Puteri Harbour Community

[Funniman]

What is the usual penalty (%) for early capital repayment?

Many of the loans have lock in period between 3 to 5 years where you are not supposed to repay in full... there will be a penalty clause. It depends on banks.
Loans can be offered in various forms, flexible or non flexible. Some of my loans are coupled with a current deposit account where the interests square off with the loan interests, as a result, if you have excess money, you just deposit them and that saves you interests. If you are short at times, you can withdraw the excesses.

 

[Investor]

I sold off everything I had in KL and Penang, cause despite having agents and even offering relatives up to 20%
of rental value monthly just to collect the rent is a huge problem, also tenants are constantly moving, late payment,
and lots of maintenance issues you have to personally handle cause the KL / Penang agents, even relatives too busy
to help you. Even if rent our to corporations also same problems arose, so better u get at ZONE B, Iskandar Malaysia,
is best nearby if anything even for invesment u can do it via a day trip, dont forget we here in Singapore each person
already doing 2 persons workload where got time to handle far far away properties ? For "remote control investment"
forget Malaysia, go to New Zealand, Australia is best, so far I dont have any problems at all as my agent handles everything
down to the replacement of a broken cup, chair etc ! Well just my own experience with KL, Penang, Nz, Aus Property "investment".

Iskandar Malaysia Nusajaya Is best.. "Zone B" ! Where else got "whole world in one city " Legoland, Harbour, Hello Kitty, 8 Universities - MDIS,RAS,NMIT,UR,etc etc, Hospital we can use our CPF, Race track, Pinewood TV etc etc...Giant Tesco Aeon Mall Of Medini -
No need waste time look anywhere else liow !

Care to share your nightmares of renting out KL Penang Properties too... Pls do we all want to know ....

Hmmm..rental problems. Yes I do have some. A company rented one of my factory for some 10 years and then the partners broke up. Someone though someone else is paying the rent, so it was unpaid for few months. Then I got rid of them but then found out they have unpaid electricity bills amounting to $4k. The whole place was a complete mess and rubbish dump when I took back the unit. It cost me 50k to do the place up before I find another tenant.

Then i got another one. This fellow rented my house for many many years. I decided to increase the rental by a mere $50 and that tenant told me stories he is old and cannot afford...and in the end, the rental remained unchanged after 12 years!! Sometimes just give and take....afterall he pays on time and old tenant.
Also there are other cases that tenant put in so much of leftovers in the kitchen sink that I have to fix new underground drainage pipes...I actually asked myself is it worth all the trouble....and that house remained tenanted.

These days I just tell any tenants if their place got problems, just get a contractor to fix it and deduct from the rentals...very stress on these issues

Last but not least, I got tenants who just say they don't have money...after a few times, I felt embarrassed to collect rent rather than the tenant who felt bad they cannot pay...sigh....

So being a landlord is no fun...

So sad to hear rental problems.

Thats why important to buy where u can everyday go (or at least within the 30mins to max 55mins drive raduis) and be able to "watch out like a eagle" over your property in Malaysia.

Another real life story on renter problem in malaysia :-

I had one tenant for my KL property, via a KL agent (I was then based in Singapore) she was from east malaysia and was a in some executive, so I thought it be ok, but later she, keep giving excuses, sick, medical bill, mother sick, husband loss job etc etc, then i kept giving discount even up to 30% of the rent, and still they left with 4 months rent due, the whole apartment was flooded with rubbish till u can't walk.

I had to take 3 days leave together with 3 other family members, drove down for 4 hours trip (SG-KL) then we had to clear everything ..OMG ..You wont believe it if i told u the details.. everything was damaged, the Kitchen doors were all torn out, sinks were sagging (were they sitting on the sink or what?), all Tv were damaged, etc etc..all these despite my kl agent, my neighbors and me being so nice to them.

Anyway long story short... I did an express renovation paid RM40k for it and was done in about 2 weeks.. At the end of that 2nd week some other tenant staying there passed by my unit while i so happen to be there while the renovation was at final stages.

They asked me if i renting out ...(ooohhh here we go again, no thanks unless I stay KL la) so, told them I am selling, and the rest is history ...they bought it and that was one burden less... So don't think you a nice landlord and everything be okie...it make no difference...

Now of these days I install CCTV in all my rented properties (In Iskandar) and all must be 30 - 55 mins drive radius from where I am.

I collect min 3 months deposit PLUS 1 Advance rental PLUS you must have I screen thru their profile by calling their HR to verify their work history PLUS compulsory cleaner to go clean every week and I do spot check every month same time as the air condition servicing.

You really dont have a choice cause the "Renter Market in Malaysia" a whole different wild beast that will eat u alive ... No amount of phone calls, sms reminders, letters, lawyer letter gonna help you (not like in sg really works) as the law here in SG is en forcible.

In Malaysia, jungle rules, so, 3 months is a must plus 1 advance. Net line is needed so u can install the CCTV in the main hall, and incoming tel line is needed in the main hall plus u really to go down to lock up the unit if need be. Also get really for many many pity stories, just listen and u go to be firm and say ok but still rent is payble, and never offer discounts and it get worst if u do that. So for me every time pity story comes i listen but after that i will still charge interest of Rm50 perday for any late payments. So far touch wood it works !

In NZ, so far touch wood no such problems yet face by me... maybe culture different ?

u are right, think its the culture. If they are not even scares of authorities amd do not pay tax and summons, you can roughly guess their attitude towards rental.

So far all my units in KL like Marc and Lot 163 are leased and managed by Ascott and Fraser Hospitality (both Singaporean companies), save me the trouble, they will deposit the rental for me quarterly or monthly in advance.

Only exception is ONE KL, which I bought as second home, if someone who is willing to pay the price in advance for 3-6 months rental, I will be more than happy to let also. But I definitely include cleaning into the package (3 times a week). Cos short rental they have less time to "personalise" the place to their liking.

And another thing that I realise about rental over the years... just my own experience n tots

When I am heavily leveraged in the initial years, I tend to give in more to tenants cos at their mercy, very dependent on their rental to pay for my own instalments. So when lease renewal is due, I also fear that they will not renew if I raised the rental too much and fear that I cannot withstand any vacancy loss or agent commission for finding new rental.

Psychological thingy.... when I am less geared and not so dependent on their rental, I realise my voice become louder. And letting agents represent you is a good thing too. Find a good agent that represent you and avoid contact with the tenant. They can't size u up that way. Sometimes, its worthwhile paying that extra fee for the agent to work wholeheartedly for you and take care of the property. And when it comes to increasing rental or lease renewal, it would be easier. Cos the tenant know the agent would be happier to change tenant cos he earn more commisssion.

Jus my own tots..

So right now my leverage is more concentrated on properties that come with lease management & partnership with operators like Ascott n Frasers that are reputable and genuine, whereby rack rates are constantly growing at 5% per annum and occupancy of 80% and above. Dun buy into those that come with GRR for just 2 years. You need to identify the real genuine ones and establish a long term partnership for your cashflows. Once you have a base, you can focus the icing on the potential cap gain property units.

the rest of the properties that dun have such arrangements, I will be less or zero gearing so that I can be abit more adventurous on them

Wow, thanks everyone(Flyer380, Funniman and Difris) for sharing your experiences on rental and giving your precious advices. It definitely benefitted me a lot, have a great Sunday guys

 

[DCputeri]

Do you know those banks financed encorp project? Got a friend who has a unit but exploring on the loan package.

Many of the loans have lock in period between 3 to 5 years where you are not supposed to repay in full... there will be a penalty clause. It depends on banks.
Loans can be offered in various forms, flexible or non flexible. Some of my loans are coupled with a current deposit account where the interests square off with the loan interests, as a result, if you have excess money, you just deposit them and that saves you interests. If you are short at times, you can withdraw the excesses.

 

[Funniman]

My tots are I rather collect lower rentals than market rates as long as they don't give me problems.
Afterall, the FD rates is so low at 3% these days. Low gearing is the best way of managing rental markets and having the highest returns is not always the best form of getting your max. yield.

So right now my leverage is more concentrated on properties that come with lease management & partnership with operators like Ascott n Frasers that are reputable and genuine, whereby rack rates are constantly growing at 5% per annum and occupancy of 80% and above. Dun buy into those that come with GRR for just 2 years. You need to identify the real genuine ones and establish a long term partnership for your cashflows. Once you have a base, you can focus the icing on the potential cap gain property units.

the rest of the properties that dun have such arrangements, I will be less or zero gearing so that I can be abit more adventurous on them

 

[Funniman]

I think the panel banks for Encorp are: Maybank, Hong Leong, UOB, MBSB,OCBC and Public Bank.

Do you know those banks financed encorp project? Got a friend who has a unit but exploring on the loan package.

 

[Dfiris]

My tots are I rather collect lower rentals than market rates as long as they don't give me problems.
Afterall, the FD rates is so low at 3% these days. Low gearing is the best way of managing rental markets and having the highest returns is not always the best form of getting your max. yield.

you are right. Anyway I am not a malaysian, so k only have maximun RM10m loans in malaysia,
so got to allocate wisely

 

[DCputeri]

Make sense for malaysian who can afford to buy in singapore as there will be better rental yield and appreciation in capital as well as exchange rate.

I know I know . I just could not afford properties in Spore...so have to make do in KL.:(

 

[Funniman]

Make sense for malaysian who can afford to buy in singapore as there will be better rental yield and appreciation in capital as well as exchange rate.

Problem is the cheapest around is at least S$1200psf which workout to be RM3000psf. That too is in places like Bukit Timah areas.
With that type of money, I can get freehold quality property in CBD KL. Though the yield is higher in Spore, it kinda square off with KL area which is bigger in size and quality wise. Therefore, as far as rental is concerned, the quantum you get is more or less the same.
Next is the capital appreciation. If you bought 10 years ago, you have much appreciation from then to now. But if you buy the same now as a new investor, the appreciation would be as not be high as new properties are expensive. There's little room for growth. Even the impending Fire Sale as a result of the new property law would not help as much. There's too much restrictions on foreigners buying into Spore on the cooling measures.

 

[DCputeri]

Do you ringgit will strengthen against SGD after election or will continue to weaken?

Problem is the cheapest around is at least S$1200psf which workout to be RM3000psf. That too is in places like Bukit Timah areas.
With that type of money, I can get freehold quality property in CBD KL. Though the yield is higher in Spore, it kinda square off with KL area which is bigger in size and quality wise. Therefore, as far as rental is concerned, the quantum you get is more or less the same.
Next is the capital appreciation. If you bought 10 years ago, you have much appreciation from then to now. But if you buy the same now as a new investor, the appreciation would be as not be high as new properties are expensive. There's little room for growth. Even the impending Fire Sale as a result of the new property law would not help as much. There's too much restrictions on foreigners buying into Spore on the cooling measures.

 

[Funniman]

Do you ringgit will strengthen against SGD after election or will continue to weaken?

I am not a economist but I will try to answer from layman point.

Malaysia is very dependent on exports and FDIs are very important. In face of world fiscal cliffs and bad economies, everyone will be trying to sell what they produce notably China, UK and Europe. If your currency is strong, your goods will be expensive to those importers of your goods. Likewise investors will have to pay more to bring investments to Malaysia.

Therefore if I am Bank Negara, I would make sure the Ringgit remained stable or weaker "very gradually" over time in order to stay relevant. When there's export, factories is working, then you have investments and spur on activities. Population at large would have jobs who would be able to buy cars and properties.

That's my 2 sen.

 

[Dfiris]

Problem is the cheapest around is at least S$1200psf which workout to be RM3000psf. That too is in places like Bukit Timah areas.
With that type of money, I can get freehold quality property in CBD KL. Though the yield is higher in Spore, it kinda square off with KL area which is bigger in size and quality wise. Therefore, as far as rental is concerned, the quantum you get is more or less the same.
Next is the capital appreciation. If you bought 10 years ago, you have much appreciation from then to now. But if you buy the same now as a new investor, the appreciation would be as not be high as new properties are expensive. There's little room for growth. Even the impending Fire Sale as a result of the new property law would not help as much. There's too much restrictions on foreigners buying into Spore on the cooling measures.

I agree with Funniman (cos I am vested in Malaysia now

A few things to watch out:

Starting Jan 2015, first batch of buyers whom come out of the Extra Seller Stamp Duty will start to sell

The 100k units of residential will all enter the market ard that time.

Adding to rental pressure will be the government tightening policies on foreign labour n talents.

If QE3 works, US and Europe will recover and the backflow of capital will put an end to the mass liquidity in Singapore.

Banks wil start to tighten and rates will start to go up.

Malaysia will face the same riak as well but not as much cos its residential market got leas foreign buyers at 2% as compared to Singapore's 30%.

Malaysian currency is strong too just that SGD is stronger in the last few years.

But all these only time k tell reallly...

 

[Dfiris]

I am not a economist but I will try to answer from layman point.

Malaysia is very dependent on exports and FDIs are very important. In face of world fiscal cliffs and bad economies, everyone will be trying to sell what they produce notably China, UK and Europe. If your currency is strong, your goods will be expensive to those importers of your goods. Likewise investors will have to pay more to bring investments to Malaysia.

Therefore if I am Bank Negara, I would make sure the Ringgit remained stable or weaker "very gradually" over time in order to stay relevant. When there's export, factories is working, then you have investments and spur on activities. Population at large would have jobs who would be able to buy cars and properties.

That's my 2 sen.

A very simple and rough calculation.

Over the last 10 years, Ringit has depreciated 10% against SGD.

So 1% per year.

And risk free FD ratea is 2% more (3% - 1%)

So there is stil gain if you choose the ringit

 

[Dfiris]

And I forgot to mention that inflation is lower in malaysia

 

[Funniman]

Malaysia has a reputation to make sure these hot money does not flow in and out easily. That's why the current economy is still doing well compared to many other countries.

I agree with Funniman (cos I am vested in Malaysia now

A few things to watch out:

Starting Jan 2015, first batch of buyers whom come out of the Extra Seller Stamp Duty will start to sell

The 100k units of residential will all enter the market ard that time.

Adding to rental pressure will be the government tightening policies on foreign labour n talents.

If QE3 works, US and Europe will recover and the backflow of capital will put an end to the mass liquidity in Singapore.

Banks wil start to tighten and rates will start to go up.

Malaysia will face the same riak as well but not as much cos its residential market got leas foreign buyers at 2% as compared to Singapore's 30%.

Malaysian currency is strong too just that SGD is stronger in the last few years.

But all these only time k tell reallly...

 

[Funniman]

Our Bank Negara, Dr Zeti has been voted among top Global National Bank Governor for the last 3 years consecutively.

A very simple and rough calculation.

Over the last 10 years, Ringit has depreciated 10% against SGD.

So 1% per year.

And risk free FD ratea is 2% more (3% - 1%)

So there is stil gain if you choose the ringit

 

[DCputeri]

10 years ago SGD vs RM is about 2.167. Hence, depreciation is about 14%.

A very simple and rough calculation.

Over the last 10 years, Ringit has depreciated 10% against SGD.

So 1% per year.

And risk free FD ratea is 2% more (3% - 1%)

So there is stil gain if you choose the ringit

 

[Funniman]

And I forgot to mention that inflation is lower in malaysia

Having weaker Ringgit means lesser purchasing power but Malaysia is not a nett importer country. Since last financial crisis in 97, the economy had changed its direction in emphasising on local economy against the dependency on external economy. That's why inflation is lower.

 

[DCputeri]

If you follow the exchange trend one can really observe the weakening of MYR against SGD in 1997 with July 1997(1.7), Aug (1.8), Sept (1.9), Oct & Nov (2.1) and Dec 1997(2.29).

Having weaker Ringgit means lesser purchasing power but Malaysia is not a nett importer country. Since last financial crisis in 97, the economy had changed its direction in emphasising on local economy against the dependency on external economy. That's why inflation is lower.

 

[Dfiris]

If you follow the exchange trend one can really observe the weakening of MYR against SGD in 1997 with July 1997(1.7), Aug (1.8), Sept (1.9), Oct & Nov (2.1) and Dec 1997(2.29).

soros effect

 

[tutucake]

ur experience with ur KL property was horrifying....

Did that tenant give a 2 mths rental deposit which you can default if the house is not in "tenantable condition?

they owe u 4 mths of rental...how did u make them pay in the end? Lock the gates?

By installing CCTV, people might not want to rent ur place due to privacy reasons....no one like to be 'watched'

unless ur unit is very exclusive and there only one unit available for rental in the 2km radius....else i think it's hard to market ur unit for rental... no?

So sad to hear rental problems.

Thats why important to buy where u can everyday go (or at least within the 30mins to max 55mins drive raduis) and be able to "watch out like a eagle" over your property in Malaysia.

Another real life story on renter problem in malaysia :-

I had one tenant for my KL property, via a KL agent (I was then based in Singapore) she was from east malaysia and was a in some executive, so I thought it be ok, but later she, keep giving excuses, sick, medical bill, mother sick, husband loss job etc etc, then i kept giving discount even up to 30% of the rent, and still they left with 4 months rent due, the whole apartment was flooded with rubbish till u can't walk.

I had to take 3 days leave together with 3 other family members, drove down for 4 hours trip (SG-KL) then we had to clear everything ..OMG ..You wont believe it if i told u the details.. everything was damaged, the Kitchen doors were all torn out, sinks were sagging (were they sitting on the sink or what?), all Tv were damaged, etc etc..all these despite my kl agent, my neighbors and me being so nice to them.

Anyway long story short... I did an express renovation paid RM40k for it and was done in about 2 weeks.. At the end of that 2nd week some other tenant staying there passed by my unit while i so happen to be there while the renovation was at final stages.

They asked me if i renting out ...(ooohhh here we go again, no thanks unless I stay KL la) so, told them I am selling, and the rest is history ...they bought it and that was one burden less... So don't think you a nice landlord and everything be okie...it make no difference...

Now of these days I install CCTV in all my rented properties (In Iskandar) and all must be 30 - 55 mins drive radius from where I am.

I collect min 3 months deposit PLUS 1 Advance rental PLUS you must have I screen thru their profile by calling their HR to verify their work history PLUS compulsory cleaner to go clean every week and I do spot check every month same time as the air condition servicing.

You really dont have a choice cause the "Renter Market in Malaysia" a whole different wild beast that will eat u alive ... No amount of phone calls, sms reminders, letters, lawyer letter gonna help you (not like in sg really works) as the law here in SG is en forcible.

In Malaysia, jungle rules, so, 3 months is a must plus 1 advance. Net line is needed so u can install the CCTV in the main hall, and incoming tel line is needed in the main hall plus u really to go down to lock up the unit if need be. Also get really for many many pity stories, just listen and u go to be firm and say ok but still rent is payble, and never offer discounts and it get worst if u do that. So for me every time pity story comes i listen but after that i will still charge interest of Rm50 perday for any late payments. So far touch wood it works !

In NZ, so far touch wood no such problems yet face by me... maybe culture different ?