Most of the property investors in Malaysia lose money once you factor in the hidden costs, It's a lot of hassle, Installments are usually higher than rental if you buy with 80-90% loan, and the pandemic made the situation worse. But if you're buying for own stay, by all means go ahead and purchase a property if you can afford it.
I think the main + point for property investment is that you actually get to borrow money for it, the impact of leverage, for 30% its a x3.3 multiplier, for 90% its a x9 multiplier to your returns. (all for the cost of loan interest, roughly 3% now) A very simplified way of calculation of an average property (numbers can be tweaked below according to what you find). 5% = rental returns (considered good in KL) add 5% = capital gains (avg capital gain for Msian properties - again, varies alot here) less 3% loan interest x 3.3 (70% loan leverage) = thats almost 23.1% annual RR on your initial capital (obviously need to deduct all other costs (reno, fees), including selling costs (agent comm etc) - but easily can expect 15% ARR after deduction?) - this is comparable to like a well performing mutual fund over the long run The pros is that you dont need alot of upfront capital to get a good dollar return - but when you have more money, its hard to search for so much good deals to scale up..
the correct answer is you make money by doing the thing you love the most. if you hate property but love stock market you will find success in stock market. if you love property but hate stock market you will find success in property. never ever try to find success in things that you hate.
Have you done a video about the risks of property investment lately? I have been a long time follower of this channel (which I enjoy a lot) and I noticed as the channel grew and perhaps mirroring your own investment strategy the channel has been talking bullishly lately about the opportunities and positives, would be good to hear the negatives as well. For example, what are the key risks? How much of a risk is rising interest, and how would that affect different types of investors? Is there a limit to the number of properties one should aim for, or the more the better without any limit? Is bankruptcy a risk, and to what extent we should be worry about this? What are the strategies to mitigate the risks? Would be great if you can share your knowledge and experience on these topics.
Well obviously I have no business playing these games because I don't know the rules 😂 but I guess one has to start somewhere. Great videos! Binged watched quite a few of your videos over the weekend. Thought it would be another "guru"-type cult channel but videos turned out to be very reasonable, clearly articulated caveats (underrated!), more recent videos also well-edited and well-shot. Great content!
Phew!! Hahahaha. Thanks for the patience in going through them:) So glad I don't come off as 'guru'. My goal is to be more of a big brother or friend hehe!!
lol yes i was thinking this also, is it another "guru-type cult channel", even cynical, but I chose to see beyond my judgment and Sean's contents are legit good.
I know this sounds like "gurus" who are promoting infinite return (on 0 dollar down deals) - but my point is that leverage is really a powerful tool (just make sure you can afford to pay the instalment in worst case scenario that property rental returns cant cover)
Hi very good breakdown of property. One thing though, "stock" market also have ppl who go in to invest (10,20,30 yrs) for capital gains, and speculators. I believe those that lose money in the markets are more of speculators, they go in then panic and sell when something happens. Of course, like u mentioned, reading of finance reports, studying the company's business is crucial. I feel this part is the "hard work", but really not as hard as the work needed to study property, managing it. Just my 2 cents, I not expert :) And I love ur point by point answering of the questions, really appreciate the work recording, editing and ensuring proper lighting and audio, and of cos the sharing of your views, experience. Cheers and heres to a Huat Dragon year
When there’s a bunch of property guru suddenly come out of no where selling courses driving lambo ask you to buy property, it’s time to exit the market. You don want to buy at the top, same with crypto and stock trading.
Spread the loan tenure long enough and choose a good property with reasonable rental, then one can cover the instalment easily. But the total cash used for the purchase will increase when loan tenure is extended although your cashflow looks better. If tenure kept to minimum without severely deteriorates the cashflow, it will be better for longer term from total nett cash generated perspective.
Buy properties is easy... Difficult to sell. Very troublesome get in out compare to share market. Just Click click to buy and sell then after few days money is back to your wallet. Government can not get slice of your $. If property.... Need to pay stamp duty, capital gain tax. More u trade properties more government get your $. Government is sure win. U may or may not win.
My ex-boss regularly trades in the share market. One fine day a few years ago, he suddenly got called up by LHDN about these trades going all the way back to the 1990s - quite obvious they wanted to treat the trades as carrying out a business of share trading. He played ''smart'' and volunteered to calculate his own estimated tax on gains on those share trades. LHDN accepted.
Can i propose a topic for the next #ASKING SEAN segment? Can you talk about the proposed RESIDENTIAL TENANCIES ACT by KPKT. About its proposal and how it can protect tenants/landlords and if you can point out any implication in the future when it was to be approved
Haha. It's really a hot topic right now but I didn't want to discuss about it because nothing is confirmed. I'll definitely talk about it when it's finalized:)
Well I bought several from Far Capital so far, and they’re pretty solid. I would recommend to do our own due diligence before picking any projects or gurus in that matter.
Hello Sean, really appreciate the property videos and your insights so far. I would like to ask if you would be doing a review on Damansara Seresta soon? Currently looking at the development due to its reputation and also near completion. Thank you
this is very very helpful thank you so much Sean shi fu🥰 Edit: i'm blank paper in property, trying hard to learn, all these time have no proper guidance. already age 32 😭
Hi Sean, do you know any good places or people where we can go to ask advice or evaluation on the property that we planned to buy? Don't mind if there are some fees as long as we can get valuable feedback. Since this is a big and long investment. Appreciate any feedbacks.
As older condo ages and worsen in condition, and there are always new condo, wouldn't that affect the rental and also appreciation? Or do we exit at certain maturity point?
It only makes sense if you're a contractor, or an experienced person in construction and design. If not, there's nothing much to make from every transaction.
i invest in most, even unit trust, but took all out to buy a property. will soon go back in after renting it out. stocks, abit into epf and gold, abit in most things. definitely not into crypto tho, tried it, not my cup of tea.
The Malaysian rental market is sh**. The rental income barely covers mortgage, on top of that, you have expenses like property tax, land tax, property insurance and maintenance cost. So your return is literally negative. The problem is because the property prices are outrageously high for majority of Malaysians evident in the rental market prices(which is low n sometimes doesn’t even cover mortgage). Can’t even begin to talk about how to profit from property investing in Malaysia. Negative cash flow and hard to sell.
The rental market is the true market. Because it is cash based and only people who need accommodation will rent. I will say instead the property price is the one that is high. Buyers can be pure home dwellers, investors and flippers, hence why price can be very high. We can argue why these people buy in the first place is because property always go up.
If “rental > instalment” is a norm, who want to rent? If most Malaysian also can max out their loan (i.e. 90% 35 years loan), what makes you think that rental would be lucrative? When majority are investment-minded and making properly investment fairly competitive, what makes you think the rental rate will be high? When property investor (or even PLC like Sunway or UOA) purchased a property, do they even think about “whether we can cover my monthly mortgage” or they talk about the meaningful measurement - ROI? Property investment is not just merely “covering my monthly mortgage”, it’s about ROI, potential for value appreciation, how much you can leverage on bank mortgage to use the least cash to build your portfolio, etc.
@@Jasonl3103A who want to rent? In OECD countries like Germany and US, rental is always higher than mortgage. Even in that case, close to half of Germans rent. Dynamics in Malaysia is different but I see we are heading there in 1 or 2 decades
@@jackblack5962 buy property always a thing for the Chinese + low entry cost (eg zero down payment) + easy to get loan + developers nowadays skewed toward affordable housing….probably another 10 years till we reach the circumstances in OECD now. Actually if this is inevitable, we should buy more now! 😂
You want to rent to who. Condo rental per month is $2.2k. Fresh graduate pay is $2.8k already 3 years no incremental due to covid. Can keep your job also 'thow chiou' in hokkien.
@@iherng luxury watches are fixed and also it depends on the next person willing to pay for your watch it’s novelty value rather than real value , it’s like vintage car or painting . Hard to value and those who will pay to own it just because they love it , hard to value it , and hard to predict rate of return , and also it doesn’t generate dividend or rental yield , usually if i times rental yield per annum by 20-25 then i know whether a property is a bargain or can consider or too expensive . Luxury watches ….. very hard ler iherng yes it can earn money potentially especially certain models but hard to say which models also . Love your content on property been following you for a while and learned a lot : )
We are now trying that within my NFT project people. One actually did that and bought his first property. So we are still observing. Great question Shawn!!
@iherng thanks for your reply, is there any way you can keep posted on the result? There is also always the possibility of buying a luxury watch using USDT and selling off the watch for cash
@@iherng hi Sean, is this 6 months the same as your emergency fund or is this 6 months specific for your property investments? So meaning separate emergency funds
Most of the property investors in Malaysia lose money once you factor in the hidden costs, It's a lot of hassle, Installments are usually higher than rental if you buy with 80-90% loan, and the pandemic made the situation worse. But if you're buying for own stay, by all means go ahead and purchase a property if you can afford it.
I think the main + point for property investment is that you actually get to borrow money for it, the impact of leverage, for 30% its a x3.3 multiplier, for 90% its a x9 multiplier to your returns. (all for the cost of loan interest, roughly 3% now)
A very simplified way of calculation of an average property (numbers can be tweaked below according to what you find).
5% = rental returns (considered good in KL)
add 5% = capital gains (avg capital gain for Msian properties - again, varies alot here)
less 3% loan interest
x 3.3 (70% loan leverage) = thats almost 23.1% annual RR on your initial capital
(obviously need to deduct all other costs (reno, fees), including selling costs (agent comm etc) - but easily can expect 15% ARR after deduction?) - this is comparable to like a well performing mutual fund over the long run
The pros is that you dont need alot of upfront capital to get a good dollar return - but when you have more money, its hard to search for so much good deals to scale up..
the correct answer is you make money by doing the thing you love the most. if you hate property but love stock market you will find success in stock market. if you love property but hate stock market you will find success in property.
never ever try to find success in things that you hate.
Well said Paul!! Nice summary=)
Super agree on the equity building part over the course of 30 years. Great video again.
Thanks for watching Michael as always!!
Have you done a video about the risks of property investment lately? I have been a long time follower of this channel (which I enjoy a lot) and I noticed as the channel grew and perhaps mirroring your own investment strategy the channel has been talking bullishly lately about the opportunities and positives, would be good to hear the negatives as well. For example, what are the key risks? How much of a risk is rising interest, and how would that affect different types of investors? Is there a limit to the number of properties one should aim for, or the more the better without any limit? Is bankruptcy a risk, and to what extent we should be worry about this? What are the strategies to mitigate the risks? Would be great if you can share your knowledge and experience on these topics.
Well obviously I have no business playing these games because I don't know the rules 😂 but I guess one has to start somewhere. Great videos! Binged watched quite a few of your videos over the weekend. Thought it would be another "guru"-type cult channel but videos turned out to be very reasonable, clearly articulated caveats (underrated!), more recent videos also well-edited and well-shot. Great content!
Phew!! Hahahaha.
Thanks for the patience in going through them:)
So glad I don't come off as 'guru'. My goal is to be more of a big brother or friend hehe!!
lol yes i was thinking this also, is it another "guru-type cult channel", even cynical, but I chose to see beyond my judgment and Sean's contents are legit good.
I know this sounds like "gurus" who are promoting infinite return (on 0 dollar down deals) - but my point is that leverage is really a powerful tool (just make sure you can afford to pay the instalment in worst case scenario that property rental returns cant cover)
Hi very good breakdown of property. One thing though, "stock" market also have ppl who go in to invest (10,20,30 yrs) for capital gains, and speculators.
I believe those that lose money in the markets are more of speculators, they go in then panic and sell when something happens. Of course, like u mentioned, reading of finance reports, studying the company's business is crucial. I feel this part is the "hard work", but really not as hard as the work needed to study property, managing it. Just my 2 cents, I not expert :)
And I love ur point by point answering of the questions, really appreciate the work recording, editing and ensuring proper lighting and audio, and of cos the sharing of your views, experience.
Cheers and heres to a Huat Dragon year
When there’s a bunch of property guru suddenly come out of no where selling courses driving lambo ask you to buy property, it’s time to exit the market. You don want to buy at the top, same with crypto and stock trading.
Spread the loan tenure long enough and choose a good property with reasonable rental, then one can cover the instalment easily. But the total cash used for the purchase will increase when loan tenure is extended although your cashflow looks better. If tenure kept to minimum without severely deteriorates the cashflow, it will be better for longer term from total nett cash generated perspective.
Buy properties is easy... Difficult to sell. Very troublesome get in out compare to share market. Just Click click to buy and sell then after few days money is back to your wallet. Government can not get slice of your $. If property.... Need to pay stamp duty, capital gain tax. More u trade properties more government get your $. Government is sure win. U may or may not win.
My ex-boss regularly trades in the share market. One fine day a few years ago, he suddenly got called up by LHDN about these trades going all the way back to the 1990s - quite obvious they wanted to treat the trades as carrying out a business of share trading. He played ''smart'' and volunteered to calculate his own estimated tax on gains on those share trades. LHDN accepted.
commercial vs residential property
Yo Sean, really enjoy your videos, please make some videos about luxury watch as well😂
I will do my best yea hahaha=)
Thanks for watching!!
Can i propose a topic for the next #ASKING SEAN segment? Can you talk about the proposed RESIDENTIAL TENANCIES ACT by KPKT. About its proposal and how it can protect tenants/landlords and if you can point out any implication in the future when it was to be approved
Haha. It's really a hot topic right now but I didn't want to discuss about it because nothing is confirmed. I'll definitely talk about it when it's finalized:)
Would you recommend to gain "access deals" by following people/gurus like Dato Michael Tan?
Well I bought several from Far Capital so far, and they’re pretty solid. I would recommend to do our own due diligence before picking any projects or gurus in that matter.
Hello Sean, really appreciate the property videos and your insights so far. I would like to ask if you would be doing a review on Damansara Seresta soon? Currently looking at the development due to its reputation and also near completion. Thank you
this is very very helpful
thank you so much Sean shi fu🥰
Edit: i'm blank paper in property, trying hard to learn, all these time have no proper guidance. already age 32 😭
Never too later to start...good luck
Hi same situation as me, I am 32 this year, hope you find your way
How’s luxury watches market now?
It's a great time for watch geeks haha. Finally the prices are realistic but it's still impossible to get direct from ADs.
Yay, another episode from my favorite channel! Watching now while stuck in jam.
Hi Sean, do you know any good places or people where we can go to ask advice or evaluation on the property that we planned to buy? Don't mind if there are some fees as long as we can get valuable feedback. Since this is a big and long investment. Appreciate any feedbacks.
As older condo ages and worsen in condition, and there are always new condo, wouldn't that affect the rental and also appreciation? Or do we exit at certain maturity point?
Yes it does. Therefore it's important to take the surrounding development status into consideration too. So many things to consider right??
Is malaysia a good place for fix and flip?
It only makes sense if you're a contractor, or an experienced person in construction and design. If not, there's nothing much to make from every transaction.
i invest in most, even unit trust, but took all out to buy a property. will soon go back in after renting it out. stocks, abit into epf and gold, abit in most things. definitely not into crypto tho, tried it, not my cup of tea.
Dulu can.
Now.....challenging.
Hahahahahaha!!
The Malaysian rental market is sh**. The rental income barely covers mortgage, on top of that, you have expenses like property tax, land tax, property insurance and maintenance cost. So your return is literally negative. The problem is because the property prices are outrageously high for majority of Malaysians evident in the rental market prices(which is low n sometimes doesn’t even cover mortgage).
Can’t even begin to talk about how to profit from property investing in Malaysia. Negative cash flow and hard to sell.
The rental market is the true market. Because it is cash based and only people who need accommodation will rent. I will say instead the property price is the one that is high. Buyers can be pure home dwellers, investors and flippers, hence why price can be very high. We can argue why these people buy in the first place is because property always go up.
If “rental > instalment” is a norm, who want to rent?
If most Malaysian also can max out their loan (i.e. 90% 35 years loan), what makes you think that rental would be lucrative?
When majority are investment-minded and making properly investment fairly competitive, what makes you think the rental rate will be high?
When property investor (or even PLC like Sunway or UOA) purchased a property, do they even think about “whether we can cover my monthly mortgage” or they talk about the meaningful measurement - ROI?
Property investment is not just merely “covering my monthly mortgage”, it’s about ROI, potential for value appreciation, how much you can leverage on bank mortgage to use the least cash to build your portfolio, etc.
@@Jasonl3103A who want to rent? In OECD countries like Germany and US, rental is always higher than mortgage. Even in that case, close to half of Germans rent. Dynamics in Malaysia is different but I see we are heading there in 1 or 2 decades
@@jackblack5962 buy property always a thing for the Chinese + low entry cost (eg zero down payment) + easy to get loan + developers nowadays skewed toward affordable housing….probably another 10 years till we reach the circumstances in OECD now.
Actually if this is inevitable, we should buy more now! 😂
You want to rent to who. Condo rental per month is $2.2k. Fresh graduate pay is $2.8k already 3 years no incremental due to covid. Can keep your job also 'thow chiou' in hokkien.
Bro i got the request, can you reviewthe Gamuda Gardens properties? The facilities & the unit's itself. Please. Thanks!
dear shifu. how much a three bedder could rent near chan sow lin
May I suggest to check property portals such as propertyguru, iproperty and etc for direct listings??
Thanks for watching!!
Hi Sean, is it really possible to raise rents after each tenancy? Given it’s a renters market now?
Well of course it depends on the location and demand for that project.
@@iherng thx Sean!
Thanks Sean
Thanks for watching Check Nam:)
Hi, could you give us connection with bulk purchase company.
where is a good location to buy right now in KL? which area will be balance in terms of psf price and location is in demand ?
Hello Christopher, would you like to connect? I so happen to have a good deal. :)
Thank you Sean! It does gives me a lot of different perspective to consider in doing property investment!
Terry ◡̈
Luxury watch and crypto are horrible hold of value and highly speculative. You want to hedge , buy singapore blue chip . Solid .
Well it depends on whether do you know the rules of the game. So far I'm kinda enjoying them=)
@@iherng luxury watches are fixed and also it depends on the next person willing to pay for your watch it’s novelty value rather than real value , it’s like vintage car or painting . Hard to value and those who will pay to own it just because they love it , hard to value it , and hard to predict rate of return , and also it doesn’t generate dividend or rental yield , usually if i times rental yield per annum by 20-25 then i know whether a property is a bargain or can consider or too expensive . Luxury watches ….. very hard ler iherng yes it can earn money potentially especially certain models but hard to say which models also . Love your content on property been following you for a while and learned a lot : )
btc literally the best performing asset of the decade and you're saying its horrible hold of value? pass me the weed ser
@@Zenphrus where's btc now.. Pass me your weed pls
What's the name of the rental agency you use
But then again when you liquidate crypto, will the banks actually ask you where the money comes from?
We are now trying that within my NFT project people. One actually did that and bought his first property. So we are still observing.
Great question Shawn!!
@iherng thanks for your reply, is there any way you can keep posted on the result?
There is also always the possibility of buying a luxury watch using USDT and selling off the watch for cash
Is that a daytona on the wrist?!?
Tudor Black Bay Chrono (black/gold)
How much rm u should have in emergency funds just in case anything happens?
I practice to have 6 months dezhan:)
@@iherng hi Sean, is this 6 months the same as your emergency fund or is this 6 months specific for your property investments? So meaning separate emergency funds
how do you think which area of malaysia property is most value opputunity to invest？
meant KL or penang，johor🤔