Business Times Interviews - Starting Young

[d.o.g.]

Earning in SGD and investing in RM makes things much more attractive too.

This is only true if you intend to retire in Malaysia i.e. your future expenses will be in RM. If you intend to retire in Singapore you run the risk of SGD appreciating against RM which would mean that even if you make money in RM terms you could lose money in SGD terms.

[Chess_gal]

Oh, after my bubble tea business failed, I took one year to study the property market and read books on property investment. My first lawyer was very very crappy to be honest, but years of audit taught me to be meticulous and anal when it comes to reading the fine line. The SPA was changed for at least 10 times cause she got all my details and terms wrong. When it comes to apportionment of charges (maintenance, utilities, tax assessment), the vendor's lawyer over charged me and my stupid lawyer just blindly accepted their claim. I challenge them and eventually they admitted their mistake and refunded the excess money to me. It was not a bed of roses at first, and I was on my own back then as I dont have any expert to turn to. So, I just read Milan Doshi books for guidance. The first three months were very frustrating. Imagine that I am in Singapore most of the time and everything has to be done through emails and telephone calls. And I bought my property without informing my parents until very much later. After my purchase, I started to attend seminar (I should have gone for one before I buy) and befriended property agents and bankers who are now my go-to team. I also started an investor group in Singapore on facebook called Malaysian Investors in Singapore Soil for us to share deals and opinion. We have not done any group deal yet, but we plan to if any good deal comes along. So, yeah, that is how I learn the art of property investment. Trial and error.

As for my contingency plan, I set aside a sum of money for emergency use. Rule of thumb is 6 months of installment in case I dont get my units rented out or I get retrenched (touch wood). The unit I bought is in a prime area (something like Bukit Timah in Singapore) but below market rate (so I can afford to reduce my rental to compete with other expensive condo). It is near two well known International School and a target of deep pocket msian and expat.

Earning in SGD and investing in RM makes things much more attractive too.

This is only true if you intend to retire in Malaysia i.e. your future expenses will be in RM. If you intend to retire in Singapore you run the risk of SGD appreciating against RM which would mean that even if you make money in RM terms you could lose money in SGD terms.

I am a Malaysian, and yes, I intend to retire in Msia one day.

[mrEngineer]

Well that speaks alot for the local area knowledge, Malay language knowledge and handling culture.

[pianist]

chess_gal may i ask which are considered 'good' developers in malaysia? thanks in advance

[Musicwhiz]

Hi Chess_Gal,

Just curious and interested to find out from you - assuming a major property slump/crash occurs in China, Hong Kong and Singapore, do you think it would affect Malaysian property as well?

Another question too - what is the average interest rate on home loans granted by banks for Malaysian property? I understand the major banks in Malaysia include Malayan Banking Berhad and RHB Bank.

Thanks!

[Chess_gal]

The usage of Malay language isnt very important unless dealing with management, government and maintenance guy. Best to get a local agent to help you with your property. I know it is a hassle, but nothing worth having comes easy.

The Edge Top Property Developers Awards 2010
No. 1 – S P Setia Bhd
No. 2 – Sime Darby Property
No. 3 – Sunway City Bhd (SunCity)
No. 4 – Sunrise Bhd
No. 5 – IGB Corp Bhd
No. 6 – IOI Properties Bhd
No. 7 – I&P Group Sdn Bhd
No. 8 – Bandar Raya Developments Bhd (BRDB)
No. 9 – Mah Sing Group Bhd
No. 10 – IJM Land

Many Singaporean investors skewed towards buying from developer, a few investor contacted me and joined my investor club but only keen to buy from developer. I personally prefer subsale so that I dont have to service loan during the construction period. Then again, a lot developer also came up with DIBS (developer interest bearing scheme) to attract buyer, but no longer the case in recent years due to economy picks up.

I should elaborate more on why unoccupancy rate isnt my concern.First, there is about 6 million of people working in KL, Msia economy is pretty much driven internally, depending on local talent rather than foreign. We import whole lot of lower level foreign talent but not much of professionals. Hence, during economic downturn, despite locals getting retrenched, they still need a roof over their head and they dont leave the country. You may ask, why didnt the local buy the house instead? Well, either they cant afford a place nearer to KL or they are from other state. Msia has 12 states, and KL being the economy hub, it became a great attraction.

Secondly, jam is a huge problem in KL, no thanks to our Government trying to promote our national Proton cars. Hence, many working class prefer to stay nearer to their work place, KL or Damansara.

Better living, due to our inefficiency, there are a lot of ways to make money in Msia, especially in business. Form a company with a bumiputera, bid for a government job, very likely you will be awarded a contract if you have connection with the right people. Improved standard of living calls for guarded/gated residential area. High end condo being the target of deep pocket Msian.

I am still very much a newbie in property investment. I know a lot singaporean got burnt trying out Msian property but partly cause they were on their own without a reliable team of Msian ppl. You need to have someone with the local knowledge on your team.

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Hi Chess_Gal,

Just curious and interested to find out from you - assuming a major property slump/crash occurs in China, Hong Kong and Singapore, do you think it would affect Malaysian property as well?

Another question too - what is the average interest rate on home loans granted by banks for Malaysian property? I understand the major banks in Malaysia include Malayan Banking Berhad and RHB Bank.

Thanks!

During the financial crisis 2009, Msia property didnt slump as much as China, HK & Singapore. Msia economy is very much sustainable by its local economy. I can be wrong as I am not an economist. But as I was monitoring the market back then, property prices didnt drop as much as in 1997. Secondly, mostly property investor in Msia are Msian (as far as I know) and they do have high holding power.

The Msia BLR rate is 6.6% but banks usually offer up to -2.0%. Means BLR-2.0%, makes it to about 4.6%. The higher your loan amount, the higher would be the discount.

[mrEngineer]

Hmm, I think Malay language is important. As a Singaporean I would not be able to know as well as a malaysian about Malaysia matters. My father used to have 1 property in KL and Malacca (both of them are products of stupid timeshare schemes). Nonetheless I can tell my father having so much difficulty just dealing with tenants even he had an agent to help him.

You are right to say it is not easy and most important is to have a good agent. But given an agent to choose between a Singaporean investor and Malaysian investor with same amount of wealth, who do u think e good agent will be more inclined to help. And I would say good agents are busy anyway, so my father had to spend 50% of his own effort.

For your case, u r lucky that Singapore is a much open to Malaysian and we readily accept malaysians than maybe other PRC or Vietnamese. However the opposite is not true, most impression I get from malaysians are that we singaporeans are rich and arrogant. Probably we are ranked one level lower than the ang mohs.

I know what I said is quite racist but its my personal opinion and experience anyway. Cheers.

[redcorolla95]

Hi Chess_Gal,

Newbie qn on Msia property:
do the banks in Msia allow you to lock in the current low rates of borrowing for a long time?
also how do the banks check that people are not overstretched and buying too many properties?

[Chess_gal]

Singapore's national anthem is in Malay! I am actually very surprise that why Singaporean wasnt exposed to Malay language in the first place. Anyways, that's out of the topic.

A good agent wont be bias towards any particular customer, regardless a white cat or a black cat, the cat that catches the mice is a good cat. You will be surprised that you'll get more respect for being a Singaporean than a Msian. Many times when I called agents in KL using my KL number, they would asnwer me nonchalantly, but when I call using my sg number, they would be more enthustic to answer my queries!

Reply to redcorolla95.
There are insurance company and bank that provide fixed rates, but usually higher than the current floating. mine is locked in for 40 years at BLR-2.1%, so it is tied to BLR.

Msia has what we call CCRIS similar to Singapore's CBS (Credit Burea System) that keeps track of your financial credibility. Rule of thumb is your installment cannot be 1/3 of your salary. But then again, if your unit is rented out, it can be added into your gross income for assessment.

Singapore dollar is already more than 2.5 times of ringgit, that itself already tells a lot. In terms of impression, I also do get different treatment the moment i mentioned of being a Msian. But I guess it is the same everywhere else, there will always be a tint of biasness when treating a foreigner. Like Msian being bias to Myanmar, Vietnamese etc. You guys know why Singapore economy needs foreign talent, your own talent is migrating to countries like Australia. Anyways that's another topic for another day.

[mrEngineer]

A good agent wont be bias towards any particular customer, regardless a white cat or a black cat, the cat that catches the mice is a good cat. You will be surprised that you'll get more respect for being a Singaporean than a Msian. Many times when I called agents in KL using my KL number, they would asnwer me nonchalantly, but when I call using my sg number, they would be more enthustic to answer my queries!

Its good times now, agents look for those who can give them more deals. When it comes to bad times, they maybe change how many mobile numbers to avoid you. So it does not reflect whether the agent is good or not or maybe i meant loyal or not.

One of my father KL property had a tenant committed suicide and the agent disappeared as it means nothing but trouble for her later on. My father had so much difficulty with lawyers and new agents to settle the issue later on. Sometimes, life get interesting too.