Saturday, March 19, 2011

Formula to be Millionaires ( III)

Formula to be Millionaires (III)

So am I a millionaire? A lot of readers ask me. If you a millionaire, why do you bother to blog about making your first million in this blog. Frankly speaking, I do not have a million in cash but I can say proudly to you that I have a net worth of more than a million. I believe in investment, I believe that no matter what people told you before, there are still a lot of legal ways of making money.

First of all, I try to avoid buying bad/useless assets. The best example of this kind of asset is car. Some people might think that it is almost impossible for you to live in Malaysia if you do not have a car. I totally agree with that, if you are thinking of buying one. Buy within your means, what not considering a second hand car??

Secondly, before you can invest, you must save! Even just RM200 a month, I am happy to save regularly. I keep the money and when I have enough fund, I buy stocks, I buy property that give me long term gain if I hold to them. I even buy books to learn about investment!

Thirdly, spend your time wisely. I would prefer to attend a property/stock talk rather than sitting in front of TV watching AXN ' CSI' /' Leverage' or even 'Amazing Race'! Don't waste your time! Gain the knowledge and prepare yourself!

Fourthly, start small but dream BIG! Even only you only make RM1K this time, you can make RM10K, 100K or even RM10 million next time!

Lastly, yes, you must TAKE ACTION! It is pointless you are just dreaming and find out you wet your pant without taking any concrete and firm action!!

Saturday, March 12, 2011

Hidden Gem in Penang

Hidden Gem in Penang

Yes, as I told you before, for you to get a property that gives you 8% rental return is almost impossible in Penang. However, recently I noticed  an interesting trend in Penang property market. Yes, there is a hidden gem in Penang area that is left unnoticed for very long time!!

Bandar Tasek Mutiara, Simpang Ampat
If you ask me that next area in Penang that will prospers in the next 5-10 years, I have no choice but to tell you is Seberang Perai Selatan. Yes, this area is long left unnoticed by property developers and investors. And the good news is I think the property price in this area is likely to appreciate very fast in the next 5 years!!

Some of you might know that I come from Seberang Perai Selatan. I bought my first property in 2001. It is a terrace house in Bukit Tambun, Simpang Ampat. The purchase price was RM170K back then and sadly, the price never appreciated for the past 8 years. The good news is the launching price for a terrace house around Simpang Ampat is now around RM220K, That translates to almost 30% capital appreciation in 10 years which is 3% per annum.

But what suprises me most is I rented out my house recently at RM1100 per month!! Wow, that is a solid 7.7% rental return for a landed property!! I think you can't get it anywhere else in Penang except in seberang Perai Selatan!!

Sunday, March 06, 2011

Eight percent return on Property Investment??

Eight Percent Return on Property Investment??
I am a strong believer of property investment. However, a lot has been said about this investment. If you read your local newspaper- you might find different strategies to do this- no money down, positive cash flow, auctioned property etc etc.
Gurney Park in Penang Island

If you read about Robert Kiyosaki books, he mentiones about positive cash flow with good return on equity. I just attended a property talk in Penang and the speaker asked us to buy only property that gives you 8% return per annum based on property price. But the reality is- Can you find this type of property in Penang Island or even Singapore??

8% return per annum, that translates to RM2000 rental income for a RM300K property!! Can you get this type of property?? I have been living in Penang Island for the past 1 and half year and personally purchased 3 properties in Penang, I think 8% per annum return is almost impossible in Penang and Singapore if you are aiming at medium cost or high cost condominium.

How much the rental now in Sri York or Gurney park condominium in Penang?Yes, you are right, may be around RM2000-RM2500 per month but the selling price of these condominiums is well above RM500K now.

Therefore, I always aim for 6% per annum and if I combine a capital appreciation of 4% per annum, I am certainly very happy to buy the property without hesitation.

But if you ask me about then how to achieve cash flow if you are talking only about 6% per annum?? Yes, there are only 2 ways to do it- extend your home loan longer or pay more downpayment!