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  #81 (permalink)  
Old 16-01-2013, 11:41 PM
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Originally Posted by Zhang View Post
Sure, just call me Zhang.



I was looking into this seriously over the past month. Am inclined to look further into JB Sentral - effectively to bet on the MRT at Tanjung Puteri.

You're right in that it's not confirmed, but this is probably when the arbitrage game is still relevant.

What I gathered from internet sources are as follows (so have to take with a grain of salt):-
- Heads of agreement on MRT link between Singapore and Malaysia agreed at high level in 2010 (together with the land swap)
- Feasibility study for RTS (MRT link) completed and submitted to both governments end Nov 2012
- Results of feasibility study to be announced either Q1 or Q3 2013
- If its a go, detailed planning to proceed in 2014
- If its a go post detailed planning, target completion is 2018 or 2019

So the next question is: how to effect the bet ie via buying a new condo, a resale condo, raw land or landed.

Raw land and landed is out because there is little raw land in the vicinity, and resale landed is apparently very difficult for foreigners to get approval for.

New condos, there are quite a few to look at, and all are being heavily marketed in Singapore i.e. closest to the CIQ (or the MRT location) are Paragon Suites (next to Lion Hotel) and a new development marketed by Norman Sia (which is next to City Square). Both are about RM800 to 1000 psf.

I dug in a bit deeper and found this condo called Orchid View, right next to the CIQ. About 12-yr old, and get this - going for RM350 psf. So am looking into that now.

But a bit frustrating because the sellers have raised the price almost 15% since I started looking at it. Let's see.

M'sia-S'pore Rapid Transit System feasibility study to be ready by end-Nov

A welcome coming together of two sovereign neighbours

Value Investor Research on KLSE Market: Transport: Singapore link to Tanjung Puteri land?

Hey Zhang,

Bit busy these days will try to answer when I can.

I like your views, very similar to what I look for as well. Okay I will give you a low down on what I know

I’ve seen the feasibility studies, for the MRT. The proposal is to be underground and its pretty next to the Komplex, according to the explanations at the time I believe there are only a few possible places to have it due to existing structures and requirements which needed the station to be positioned as such. These were only proposals though.

I do not have any hard details with regards to actual dates, but I should be making some inquiries instead of leaving it like that

As for investment vehicle for the city area like Johor I will probably go for condo if residential and if commercial I will consider shop house. I don’t think its impossible to get landed/Shop house the procedure will be very tricky. I have friends who families do property related business in Msia I will consult them if I go down this route, I suggest you make sure you got your contacts if you want to look into this avenue as well. Raw land I am not sure enough on the Msia market as yet to take the risk.

Generally I don’t look at new builds in Singapore so if I look at Malaysia I will probably look for older buildings as well unless I see a killer deal (i.e New building with upcoming attractions. I just find those new builds too damn expensive valuation wise (you may differ from my approach).

Interestingly enough I also looked at Orchid View before, I only found one apartment for sale and tried contacting the agent but no reply so forgot about it. And I do like the location being so near the CIQ.

From your views its seems you are more familiar with the market property scene than I am, I've all along focused on the SG market. It’s probably one of those comfort zone things that if I move out and familiarize myself with the market and actually invest the first I might actually be less hesitant.



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  #82 (permalink)  
Old 17-01-2013, 01:02 AM
Zhang
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Hi Mr Zhang

Just a word of caution before you plough your hard earn money into investing into Msia esp since theres a lot of media hype being play up on Iskandar Development etc.

Before you even talk about buying a property anywhere in the world. Always always ask yourself what do you intend to buy a property for? Investing eg Flipping, Renting out or for Retiring or Staying?

If you cannot even answer the above question, my advise is take that money and put it elsewhere. Let me share with you some tips on investing (if thats your intention) in Msia esp in Iskandar/Nusajaya:

1) Govt regulations ->
Very fickle, can change every election year today say RM500k restriction on foreign ownership of property, tomorrow is RM 1million. My question to you is DO YOU know the implications for this?

If you had bought at RM500k to satisfy the RM500k restriction which may be a good deal for you, think again, how much do you need to sell it now? RM 1million (if sudden change in ruling) now how many investors will be willing to pay RM 1 million for a second house when they can get a new one at RM 1 million at an even better location with better view.

FYI, the Thomson line to be extended into Johor is still in planning stages. Plans can and will change depending on the mood of the Msia govt.

2) Tenant ->
Forget about renting to local. Why do I say so? Take a look around Iskandar/Nusajaya, besides manufacturing, education hubs, hospitals, theme parks etc are they any big financial institutions or MNC around? If no, next think about the kind of tenants you going to get. Do you think they can pay that kind of sky high rent with their meagre salary?
Oh you may say I can rent to expats then, think again, if you had that in mind, 100 others will also have that in mind, do you think you can get the kind of rental yield you want?

3) Land size
Do you know how big Msia is or even Johor? Now where is the property value when anywhere (as long as govt regulations are met) can be build and promise by developer that this piece of land will be the next paradise. FYI, our dear sinkie govt will not help you in the event your property value tank coz its not their business eg think CLOB in 1998.

Here are 3 tips for you to consider if you are investing, I have more but I am too tired to mention all of them. I am just using Johor as an example. But you may say I am talking about KL, but I can tell you its sama sama even for Penang coz its all under Malaysia.

If you are planning to stay or retire there, it will be a totally different story. Why am I mentioning all these? Reason I dont want to see another so called "investor" lose his shirt or pants again esp after the 1998 Asia Financial Crisis.
You raise valid points - not in the most modest or polite manner, but valid points nonetheless.

I think the key point to go in with your eyes open. Know what the investment thesis is, know how much you are willing to risk, and know the potential downside.

If you go into malaysia, and then get surprised that there is no rental, well, you haven't done your homework. Or for that matter, get surprised the MRT is not built, or that the government change their policies. Those are known risks - and I venture, risks that have been priced in, to a degree.

My investment thesis is clear. Its an MRT bet. Size wise, the bet is intended to give me potentially healthy upside if I'm right, without hurting me too badly if I'm completely wrong.

Downside analysis then.
1. Capital Value Losses - Look, its S$50k downpayment at RM350 psf, right next to City Square / CIQ. Even if housing prices crash, I think the guy that bought Paragon Suites next door at RM900 psf is going get hit before I get hit, so capital value wise I should be ok.

2. SGD Appreciation - My nett exposure is S$50k. Rest of it is hedged via a RM loan.

3. Rental risk - Worst case I do not get rental for 6 yrs while waiting for the MRT bet. Including maintenance of RM400 per month, its S$1k per month, so max S$72k. Not a small amount, but won't affect my lifestyle in the slightest. And this is the biggest risk, but I think it can be mitigated if I accept reduced rental.

Potential upside ? If MRT materialises, and surrounding condos increase to RM1.2k psf to 1.5k psf, then I think RM700 psf is not a massive stretch. And if the SGD depreciates to the long term average of 2.2:1 (against 2.5:1 now), and if I manage to lock in rental, then my S$50k becomes S$300k.

Very limited downside, potentially meaningful upside.

Why not Singapore, you then ask. Well, I'd like to due to familiarity, safety etc. But I think at the current time, the potential downside is definitely more than the potential upside. And also, because the sums are so large, one mistake is definitely going to have the potential to materially affect my lifestyle.

But to each his own. I've done my calculations, and am happy with my investment thesis, warts, risks and all.



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  #83 (permalink)  
Old 17-01-2013, 10:00 PM
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Quote:
Originally Posted by Zhang View Post
You raise valid points - not in the most modest or polite manner, but valid points nonetheless.

I think the key point to go in with your eyes open. Know what the investment thesis is, know how much you are willing to risk, and know the potential downside.

If you go into malaysia, and then get surprised that there is no rental, well, you haven't done your homework. Or for that matter, get surprised the MRT is not built, or that the government change their policies. Those are known risks - and I venture, risks that have been priced in, to a degree.

My investment thesis is clear. Its an MRT bet. Size wise, the bet is intended to give me potentially healthy upside if I'm right, without hurting me too badly if I'm completely wrong.

Downside analysis then.
1. Capital Value Losses - Look, its S$50k downpayment at RM350 psf, right next to City Square / CIQ. Even if housing prices crash, I think the guy that bought Paragon Suites next door at RM900 psf is going get hit before I get hit, so capital value wise I should be ok.

2. SGD Appreciation - My nett exposure is S$50k. Rest of it is hedged via a RM loan.

3. Rental risk - Worst case I do not get rental for 6 yrs while waiting for the MRT bet. Including maintenance of RM400 per month, its S$1k per month, so max S$72k. Not a small amount, but won't affect my lifestyle in the slightest. And this is the biggest risk, but I think it can be mitigated if I accept reduced rental.

Potential upside ? If MRT materialises, and surrounding condos increase to RM1.2k psf to 1.5k psf, then I think RM700 psf is not a massive stretch. And if the SGD depreciates to the long term average of 2.2:1 (against 2.5:1 now), and if I manage to lock in rental, then my S$50k becomes S$300k.

Very limited downside, potentially meaningful upside.

Why not Singapore, you then ask. Well, I'd like to due to familiarity, safety etc. But I think at the current time, the potential downside is definitely more than the potential upside. And also, because the sums are so large, one mistake is definitely going to have the potential to materially affect my lifestyle.

But to each his own. I've done my calculations, and am happy with my investment thesis, warts, risks and all.

Totally agreed, the well intention was there but the tone could be done without. Made many assumptions about your knowledge on the market which quite oddly is actually not the case judging from your earlier post.

I'll get back to your 2nd point in a bit.

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  #84 (permalink)  
Old 17-01-2013, 10:22 PM
Zhang
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Totally agreed, the well intention was there but the tone could be done without. Made many assumptions about your knowledge on the market which quite oddly is actually not the case judging from your earlier post.

I'll get back to your 2nd point in a bit.
Thanks Tracker.

Re your point on shophouses, I'm open but the prices for the ones I saw were pretty steep, so couldn't get myself to jump in.

Oh ya, before I forget, if you are keen on Orchid View, can check in with Jerry - he'll probably refer you to another guy called Chua - or Gold Bridge Properties.

Think there are some units still avail. But the views for available units aren't great and most are low floor units. May not matter for investment unit if the primary bet is on location, but thought I'd flag it out anyways.

Condominium for Sale in Orchid View Condominium, Johor Bahru, Johor, Malaysia for RM 463,000

Condominium for Rent in Orchid View Condominium, Johor Bahru, Johor Bahru, Johor, Malaysia for RM 2,500
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  #85 (permalink)  
Old 17-01-2013, 11:34 PM
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Originally Posted by Zhang View Post
Thanks Tracker.

Re your point on shophouses, I'm open but the prices for the ones I saw were pretty steep, so couldn't get myself to jump in.

Oh ya, before I forget, if you are keen on Orchid View, can check in with Jerry - he'll probably refer you to another guy called Chua - or Gold Bridge Properties.

Think there are some units still avail. But the views for available units aren't great and most are low floor units. May not matter for investment unit if the primary bet is on location, but thought I'd flag it out anyways.

Condominium for Sale in Orchid View Condominium, Johor Bahru, Johor, Malaysia for RM 463,000

Condominium for Rent in Orchid View Condominium, Johor Bahru, Johor Bahru, Johor, Malaysia for RM 2,500
Hi Zhang,

Thanks for the links, maybe you wanna consider doing kopi one day. Easier to share investment ideas.
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  #86 (permalink)  
Old 18-01-2013, 08:16 PM
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The best investment today will be properties in the Jurong Lake District (JLD). with the development in the JLD and the new Jurong Region MRT line just announced, property values there will rise significantly, esp the landed properties there. These properties have a lot of price upside potential given their limited supply and huge demand.
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  #87 (permalink)  
Old 19-01-2013, 10:48 AM
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The best investment today will be properties in the Jurong Lake District (JLD). with the development in the JLD and the new Jurong Region MRT line just announced, property values there will rise significantly, esp the landed properties there. These properties have a lot of price upside potential given their limited supply and huge demand.
please go away, nobody wants to buy 99 year landed properties.


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  #88 (permalink)  
Old 19-01-2013, 11:58 AM
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Actually one way to invest in KL but yet have someone maintain it for you will be to buy/invest into a service apartment type private development. Though this may or may not pay-off given that a service apartment is subjected to the rules of the service provider.

I went to check out a few some years back, notable ones were my habitat and myhabitat2 ([ myHabitat2 ]) The build quality was fantastic, facilities were also great, my friend bought but I didn’t though. Last I heard he was making a good income flow but not sure about capital gains cause it was quite pricey when they wanted to sell it to us then.

Advantages of KL needless to say are stability and attraction to the capital for regular Malaysians looking to move to the city from the smaller towns, its an increasing number from what I know.

But if you are comfortable with JB I suggest you go for it and look into it seriously, the upfront entry is quite low at this moment so good to strike even if the prices are north of what you may have saw, regulations in the future may damper your plans. And I agree with your points about worse case the market takes a hit bad lose 50% at most you lose 100 -150K SGD, not small sum but compared to SG market where 75K could already be your stamp duty its not a life impacting crisis for yourself I am sure.

After the new cooling measures I think my plans for now are to focus on the SG market, just like 97 where a slew of measures came in to cool the market I am curious if this round will tip the market over, although with such low interest rates I am guessing not. However if interest rates go to say 2% I would think we’ll be in for a wild ride, if that happens you definitely wanna have some liquidity.

I checked out the area around great world as you mentioned but not Jln Mutiara area as I thought it to be a bit far from the MRT and the units there are bigger so it went outside of my quatum (need to put 40% downpayment now probably more). I saw some units nearer to Kellock Road (very small ones) which had a very good rental yield (4%) I will look in this area again if the market were to dip.

On your point about the cooling measures agreed that the latest rounds will lokc out PR and foreigners. With regards to financing I believe anyone who had paid 40% down in the previous measures would be quite comfortable in managing the outlay for the mortgage (assuming the 40% did not come from re- mortgaging his first property using increased valuation). Interest rates increase should be manageable for a few years assuming no tenancy (worse case they can slash rentals by half). If the values start falling badly then they might get hit if the bank ask to top up assuming the government don’t cut back on the measures first.

Another scenario would be once they initial mortgage on the investment property runs out and they have to refinance would they be subjected to the new terms? If so they may have to do a quick sell.

And with additional units hitting the market (according to govt) 200K units by 2016 it could also impact the market.

Too many points to consider and monitor.

I found a property blog about a lady who invested in property and apparently is very succesfful (small scale) very interesting read, check it out.She seems to organize meetups and such, might attend if it happens and time permits of course.
www. Property Soul
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  #89 (permalink)  
Old 19-01-2013, 12:00 PM
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please go away, nobody wants to buy 99 year landed properties.
Could be worthwhile if someone took the time and effort to subdivide and rent out small cubicles to foreign workers. Good returns from what I hear assuming one can manage them well lol. 8 maximum per house otherwise run afoul of the law, then again....

Not my cup of tea of course.

Zhang my other post went for moderation, maybe system think got inappropriate content lol
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  #90 (permalink)  
Old 19-01-2013, 12:49 PM
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Could be worthwhile if someone took the time and effort to subdivide and rent out small cubicles to foreign workers. Good returns from what I hear assuming one can manage them well lol. 8 maximum per house otherwise run afoul of the law, then again....

Not my cup of tea of course.

Zhang my other post went for moderation, maybe system think got inappropriate content lol
Lol didn't know this site has a moderator ! Very selective moderation, judging from some of the posts that have been allowed through !

Anyways happy to catch up for kopi if schedule fits. Drop me a note at [email protected].
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