7 Investing tips
1 Know your area well
It’s always best to source for properties in areas you are familiar with, say the experts. Research the areas for six months to a year and speak to real estate agents, owners and people on the street, says See Kok Loong, a real estate agent and director of Metro Homes Sdn Bhd. “This is so you will be familiar with the market prices.”
Investor Winston Tan (not his real name) says even seemingly minute details such as location on roads could make a difference in prices. “For example, the wrong side of the Kuala Lumpur City Centre [KLCC] area is Ampang Hilir and the right side would be the KLCC area itself. This is because to get to the KLCC area from Ampang Hilir, one would have to make a big circle and encounter a traffic jam. Thus, the value in the Ampang Hilir area tends to be lower than that of KLCC.”
2 General area indicators
For a general indicator of good locations, look at rail transit maps, says Milan Doshi, financial trainer and author of How You Can Become a Multi-Millionaire Real Estate Investor.
“Any place that is about 15 minutes’ walk from rail transit stations would be good, especially for those working downtown [KL] as they won’t need to park their cars at the stations.”
Industrial areas would be good neighbourhoods to invest in as well. “Most factory owners would be looking for medium-cost apartments to house their workers. So, as long as it’s a short motorbike ride away, it’s a good buy. A good example would be Shah Alam.” See recommends mature and developed areas. “Buy where there is a little land and a very big population. Where there is more demand than supply, the seller is king. Also, areas foreigners like are likely spots for investors.”
Milan cautions against buying in up-and-coming areas as they are not established and could be risky buys. “Even though you might be able to get the property cheaply, it might not be easy to sell, because people are still moving into the area and basic amenities such as schools and supermarkets are not set up yet.”
3 Know your hotspots
Experts like well-known hotspots such as Bandar Utama, Brickfields, Bangsar, Mont’Kiara, Desa Sri Hartamas and the KLCC area. Main towns across Malaysia, especially Penang Island, where there are upcoming mega projects under the Ninth Malaysia Plan and the Iskandar development region in Johor will provide good deals, says See.
4 Timing
The best time is when the market is on an uptrend, says See. “Invest when the market looks like it’s going to remain bullish for the next two years.
Even if you are not buying properties at the cheapest prices, the bullish market will push prices up even further, so you still stand to make a gain.”
5 High-rise or landed?
Paul Khong, executive director of real estate consultancy Regroup Associates Sdn Bhd, says both landed properties and high-rise apartments in hotspots are attracting good prices. “The Four Seasons apartments in the KLCC area are already reported to be heading to RM2,000 psf, while the Plazzio, a high-end condo project in Sri Hartamas, is reaching a record-high of RM850 psf.
Prices of landed properties in Desa Sri Hartamas moved up, to RM980,000 last year for a 2-storey intermediate unit.”
“Most house buyers still like to have a piece of land and a house under their name rather than living in a strata cubicle in the air,” says Khong, adding this is evident in smaller towns outside the Klang Valley. “However, due to expensive land prices in the city, many have learnt to accept high-rise living.”
Milan says it is easier for investors to sell landed properties as buyers want to use them as homes as opposed to high-rise properties, which are usually rented out.
6 Use cash, not a bank loan
For those who want to flip properties within a few months, use your own cash in transactions rather than apply for bank loans. “Since the idea is to flip rather than stay in the property, there is no need to borrow money because the whole process of applying to a bank can take three to four months. Moreover, most banks have a lock-in period, so you might get caught with a penalty if you sell within the lock-in period,” says Milan.
7 Use the same people
In order to lower costs, use the same real estate agent to buy and sell properties, says See. Use the same lawyer to handle your sale and purchase agreement and the same
contractor for refurbishment. “Investors might be able to get discounted rates and save on costs".