 or 10/90 be committed to their mortgage payments, or will they take the opportunity to cash out?