Wong is a property investor turned property developer. Her first project will be an integrated commercial development called Qube in Shah Alam. Ng is the sales director for that project. Wong and Ng met each other in an Internet seminar and have since been formed a solid friendship and business partnership with each other.
Here are some of their answers from the live forum.
Question: Property prices are going up. Are there still many good deals out there?
Ng: The best investments I made were in the last three to five years. It is still possible to purchase properties that are below market value. When will the next depression be? I don’t know but I will still buy (properties). If you are a good customer, the bank will usually try to work something out with you should you face some cashflow problems.
Wong: I still buy properties every year. Previously, at one point, I bought properties every month.
Question: Please share the best location for commercial properties.
Wong: For commercial, you must look at the amenities, population and human and car traffic. If at a location, you can’t find parking, the property appreciation will be huge. I go for locations with more supply than demand. And I also purchase the best lots, which are corner or adjoining units.
Question: What “homework” should I do before investing?
Wong: Before investing, do lots of research. Before going to the unit, check its value and double check with the agent. Also, check the latest transacted price. You should know the location, its surroundings and available amenities. Don’t stay in the dark and also talk to your potential neighbours. I have more than 1,000 clippings of properties that I have visited before in my filing system.
Doshi: Know who to listen to. Some professionals such as bankers or lawyers, in all good intent, share their advise accordingly, but if they are not an investor, you should not listen to them 100%.
Question: Should I refinance my paid property?
Doshi: Take the longest possible loan with the least possible cash for property investment. Keep refinancing every three to five years.
Ng: One must love to borrow money. By borrowing, you are able to buy a few more properties. In a few years, the properties will appreciate and then when you refinance, you can buy more properties. Some people, they have a phobia of borrowing money from the bank. They are not able to sleep at night. If you are such a personality, then please do not refinance (laughs).
Question: I bought a freehold double storey link house (DSLH). Initially it was for my own stay. What’s your advice? Should I sell or hold the property? Completion is in approximately nine months’ time.
Ng: If there is still nine more months, then don’t worry first. In nine months also someone can already have a baby (laughs). Worry about it only when it is two to three months away from completion. Monitor the market momentum at that point and decide only then.
Question: I have a limited budget. Should I buy high-end or low cost?
Doshi: A few high-end or many low cost units. You can use the No-Money-Down strategy to buy many medium or low cost units. If it is a high-end unit, you can go for commercial. Personally, I would rather not buy a high-end condominium. If a unit is more than RM800,000, at that level the tenant pool is small as there’s an oversupply. In Bangkok, there’s more than 100,000 expatriates while Malaysia has about 30,000 to 40,000 expatriates.
Question: How do I avoid from being emotionally attached to a property?
Ng: Think of it like adoption. Adopt the property for three years and then sell it. Ask yourself, do you need the money. If you sell it, would you buy another better one? If you are afraid that you can’t find a better property, keep it and refinance it. It is advisable to refinance the property with the bank that the loan was taken from, as there would already be a borrowing relationship and you might get a better price.
Doshi: Always buy with the intention to keep or flip (sell). So when the time comes, you are not so emotional. Sometimes, I would not sell unless the price is too good.
Question: Should I resign?
Ng: Do you have seed money when you resign? Acquire the knowledge first.
Wong: In year 2002 to 2004, I was still working. You should get good cashflow before resigning. Employment is good for getting loans. The job is the vehicle for you to get loans for property investment.
Question: I found a a commercial development offers retail guarantee. Is that a good thing?
Doshi: The developer should ideally be the one handling the retail guarantee, and not some small two dollar company. Ask the agent, read the fine lines or check with your lawyer to see who the contract is between.
Ng: If you are a beginner, don’t be too ambitious. Zoom in and study a few areas that you are comfortable with. For residential units, you can go to websites. 70 to 80 percent of the information is there. For commercial units, there are limited shops. Read the papers to know what is going on.
Question: How do I evict bad tenants for commercial properties?
Wong: There are two ways – illegal and legal (laughs). To avoid bad tenants for commercial, check the tenants out. Check if the company directors are in any sort of bankruptcy situation, find out the nature of the business and do cross-reference checks.
For me, every three or four months, I send my team to check out the properties to see how the tenant’s business is doing. If they default the payment the first time, I will send a notice. After the third notice, if they still do not pay, I will then cut the water and electricity bill. It is advisable to have a separate utility account for tenants, so that when they do not pay, for example, the electricity, Tenaga chases the tenant, and not you.