Property News

[Manhattan]

Thou we should not compare SG to JB as one is a Developed country & the other is "Developing" country, SG's rental gross yields are from 2+% to 4+%. So at $1.1k myr, what is your gross yield? If it's similar, i would say not bad???

Not sure how much the owner paid for it. Assuming he paid 350k rm full cash and now renting out at rm 1100. Thats 3.77% before tax and other arising expenses. Not too bad for both owner and tenant, both side got a decent deal. If this owner pay tax dutifully then the yield drop to 2++%.

Btw, this is a real rent paid by a tenant, not those quoted on iproperty , etc. Also, it is rented as an empty unit with only standard developer provided furnishing.

 

[mpan12]

About 500sqft. Like a big hotel room type.

Not bad by Singapore's standard. In SG, that's already bigger than many recently launched tiny 1-bedroom condos.

 

[mpan12]

Not sure how much the owner paid for it. Assuming he paid 350k rm full cash and now renting out at rm 1100. Thats 3.77% before tax and other arising expenses. Not too bad for both owner and tenant, both side got a decent deal. If this owner pay tax dutifully then the yield drop to 2++%.

Btw, this is a real rent paid by a tenant, not those quoted on iproperty , etc. Also, it is rented as an empty unit with only standard developer provided furnishing.

Depends on how one looks at it. If for myself, where I am very cautious about buying Johor properties as a foreigner for investment, I won't take the risk.

My simple calculation is as follows:

RM350k / RM1100 = 318 months or 26.5 years to recoup the full investment! That's too long a time frame.

Rental yield calculation is not so meaningful to me here because I have to give myself a lot of "safety margin" due to:

1. Flip flop policies in Malaysia that may disadvantage foreigner buyers
2. Property not easily resold in the market so there's a likelihood I may have to hold it for decades
3. Oversupply of condos in Johor
4. Type of property (Studio--too small) not favourable to family or Malaysian buyers
5. Unfavourable RM currency exchange which is dropping over the years
6. Periods where it is difficult to find new tenants once contract is over

We have not accounted for rental tax, property tax, repairs and refurbishment, management fees, etc. That will add to the costs for the owner.

But if I am the tenant myself, like I said, RM1100 is dirt cheap! So why not? The landlord is my slave in this case.

 

[snowbird]

Not sure how much the owner paid for it. Assuming he paid 350k rm full cash and now renting out at rm 1100. Thats 3.77% before tax and other arising expenses. Not too bad for both owner and tenant, both side got a decent deal. If this owner pay tax dutifully then the yield drop to 2++%.

Btw, this is a real rent paid by a tenant, not those quoted on iproperty , etc. Also, it is rented as an empty unit with only standard developer provided furnishing.

If your friend paid the apartment in cash and his returns is RM1100/month (gross before tax and other expenses) then he is not getting a good returns with his money.
And that's providing he is able to get long term rental without long breaks.
By just keeping those money in FD and with an average interest rate of 4.5%, he can get as much as RM16,000/annum against the gross annual rental of RM13,200(gross).
If he pays by installment and depending on the loan amount, the nett rental collection may not covers his monthly installment.

 

[Manhattan]

If your friend paid the apartment in cash and his returns is RM1100/month (gross before tax and other expenses) then he is not getting a good returns with his money.
And that's providing he is able to get long term rental without long breaks.
By just keeping those money in FD and with an average interest rate of 4.5%, he can get as much as RM16,000/annum against the gross annual rental of RM13,200(gross).
If he pays by installment and depending on the loan amount, the nett rental collection may not covers his monthly installment.

I know the tenant, not the owner. Anyway I hope investment is that simple. Probably the owner is one of those who sees the future of johor to surpass KL, and thinks it's just a small sum, the amount invested in that freehold apartment could barely let him upkeep a family car in sg for ten years.

The number of nice condos coming up in JB town is astounding. Boom or bust nobody can say for sure, at least they are being completed and not abandoned half way.

 

[mpan12]

Firstly, the owner got to ask if he has a need for a car in Singapore or not. If don't need what for he forces himself to buy it? But that doesn't mean he should blindly plonk his money on a Johor studio apartment that becomes a liability to him. In investment, cheap does not necessarily mean it's good buy.

The owner of the studio unit could be left with no choice but to rent it out. Maybe he thought wrongly it would be easy to flip the condo. Some owners are now trying short-stay rental also. At $60-70 a night for a 1-bedroom condo, it's dirt cheap. Some get only 3 to 4 bookings in a month. How to make money? The condo becomes a liability, not an asset.

RM350k is about S$116+k. There's a lot one can do with this amount:

- Can definitely buy a brand new car. Or alternatively, a good 2nd hand car with lots left for maintenance, insurance, tax, petrol, etc.

- Send one child for overseas education. Or 4 children to a 4-year course in SG universities.

- Pay for a full, designer-style renovation to a 5-room HDB flat with still some leftover cash.

- Allow a commoner to retire 4-5 years earlier from work.

- Buy good stocks that give good returns and are so much easier to liquidate than Johor properties.

- Enjoy 10 trips to Europe for a family of 4.

So there's lots you can do with that amount of money!

 

[rotikok]

After reading both side of the arguments, I find that after all your investment decision depend on your future outlook of the area. Those gloomy like mpan12 will not even step in. Those bullish like frodo will see green haven off the plan project as opportunity but think further, the risk is there too since what might be happen as hope by frodo might not happen....or even worse, half way developer runaway.

Aside of everything, the ultimate key afterall is the price you bought in. Can be good area like CBD in Sg but end up losing millions because the get in price is toooo high. Or bad area like iskandar but profiting bcoz the get in price is too low to the point able to offer lowest easy to let go price yet earning. My point is, take other option into consideration, if let say put in FD is higher than rent out ppty+future selling price... then why risk it if you think what you did cannot beat FD? No right or wrong, just your judgement and different view on how future will turns out...combining with the price you get in. If the area is hard to get out (hard to liquidate) allow to have higher safety margin.

No right or wrong, every place there is ppl who gain and ppl who loss. Ppty investment is not simple, you can win your argument but if you cant make money on what you said, your winning is meaningless.

 

[xebay11]

Not bad by Singapore's standard. In SG, that's already bigger than many recently launched tiny 1-bedroom condos.

Johor has so much land, why subject to Singapore standard of living, 500 square feet is jail like by Malaysia standards.

 

[Frodo]

After reading both side of the arguments, I find that after all your investment decision depend on your future outlook of the area. Those gloomy like mpan12 will not even step in. Those bullish like frodo will see green haven off the plan project as opportunity but think further, the risk is there too since what might be happen as hope by frodo might not happen....or even worse, half way developer runaway.

Aside of everything, the ultimate key afterall is the price you bought in. Can be good area like CBD in Sg but end up losing millions because the get in price is toooo high. Or bad area like iskandar but profiting bcoz the get in price is too low to the point able to offer lowest easy to let go price yet earning. My point is, take other option into consideration, if let say put in FD is higher than rent out ppty+future selling price... then why risk it if you think what you did cannot beat FD? No right or wrong, just your judgement and different view on how future will turns out...combining with the price you get in. If the area is hard to get out (hard to liquidate) allow to have higher safety margin.

No right or wrong, every place there is ppl who gain and ppl who loss. Ppty investment is not simple, you can win your argument but if you cant make money on what you said, your winning is meaningless.

I don't speak from an investment point of view because I do not qualify. Rather I speak from the point of the low to average earning Singaporean who don't have much cash in hand but yet would like to own an additional property which could add value to himself. I am not bullish about JB, but optimistic about it's future, based on what has taken place over the past decade. Perhaps buying for own use can turn out to be a good investment too, in an unintended way.

 

[xebay11]

After reading both side of the arguments, I find that after all your investment decision depend on your future outlook of the area. Those gloomy like mpan12 will not even step in. Those bullish like frodo will see green haven off the plan project as opportunity but think further, the risk is there too since what might be happen as hope by frodo might not happen....or even worse, half way developer runaway.

Aside of everything, the ultimate key afterall is the price you bought in. Can be good area like CBD in Sg but end up losing millions because the get in price is toooo high. Or bad area like iskandar but profiting bcoz the get in price is too low to the point able to offer lowest easy to let go price yet earning. My point is, take other option into consideration, if let say put in FD is higher than rent out ppty+future selling price... then why risk it if you think what you did cannot beat FD? No right or wrong, just your judgement and different view on how future will turns out...combining with the price you get in. If the area is hard to get out (hard to liquidate) allow to have higher safety margin.

No right or wrong, every place there is ppl who gain and ppl who loss. Ppty investment is not simple, you can win your argument but if you cant make money on what you said, your winning is meaningless.

You are wrong, there is clear right or wrong, if one bought JB property to make money and did not, definitely would be wrong.

In Johor the term CBD in so loose, every rubber estate can be the next CBD, to me the propertie's proximity to Singapore is the best indicator of value. Not other hogwash fairy tale plan.

 

[Tekkun]

You are wrong, there is clear right or wrong, if one bought JB property to make money and did not, definitely would be wrong.

Losers always wrong, winners always right. Those who stay neutral always dream.

 

[Investor888]

Aiyah no money to enjoy life in Singapore just go to JB stay lor. I am very surprised there are Singapore pple ( most likely SG PROPERTY AGENTS ) who are deterring people from buying properties even for own stay in JB.

I don't speak from an investment point of view because I do not qualify. Rather I speak from the point of the low to average earning Singaporean who don't have much cash in hand but yet would like to own an additional property which could add value to himself. I am not bullish about JB, but optimistic about it's future, based on what has taken place over the past decade. Perhaps buying for own use can turn out to be a good investment too, in an unintended way.

 

[Frodo]

Aiyah no money to enjoy life in Singapore just go to JB stay lor. I am very surprised there are Singapore pple ( most likely SG PROPERTY AGENTS ) who are deterring people from buying properties even for own stay in JB.

Maybe for some of the more cynical folks, JB stands for Johor Bashing! LOL!

 

[Frodo]

You are wrong, there is clear right or wrong, if one bought JB property to make money and did not, definitely would be wrong.

In Johor the term CBD in so loose, every rubber estate can be the next CBD, to me the propertie's proximity to Singapore is the best indicator of value. Not other hogwash fairy tale plan.

Sometimes right and wrong is a matter of hindsight. Things can go downhill such that what was supposed to make money results in a loss. Would that be a wrong investment decision or conditions just did not turn out to be right? How could one know for sure what's going to happen, right?

 

[Frodo]

Firstly, the owner got to ask if he has a need for a car in Singapore or not. If don't need what for he forces himself to buy it? But that doesn't mean he should blindly plonk his money on a Johor studio apartment that becomes a liability to him. In investment, cheap does not necessarily mean it's good buy.

The owner of the studio unit could be left with no choice but to rent it out. Maybe he thought wrongly it would be easy to flip the condo. Some owners are now trying short-stay rental also. At $60-70 a night for a 1-bedroom condo, it's dirt cheap. Some get only 3 to 4 bookings in a month. How to make money? The condo becomes a liability, not an asset.

RM350k is about S$116+k. There's a lot one can do with this amount:

- Can definitely buy a brand new car. Or alternatively, a good 2nd hand car with lots left for maintenance, insurance, tax, petrol, etc.

- Send one child for overseas education. Or 4 children to a 4-year course in SG universities.

- Pay for a full, designer-style renovation to a 5-room HDB flat with still some leftover cash.

- Allow a commoner to retire 4-5 years earlier from work.

- Buy good stocks that give good returns and are so much easier to liquidate than Johor properties.

- Enjoy 10 trips to Europe for a family of 4.

So there's lots you can do with that amount of money!

That's assuming one has $116K on hand to use as he wish! But peasant folk like me don't have such a luxury. What can we do to improve our circumstances, such as to own another property? Singapore is no longer feasible. So JB is definitely a very suitable option, and with low entry cost promotions by developers (here comes the sales talk LOL!), even peasants can own a little piece of air space in JB.

 

[tstar]

i have a friend that has a terrace house at Hh. Almost paid up the loan. She is nearly 50 years old. For years she has been renting out the house though she wants to live there and enjoy themselves.

Soon her wish will come true as she has received a letter from the company informing those whose technical skills are less desirable that their contract will be terminated. As she is a postgraduate and earns a decent salary, it is very very difficult for her to change mindset to pick up new skills and join the service industry. Her husband is also in danger of being retrenched as a big US company has closed down its factory and its sole competitor will downsize by 30% to cut down the operation cost. if you are in electronics, you willl know which companies.

They also do not want to rent out hdb rooms to strangers. they want to rent out the whole unit and move to HH. i think their biggest problem is child going to JC. But fortunately they have a close relative who does not mind offering a room for the child. On weekends they will meet at HH. that is her plan. otherwise how to survive. unless one goes to drive a taxi.
Hope the plan works well.

 

[Tekkun]

That's assuming one has $116K on hand to use as he wish! But peasant folk like me don't have such a luxury. What can we do to improve our circumstances, such as to own another property? Singapore is no longer feasible. So JB is definitely a very suitable option, and with low entry cost promotions by developers (here comes the sales talk LOL!), even peasants can own a little piece of air space in JB.

One say he will not invest in JB. Singapore is safe.
The other say he does not have much choice but to invest in JB.

I say it is like lottery in JB. If you buy, you have a chance to strike it rich. Maybe 0.1%. If you lose, you lose in RM and it does not cost as much as in Singapore. It is all a matter of calculated risk.

But for those who dare not buy lottery, you have nil chance of striking rich. You can only dream, hopes doesn't even exist.

 

[mpan12]

That's assuming one has $116K on hand to use as he wish! But peasant folk like me don't have such a luxury. What can we do to improve our circumstances, such as to own another property? Singapore is no longer feasible. So JB is definitely a very suitable option, and with low entry cost promotions by developers (here comes the sales talk LOL!), even peasants can own a little piece of air space in JB.

You no money still want to buy another condo?

The quoted S$116k is based on the previous example of the person having bought the JB condo for "investment". I'm just showing how better the money could have been spent.

I reiterate, as usual, Cheap does not mean it's good. Cheap to Singaporeans but expensive to Malaysians, that's even worse. Usually such properties are the ones to suffer in a downturn. Orchard Road and Sentosa are good examples.

I emphasize the above is in relation to investment and you want to get back your money ultimately.

If you are rich enough or think you want to buy for your own enjoyment, no need to get back money, then it's a different story.

 

[xebay11]

Firstly, the owner got to ask if he has a need for a car in Singapore or not. If don't need what for he forces himself to buy it? But that doesn't mean he should blindly plonk his money on a Johor studio apartment that becomes a liability to him. In investment, cheap does not necessarily mean it's good buy.

The owner of the studio unit could be left with no choice but to rent it out. Maybe he thought wrongly it would be easy to flip the condo. Some owners are now trying short-stay rental also. At $60-70 a night for a 1-bedroom condo, it's dirt cheap. Some get only 3 to 4 bookings in a month. How to make money? The condo becomes a liability, not an asset.

RM350k is about S$116+k. There's a lot one can do with this amount:

- Can definitely buy a brand new car. Or alternatively, a good 2nd hand car with lots left for maintenance, insurance, tax, petrol, etc.

- Send one child for overseas education. Or 4 children to a 4-year course in SG universities.

- Pay for a full, designer-style renovation to a 5-room HDB flat with still some leftover cash.

- Allow a commoner to retire 4-5 years earlier from work.

- Buy good stocks that give good returns and are so much easier to liquidate than Johor properties.

- Enjoy 10 trips to Europe for a family of 4.

So there's lots you can do with that amount of money!

Don't forget, only Malaysians can buy at RM350k.

 

[Relaxman]

i have a friend that has a terrace house at Hh. Almost paid up the loan. She is nearly 50 years old. For years she has been renting out the house though she wants to live there and enjoy themselves.

Soon her wish will come true as she has received a letter from the company informing those whose technical skills are less desirable that their contract will be terminated. As she is a postgraduate and earns a decent salary, it is very very difficult for her to change mindset to pick up new skills and join the service industry. Her husband is also in danger of being retrenched as a big US company has closed down its factory and its sole competitor will downsize by 30% to cut down the operation cost. if you are in electronics, you willl know which companies.

They also do not want to rent out hdb rooms to strangers. they want to rent out the whole unit and move to HH. i think their biggest problem is child going to JC. But fortunately they have a close relative who does not mind offering a room for the child. On weekends they will meet at HH. that is her plan. otherwise how to survive. unless one goes to drive a taxi.
Hope the plan works well.

She need to spend some money to renovate the house in HH too.....must be badly damage by now.