By ANGIE NG from The Star
TO achieve good return on investment from the property market, one should be a risk taker and take positions that go against the general market sentiment.
“Be a contrarian by buying during a property market crisis and selling during the boom time,” advised veteran property investor Dr Peter Yee, who recently released his maiden book, You Can Become Rich In Property.
Yee, a remisier from 1995 to 2000, said he had benefited twice from using the strategy - the first time when he bought his first house in 1984 for RM99,000 and sold it in 1995 for RM180,000 and the second when his RM365,000 house that he bought in 1996 was sold for RM640,000 this year.
He has so far bought 14 properties, including terraced houses, bungalows and shop offices.
Rental income and the sale of six properties have earned him profits of more than RM1mil.
“It is possible to wean oneself from a stereotype existence towards financial freedom and a more balanced life. Ultimately, hands-on experience and learning from one’s success and failure is still the best teacher in the property game,” Yee said.
Successful property investment is an ongoing journey, a cumulative effort that requires careful planning.
“Property investors must leverage on the property market cycle, which follows closely the economic cycle. Buy on the upcycle and sell on the way down,” he added.
Malaysia’s property market cycle, from one bull run to the next, takes about 13 years, which means there are plenty of opportunities to make money from viable property deals.
Yee gave some general rules to follow. “For budding investors, the key is to go for capital appreciation by opting for landed property in good locations. Landed residential properties offer better potential for capital appreciation,” he said.
Yee said it was also possible to become rich by buying one’s own home if the same rules were followed.
Firstly, it is important to buy the right property in the right location, preferably near the direction of growth, with amenities including shops, schools and proximity to highways and roads, as the price had not appreciated much yet.
Good feng shui and neighbourhood as well as good physical condition are also important considerations.
“Rather than venturing into a completely alien market, the success factor will be higher if you buy in a familiar locality,” he noted.
Those who opt for high-rise residences should look around selective locations, especially in strong expatriate market, in order to reap net cash flow from rental income.
For commercial property such as shops, his advice is to buy ready-built units with ready tenants to enjoy immediate rental income.
Yee also advised property investors to take up loans that were of the highest quantum and tenure so that one’s capital resources could be spread out to purchase other properties.
“Always look for bargain buys, and a good guide will be properties that are priced at least 20% below market price. The best time to pick up such stock will be during a property bust cycle,” he added.
To avoid unnecessary complications, one should ensure the property can be easily financed and transferred.
Yee said that to be a successful property investor, one must have a holistic property investment plan for the children’s education, retirement and a balanced life.
“The plan will act as a vehicle to take you from where you are financially today to where you want to be in the future,” he said.
According to Yee, it is important to have a personal strategic property investment plan that takes into consideration one’s age, current financial status, current stage of the property cycle, possible economic scenarios, viable investment strategies, and personal vision and goals for the development of one's own 20-year property investment strategy plan.
On the things to avoid, he said: “Do not be carried away and become financially over-committed.”
Investors should also not expect a quick return on investment but must learn to be patient and wait for the right time to transact their deals.
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