Managing strata properties

I LIKE to highlight the rather difficult and controversial issue of the management (and maintenance) of stratified properties, particularly flats, apartments and condominiums, in the context of the proposed Strata Management Act, 2012 which is expected to be tabled during the upcoming session of Parliament.

The Building Management Association of Malaysia (BMAM) is the only multi-stakeholder organisation (established in 2009) representing the collective interests of chambers of commerce, developers, engineers, architects, shopping and high-rise complex managers, management corporations (MCs), joint management bodies (JMBs) and managing agents.

However, BMAM was not nvited to participate in the workshops and discussions held by the National Land Council and the Housing and Local Government Ministry when the draft Bill was deliberated, although the implementation of the Act will have consequences that will directly affect BMAM stakeholder-member organisations.

According to the information available to us, the Bill states that only licenced valuers who have been admitted as Property Managers pursuant to Section 21(1)(a) of the Valuers, Appraisers and Estate Agents Act, 1981 (VAEA Act) to manage and maintain stratified (or subdivided) buildings as managing agents.

No such restrictions exist in the current laws that regulate building management, namely the Strata Titles Act, 1985 (ST Act) and the Building and Common Property (Maintenance and Management) Act, 2007 (BCPMM Act).

Building management is a multi-disciplinary occupation and cannot be exclusive to the valuers alone.

The JMBs and MCs want to have the independence and opportunity to appoint any fit and proper person, or appropriate entity, as managing agent on a “willing seller-willing buyer” basis on mutually agreed terms and conditions.

The Bill, by restricting building management and maintenance to valuers, would create a monopoly, and is inconsistent with the spirit of the Competition Act, 2010, which clearly discourages the creation of monopolies.

Though building owners (JMBs and MCs) and Real Estate Investment Trusts (REITs) have been exempted from this ruling, most JMBs and MCs, led by volunteers, do not have the time, skill, expertise or experience to manage and maintain their buildings, and neither can they afford to appoint a registered property manager as a managing agent.

JMBs and MCs would be required to pay a management fee in compliance with their Fee Schedule, excluding other operating costs such as staff salaries, electricity, water, cleaning, security, etc.

We will soon see the mushrooming of more urban stratified slums and ghettos, thereby defeating the objectives of the Government’s squatter resettlement programmes and public housing projects.

The fiduciary responsibilities of the MCs and JMBs have been clearly stated in the ST Act and the BCPMM Act on the management of the Building Maintenance Fund and the Sinking Fund.

The managing agent appointed by the JMB or MC to manage and maintain the subject properties is only required to perform these functions for and on behalf of the JMB or MC. A registered property manager is therefore not required.

The MCs and JMBs only need building and facilities management for their common properties.

Since common properties and facilities cannot be sold, and most residential building owners do not lease their common properties to third parties as they would need them for their own use.

Many non-valuer managing agents have several years of experience in building and facilities management.

They have also been admitted as members and registered building managers by BMAM upon satisfying the required admission criteria.

They are qualified and skilled in building management, operations and facilities maintenance, and have also subscribed to a professional building management liability insurance policy entered into between a local insurance company and BMAM.

Any attempt by the ST Act to split managing agents as valuers and non-valuers will be detrimental to the growth and development of the building management industry in Malaysia.

It will result in the loss of valuable management talent in the industry. It will also have serious social implications on the upward career mobility of qualified and experienced local building managers, many of whom are bumiputras.

The Commissioner of Buildings (COB) should be the sole regulatory body to supervise and oversee the management and maintenance of stratified buildings in Malaysia.

The involvement of third parties, who have no ownership interests in the properties, will not only erode the COB’s authority but may also result in unnecessary layering, additional costs (with no proportionate increase in service quality), corruption, rent seeking and abuse of power.

 

PROF S. VENKATESWARAN

Secretary-general

Building Management Association of Malaysia

大馬房產成中國資金新目標

2011-11-28 15:17

• 

來自中國的發展商、企業以及個人投資者正在改變馬來西亞的房地產生態。

“雖沒投資新加坡物業那麼‘兇猛’，但中國企業買下吉隆坡整層寫字樓的故事並不少耳聞。”馬來西亞發展商陽光集團執行主席童貴旺說。

另一方面，中國發展商也在試水馬來西亞地產項目。11月初，一家來自中國河北的房地產企業――卓達集團宣佈將與馬來西亞伊斯干達投資公司合作，共同發展位於馬來西亞伊斯干達麥迪尼特區的住宅和商業項目，總投資額近40億元人民幣。

這成為馬來西亞麥迪尼特區的首個外資房地產投資項目，同時也是區內迄今最大的投資項目。

伊斯干達麥迪尼特區距離新加坡20分鐘車程，有兩座跨海大橋與新加坡相通，同時正在修建海底隧道，與新加坡高檔公寓動輒10萬元／平方公尺的價格相比，麥迪尼特區房價僅為新加坡的20至30%。

高力國際最新數據顯示，今年第三季度新加坡售出的私人住宅中，8.8%住宅被中國買家購得。

新加坡官方數據顯示，上半年，中國購房者首次超過印度尼西亞，成為新加坡私人住宅第一大外籍買家。

而中國買家投資新加坡物業的興趣如今也在向鄰國馬來西亞蔓延。

“有限的土地成本、發展商之間的激烈競爭以及當地較低的收入水平，是馬來西亞房價水平即使在整個東南亞都保持較低水平的原因。”童貴旺介紹。

在馬來西亞首都吉隆坡，100萬元人民幣即可買入距離市中心40分鐘車程、面積在200平方公尺以上的毗連別墅。

隆檳新山房產受歡迎

目前，中國投資者的身影正越來越多地出現在吉隆坡、較多華人聚集的檳城以及緊鄰新加坡的新山。

與一些發展中國家管制資本的做法不同，馬來西亞向外國房地產投資者提供了相對自由寬松的政策和 制度。外國投資者允許直接持有馬來西亞房產產權，可自由購置價值超過50萬令吉（約人民幣110萬元）的各類房產，且凡持有該房產滿五年後出售的，將一律 免征房產交易所得稅，此外，還能夠申請到最高為70%的房貸。

在今年9月於上海舉行的馬來西亞房地產投資論壇上，馬來西亞產業機構首席執行官Kumar表示，馬國物業的年租金回報率在5至6%，土地的年收益大約在4至6%，兩項相加，投資收益率在9至12%。

為鼓勵更多海外人士投資馬來西亞房地產，馬來西亞政府正在推行一項名為“馬來西亞我的第二故鄉”計劃，參與計劃的家庭除了可以獲得10年多次入境居留證之外，還將享有多項產業與稅務豁免獎勵。

截至2011年7月的統計數據顯示，中國公民佔到該計劃申請總人數的第一位。（星洲日報／投資致富‧產業話題）

Real Estate, Investment Strategies & Opportunities

A successful real estate investment relies heavily on the use of the right strategy; however, they largely depend on the requirements and desires of the individual property investor. The importance of going into an investment with a strategy mustn’t be underestimated. Your entire plan of action will be defined by the starting point of your investment journey and the outcome you want to achieve. However, this is also dependent on the amount of capital and cash flow you possess, not to mention your experience and risk-taking profile.

One of the most common to be recommended by any reputable real estate investment trust is the ‘Flip’ (short term investment strategy). This can be put into practise when purchasing an off-plan unit – a property which has not yet been built or is currently being constructed.

The unit is then sold, almost straight away, in most cases before the property has finished being built. In basic terms, this means it can’t be recognised as a property purchase because the unit is incomplete, therefore classes as a sale offering the option to purchase property. This strategy provides the opportunity for real estate investing at a low cost, leading to excellent capital appreciation rates. This is highly achievable in an emerging market where prices remain low. Then, once supply and demand has increased, the option is sold.

When it comes to real estate investment, UK strategies are no different from those applied to during overseas and another real estate investment strategy commonly used the world over is the ‘buy-to-let’. This involves the purchase of a resale property or off-plan unit. The investor must complete the purchase and keep hold of the property for a period of 2 to 5 years or longer. During this time, the property may be rented as a holiday or long-term let to generate an income. Then, when the time is right, the property is sold.

And as any well-established real estate investment group will tell you, the real estate investment opportunities to arise from this strategy will be to either maximise on capital appreciation by keeping hold of the investment until conditions in the property market start to display more positive changes, enabling an investor to sell at the highest price possible or maximise the income generated from letting.

Opting for the latter could also provide the investor with the added bonus of a having free accommodation should they choose to holiday in the area. Remember, maintaining a second property in a foreign country involves much more management than that of a property close to your home. However, there are many real estate investment services designed to help you - from practical investment support to basic pools, garden maintenance, rental administration, financing mortgage payments and much more.

Property Investment Strategy & Insights

Today there are a number of common property investment strategies being utilised by individual real estate investors. Each investment strategy is different, targeting a variety of asset classes, risk levels, potential returns and investment terms.

IPIN offers a selection of non-standard real estate-based investment strategies exclusively to members. We believe our proprietary strategies deliver enhanced investment returns with reduced investment risk. To learn more about the proprietary strategies available to members and view case studies from investing members.

Before choosing an appropriate property investment strategy it is important to define your overall investment objective and what you wish to gain from any investment. Once you have identified the investment strategy that best matches your requirements, you should research the due diligence that has been conducted as part of the investment proposal and, wherever possible, undertake your own research and due diligence.

Buy to let

Buy to let is simply purchasing a property and letting it out. Reasonable yields can be expected to be between 7-12%, although failure to consider variables prior to purchase can greatly affect this. Factors such as rising interest rates, ongoing maintenance costs, periods of vacancy or potentially even negative equity make the buy to let strategy increasingly difficult to successfully forecast under current market conditions. Extensive research and due diligence is strongly recommended to reduce your risk and liability. Buy to let carries with it landlord obligations and potential tax implications and hence is not suitable for investors looking for a hands-off strategy.

Funds

Property funds can allow incredible diversification for investors. By entering into a fund you are in essence investing into a piece of somebody else’s property. A benefit to property related funds is that entrance levels can be low and past performance on listed funds can be tracked and seen clearly prior to commitment. Remember though, as with any investment, past performance is no guarantee of future success. Returns will likely be lower than straight-forward property investment in the same sector, but risk is significantly reduced and investment terms much shorter.

REITs

Reits (real estate investment trusts) are becoming more widely available. Like funds, they permit extensive diversification and percentage payouts on profitable performance are set out by law in most cases. Reits are also trackable like funds meaning they can be fully researched and judged with respect to their performance. Low entry levels make them attractive to smaller investors and reits carry certain positive tax benefits.

Leaseback

The term leaseback is generally referred to with respect to an option that encourages long-term property investment (typically around 20 years) into property in France. The property owner sells the property usually at below market value then effectively rents it back off of the new owner, typically with pre-agreed usage rights. The financial benefits of the leaseback can be very impressive indeed, often guaranteeing rental yields and sizeable tax rebates, although often the original owner has buy-back rights which can potentially result in loss in some cases.

Hotel investment

A relatively new and growing real estate investment trend is the purchase of commercial hotel rooms by private investors. The most common model for hotel investment strategies is where the investor makes returns from the ongoing occupancy of his particular room, with or without personal usage rights. Provided a reputable hotel management company is behind the development and occupancy rates are good, this style of investment offers a relatively low entry, hands-off option with respectable returns and potential capital gain over the medium and long term.

Flipping

The process of buying and selling a property at a profit and within a short period of time is commonly referred to as "flipping". Under favourable market conditions this can be an extremely profitable property investment strategy - purchasing a property at below market value and profiting via capital appreciation whilst demand is high. Experienced property "flippers" will often progress to purchasing tired properties, renovating them and reselling to build in added profit. Given the strategy's reliance upon the ability to acquire a property sufficiently below market value and sell at a profit in a short space of time, flipping is currently viewed as carrying significant risk with likely associated costs.

Fractional

Fractional ownership is investing in property by purchasing one of a number of shares in an asset. As a part-owner of that asset you become the beneficiary of usage rights and any profit from capital appreciation or rental income proportionate to your share. Fractional properties are usually sold and managed by organisations who also claim a share of the property and the associated benefits. Historically, fractional property investment has differing reputations depending on the location of the asset. In the us and canada it has been marketed and promoted with success on large properties (usually on golf courses, ski lodges and lakeside holiday homes) with regulated brokers. In europe however, fractional property is still in its infancy (emerging as a result of lower lending rates with respect to ltv) and general lack of affordability. Presently there is little regulation and its profitability has yet to be proven.

Property Investment Portfolios & Advice

Possessing property investment portfolios can be a great way to increase your wealth. Typically, an investor will carry a number of different types of property investment in their portfolio, ranging from residential property to commercial and off-plan property. But as well as property, investors often showcase a variety of asset holdings such as bonds and shares. Keeping a diversified property investment portfolio is the key to making it a success.

Investment property portfolios are hugely advantageous – you can spread your money across a range of investments without having to depend solely on the returns from one single investment. So how does it all begin? Well, as with investments of any variety, it’s important to carry out as much research as you can about the principles involved before you have even started to view properties. Think about investment locations and whether or not you will want to be based close to your investment in order to manage it or whether you will use an agent.

Gather as much information as you can about the area you have chosen to purchase in.

Ask local estate agents about rental yields in the area and visit as many properties as possible. Many investors admit to viewing as many as 25 properties before committing to ‘The One’. Getting the very best price for your property is essential, so don’t be afraid to bargain and learn as much as you can about the seller’s personal circumstances – they might reveal a loophole that could bag you a better deal. Getting a full survey carried out is also important as any problems found will make you liable as a landlord if you plan to rent out the property. But on the bright side - if any structural problems are identified, you could use this to get the price down.

Usually, an investor will purchase the very first property for their portfolio using the equity from the home they currently own. Often, this is a property in need of renovation and can is bought for very low price tag. The next part of the process is to wait until the prices of both properties have increased in value, then a third property will be purchased and so on. The more property portfolio investments an investor obtains, the faster their equity will grow, allowing them to buy further properties. Always think ‘Location location location’. This phrase is still commonly used when it comes to investing in property anywhere in the world. The success of your property investment portfolio lies in the location of properties you possess. If they are close to amenities such as schools, shops and transport, they will unsurprisingly be more attractive to potential tenants and future buyers alike.

Commercial Property Investment & Advice

The process of securing a commercial property investment is in many ways similar to the purchasing of a Buy to Let investment: you need to carry out research into the type of premises required and the surrounding area, then borrow money from the bank and collect rent from a tenant. If you’re thinking of expanding a property portfolio which already consists of residential property, it makes perfect sense to create some variety by adding commercial property to your list of assets, especially at a time when house prices are seeing a decline.

Typically, the lease for commercial investment property will run for around 10 years. In the retail sector, this can stretch to 20 years or more, compared with just six to 12 months for residential leases. One of the main benefits of this is that you don’t have to endure the hassle of finding new tenants every year. Another is that you don’t have to worry about times of void (when your property is empty and you have no income to cover your mortgage payments). Another advantage of investing in commercial property is that you are leasing the property to businesses, which are generally considered more reliable than individual tenants.

The success of your commercial property investment will rely heavily on its location. Securing a purchase in a prime location is much more likely to generate a good yield than doing so in an area less popular with investors and tenants. Thinking about the area from both residential and business points of view is advisable, as companies are often interested in setting up their offices in towns and cities which are desirable to potential employees.

Once you’ve researched into the type of commercial property and its surrounding area, you will need to arrange the financial side of things. It may sound tedious but it’s in fact the most important aspect of any transaction of this sort. Ensure that your repayments are less than the rental income you will receive as if you want to borrow in order to invest up to the maximum amount otherwise you may find that the rental income only just covers your mortgage repayments. This means that even a small increase in interest rates could leave you in the red, if you’re not adequately covered.

Cover your back by ensuring that the lease provides for upward-only rental reviews, say every 5 years. You also need to ensure that your tenant signs a full lease for repairs and insurance deeming them responsible for the cost of any damages. You can also insist on a ‘privity of contract’ lease, which will ensure that your original tenant is responsible for paying the rent should they decide to sub-let the space.

Specialist Advice on Hotel & Hotel Room Investment

If you relish the thought of hotel investment, you might find that buying an entire hotel is well out of your price range. The thought then, that you could own your very own, fully managed hotel room or suite, for which you own the freehold, could be a highly appealing one, particularly if it is located in a place where you dream of owning a holiday home.

Hotel investments using the leaseback system largely began in the USA and France, and have become hugely popular phenomena in many areas worldwide.

The concept is simple:

• Buy the freehold outright
• Lease the freehold back to a management company for renewable periods of up to 10 years.
• Receive guaranteed rental returns from the management company, irrespective of occupancy levels. This rental often offsets the cost of your mortgage, giving entire peace of mind.
• Benefit from holidaying in your property yourself, in a luxury location you might otherwise only dream of.
• At the end of the lease period, either choose to live in the property or sign a new leaseback contract with the management company.

Hotel investment companies can supply you with details of freehold hotel room investments that allow you to buy the freehold of a holiday home in a fantastic tourist location with free pools, gyms and other recreational facilities to use as your own. Because of this, your property is already well located and has all the amenities that renters require, rendering it a valuable, high demand property that will sell or rent easily.

Another advantage of hotel room investment is peace of mind: regular, guaranteed rental income means that you are not held victim to local fluctuations in the property market and tourist industry. In addition, the day-to-day management and maintenance of your hotel room is left to the management company who you have leased it to. In reality, your hotel room investment practically runs itself, allowing you to adopt a hands-off approach, while reaping in the returns at the exit of your investment. And if, one room is not enough, then hotel investment funds allow you to own more than one hotel property, as part of a diverse, fully managed, international property investment portfolio.

How To Spot Better Property Investment Opportunities

The answer to the question of how to spot better property investment opportunities is to look for undersupplied demand first before looking for deals. Too many investors do it in the reverse, find the deal and then look for the demand; if you look for something then subconscious factors can sometimes make you find it.

For example, say you have heard great things about the Orlando property market, and the abundance of fantastic property opportunities there. You find a fantastic property investment opportunity, it's a resort development, and the write-up really sells it to you. It's tenanted, near the resorts, near a pack of malls, shops and amenities, and it all just sounds so wonderful, but of course you have always loved Orlando since you holidayed there as a child.

Because you have become so in love with the property there is every chance that your research could be skewed by your emotions, that you could overstate the potential of the opportunity.

Finding the demand before the deals greatly reduces the possibility of being driven by your emotions, and makes finding good opportunities to invest in property easier in other ways as well.

When you speak to companies seeking property investment advice and opportunities, if you do so having seen one of their properties, or a property in general this will give them an onus to talk up the potential because there is the chance of a sale there. But when you are looking coldly at an area to try and find an undersupplied demand you can simply talk about cold hard facts and figures.

Here are the facts and figures we need to be concerned with in the search for our next great investment.

Population Growth

This can be natural growth of babies being born, as well as migration of population caused by people coming into an area to find better employment opportunities.

Employment

When finding out about population migration, you will automatically find yourself cross-referencing with employment data, because you will be asking if people are likely to be moving into this area to find work. It doesn't matter whether you learn of migration whilst researching employment, or learn about great employment opportunities while researching population growth and migration, as long as you find out as much as you can about both.

Rental Occupancy and New Supply

This combination of factors is probably the biggest indicator when searching for undersupplied demand. An area with high and/or rapidly rising rental occupancy, coupled with sluggish new supply, indicates an area of undersupplied demand, and where we should start seeking out deals.

Needless to say this can be a good starting point in seeking out investment opportunities: searching for areas with high occupancy growth and limited new supply, and then digging down into researching employment and population growth when we find them. So there.

Identifying Property Investment Opportunities

Property investment opportunities may be plentiful, presenting themselves at any time. But how should an investor know whether or not it is a genuine opportunity rather than just an impressive marketing strategy? Being shrewd is the key to it.

Given the world's recent and very severe credit tightening and a dramatic decrease in property prices, it's not surprising that many investors are implementing ways to turn the crisis into profit. This means using a "bargain" to sell a potential property investment opportunity is not out of the ordinary these days.

Finding a bargain is still easy to do, especially in less sought-after areas, as well as the lower and mid-range price brackets. However, identifying genuine opportunities to invest in property with good deals can prove extremely difficult. In order to find the very best, investors need to carry out detailed research on an on-going basis, until the right one presents itself. Familiarise yourself with potential investment areas and make new contacts who know them well.

And don't be fooled. Property opportunities boasting massive price reductions are not always what they seem. Thinking ahead will get you the best investments. For example, choosing a property that has 40% deducted from its asking price may appear to be an excellent deal, however, by opting for a property with just 10% deducted from its asking price, you could make an even bigger profit when the market begins to strengthen.

Waiting for prices to plummet further, despite the current state of the market, does not always achieve the desired result. There is huge variance above and below average asking prices and within this there are some opportunities that won't be repeated even if prices do decrease further.

When you know you have found a genuine bargain, take advantage of it. Act quickly and decisively as, if the market is slow but other potential buyers are looking for the best bargains, they will purchase properties that appear to be a 'good deal' too and you could therefore be losing out.

Look for investment opportunities which look likely to appreciate when the market picks up and you will achieve a sound investment. As with any investment asset, prices of property depend on the supply and demand of their market. If you're thinking of buying into the residential market, be sure to hold up its most attractive prices against the potential for business, job and income growth of that particular area.

Whether you're thinking of buying property as a primary, second home or purely as an investment, make sure you are in the know when it comes to the local community's average income, potential growth and population. These three factors are crucial when looking for property investment advice and opportunities.

5 Successful Property Investment Strategies

When it comes to investing, using a property investment strategy is essential to success. However, strategies depend on the investor’s objectives and can vary greatly. Here are our top five tried and tested strategies:

Exit – the most important part of the strategy

When investing, the first thing you should do is devise an exit strategy – a well thought-out plan, clearly focusing on how and when you’re going to sell your investment and make a profit and whether or not you are going to buy another. It’s crucial that you decide before you make your initial offer and seek professional advice on property investment. Be aware of the economy, interest rates and job situation in the area. They can all affect the total profit once you sell up. It’s also worth considering what you’ll do if property values begin to fall or if it takes a long time to find a buyer.

Buy-to-hold

This strategy is widely recommended when seeking property investment advice. It is the process of buying a property with the aim of renting it out to make capital gains as well as income returns. Typically, an investor will hold on to the property for a period of 2 to 5 years before selling. In the meantime, it can be rented as a holiday let or long-term rental in order to generate income. However, if you choose to use this strategy, a good property investment guide is to be clear about whether immediate income generation or capital appreciation is your main objective.

Flip

This short-term strategy enables fast cash and can be used to buy a property then quickly sell it on before the title is transferred into your name. The average duration for this type of investment property strategy is usually between 18 and 24 months and involves the purchase of an off-plan unit (property that either hasn’t yet been built or is about to) and can lead to excellent capital appreciation. Emerging markets where prices remain low are typically the most successful.

Renovations

Another strategy for investing in property is to buy an inexpensive house and make major improvements to boost its price and leave you with a decent profit when it comes to selling up in the future. This is a popular option for first-time buyers who don’t have enough funds to wait for returns on the investment.

Wraps

This investment property strategy entails buying a property at below market value, then selling it at market price using vendor financing but keeping the existing mortgage. This allows the investor to receive small regular payments as opposed to one lump sum settlement payout. This can be particularly beneficial to investors with little or no deposit funds/have difficulty qualifying for conventional finance. The investor makes a margin on the sale price and interest rate.

大馬房產路在何方

2011-11-06 18:45

• 

與區域市場相比，大馬的產業價格相對廉宜，但外資卻缺乏購興，問題症結究竟出在哪兒？是己不如人，還是宣傳不力？

而隨最近產業市場走跌，再加上受外圍動盪格局影響，接下來產業走勢又會如何發展呢？是起抑或是跌？吸引力猶在嗎？應該選擇何時買進？

本期《產業焦點》邀來行家－－大馬產業機構（MPI）首席執行員古瑪塔馬林甘分享看法，細看國內產業市場的下一道分水岭，解開我們心中的疑團。

缺少宣傳
外資參與度不高

“我們處於東南亞的策略性位置，為何無法獲得外資的青睞呢？”

古瑪塔馬林甘指出，全球經濟充滿波動，特別是歐美面對債務及經濟衰退危機，令市場焦點轉向亞洲市場，而自2008年全球金融風暴發生後，亞洲市場如香港、中國及新加坡更成為投資者的目光。

“不過，如今投資者卻擔心這些市場爆發產業泡沫，加上中國潛在經濟放緩，因而轉向其他亞洲市場，包括大馬。”

他強調，大馬產業市場擁有龐大潛能，歸功於擁有足夠的透明度及基建設施，且發展商信譽品牌及營運記錄良好，但目前外資的參與度僅佔住宅市場的2%。

“在外資的眼中，大馬仍是滲透率較低的市場，落後於區域的香港、新加坡及印尼等，但我們期望未來可提高至5%。”

當務之急
樹立大馬特徵

古瑪塔馬林甘點出，外資參與度不高，主要在於沒有獲得良好的宣傳，外資對大馬的認知一知半解，為此當務之急是為大馬樹立一定的“特徵”，讓外界重新認識大馬。

“問題不在於外界的評價是正面或負面，而是完全沒有概念。如果你說你的蘋果品牌是來自澳洲，那你首選須促銷澳洲，之後才是蘋果品牌本身，因為國家品牌可以給人一種安全感。”

他補充，對於產業市場，情況也是一樣的，當外界對大馬有深入瞭解後，就對大馬產業感到眼前一亮。

“為此，大馬產業機構扮演著重要角色，到海外推廣大馬及國內的產業，不過必須沿用對的策略，不能說隨便放一些布城或依斯干達特區的照片，因為這根本無法表現大馬的身份所在。”

他透露，該機構計劃今年帶領國內著名發展商及一些機構到香港參與產業展，在那兒建立‘大馬館’，並將國內的發展商帶到當地，推廣大馬產業的魅力。

“我們花了不少錢在海外宣傳大馬的產業，但我們認為是值得的，我們需要與區域市場較勁，包括台灣、新加坡、日本及香港等。”

金融服務表現遜色

同時，古瑪塔馬林甘提到，大馬金融服務領域表現遜色，落後於新加坡及香港，失去本身的競爭優勢，也導致無法吸引金融業者前來大馬建立大本營。

“雖然資訊科技企業大量流進大馬，但僅屬次等水平，因為一流的企業選擇流進新加坡等市場，導致租金停留在現有水平，產業增值不大，這也是為何市中心的產業無法突破重圍的原因。”

“市場的一些產業本可跳升至每平方呎1千500令吉，不過卻一直無法顯著增值，仍停留在1千100至1千200令吉。”

捷運計劃開跑料吸資

他認為大馬政治局勢穩定，加上沒有受到天災如地震及海嘯影響，國內產業理應取得更高增值。若政府真的可以在明年執行經濟轉型方案中的各項工程，且捷運計劃準時開跑，相信可為大馬引進更多投資活動。

“吸引外國專才前來，營造更蓬勃的投資市場，且外國專才流入也將提昇國內辦公產業的出租率。”

他說，與其鼓勵外資置業，其實倒不如吸引外資流進，讓他們參與國內的建築活動，避免與國人爭相購買中檔產業。

“我們不會銷售100萬令吉以下產業，也不會鼓勵發展商在海外宣傳便宜的產業，而影響國內產業市場。”

周期縮減
明年房價料放緩

古瑪塔馬林甘表示，與過去相比，如今產業周期越來越短暫，過去是5年好，兩年壞；如今卻是兩年好，兩年壞。而經過過去兩年的蓬勃期後，加上受到經濟轉弱影響預，計明年產業市場將放緩，暫時“喘一口氣”。

“除了大馬，區域國家的產業市場也同樣趨軟，以中國的二線城市而言，以往新產業推介可迅速達到超過90%認購率，不過如今卻僅將近50%，可見產業市場已顯著回軟。”

不過，他深信本地發展商可應對各種低潮期，譬如在經濟造好的兩年內，發展商建造後銷售出去，並在市道轉差的另兩年則積極轉交房子給買家，準備下一輪的推介計劃。

古瑪塔馬林甘認為，無論任何時候，產業市場必定呈供過於求的現象，但必須強調的是，大城市的產業供應肯定會低於需求，如巴生河流域、檳城及新山，歸功於來自全國各地的年輕人口不斷遷入大城市，以追求更好的工作機會及生活素質。

“基本上，一個國家的首府及週邊地區應該要佔全國人口的30%，若依此計，巴生河流域的人口應達近900萬人，但目前僅有560萬人。”

他說，聰明的發展商會持續收購策略性地庫，以應付大都會的龐大需求，而發展商並不一定要在市區尋求地庫，其實任何一個據點都有其價值。以巴生河流域而言，人口分佈相當多元化，只要有一定的人口，就會在該地區建造商場。

“所以往往可以看到，城外的商場的生意甚至比市中心的商場更為出色。”

他指出，人口年輕化也對產業市場帶來激勵作用，惟發展商最重要的是為市場帶來正確的“產品”，因為現代人的居住形態已有所不同。

“剛出社會的新鮮人會先挑選較小的單位，當擁有更好的經濟條件後，以‘小屋換大屋’的方式購買另一項產業，從公寓再到有地產業。”

人生有3次換屋機會

古瑪塔馬林甘說：“我時常對年輕人說，先買你可以承擔的產業，當你擁有更大的資本後，再考慮換房子。我也認為一生人當中，應該擁有3次換房的機會，當中每隔15年。而在年邁時，兒女已長大了，則可考慮由大房換成為小房。”

他不諱言，在下滑週期購買產業或可省下5至10%資本，但卻未必能買到“稱心如意”的房子。

“房價肯定會在你購買後的5年下跌，不會在你購買的時候顯得便宜，但置業應該以長遠目標為出發點。”

他提醒，產業升值主要是因為地庫價值，而建築物本身的價值其實是會隨著時間流逝而走跌。在大馬，地段僅佔產業價值的15%，最多也不超過20%，不過在新加坡，卻高達70%，所以當地政府力阻地庫價值滑落。

“除了新加坡，香港政府也非常關注土地價值，確保每年增值5%至10%。”

成本高企
屋價難大落

古瑪塔馬林甘不認為產業價格會大幅下滑，主要是因為建築成本“有起無落”，原料價格持續處於上漲趨勢，唯一“有起有落”的是地庫價值，取決於一個國家的局勢及經濟是否穩定。

“現代人的品味已有所改變，因此建築成本也相應提高。”

針對高檔產業的走勢，他說：“很難說高檔產業的前景如何，不過可以看到的是產業計劃仍進行中，同時包括城鎮計劃及休閒領域走勢蓬勃。”

不過，他指出，之前發展商爭相湧往高檔市場，如今卻重返中檔市場，歸功於政府提供這方面的獎掖。

商業產業方面，古瑪塔馬林甘相信未來市場會更著重在擁有多媒體（MSC）及綠色指數建築（GBI）指標的產業，否則很難一較高下。

“若兩項產業的價格相同，一項擁有綠色建築地位，一項卻沒有，那當然是前者比較吃香。”

在現有政策下，一旦獲鑑定享有“綠色”地位，建築業者可豁免20%稅務，而且目前在進行承建工程的50多項大廈，也獲鑑定擁有“綠色”地位。

產業投機不嚴重

“本地產業市場的投機活動並不顯著，為何大家老是指投機活動破壞市場呢？”

古瑪塔馬林甘表示，在國內產業市場，投資者必須秉持長期性投資策略，即要經過一個週期才能取得產業增值，大約是5至7年，“我時常告訴外資，如果你要投機，請到香港或新加坡，大馬並不那麼容易投機。”

他認為政府將首兩年脫售產業的產業盈利稅（RPGT）從5%倍增至10%，是因為擔心產業市場過熱，甚至產業泡沫，不過他相信此措施對市場的影響不大，投資者為了逃過較高的RPGT，而選擇在兩年後才脫售產業。

“對於富裕人士而言，若產業轉手可捎來更高的回酬，他們也不介意支付這筆稅務。”

他補充，發展商也未必能在兩年內將所有單位在兩年內脫售出去，這裡並不像印度或中國，通常僅銷售50%，甚至高達70%，而另30%則是屬於土著保留單位。

“所以，大馬的發展商擁有更長的週期，一般上發展商的銷售只有40%，一旦達到60%，他們已可以開始展開承建計劃。”

“我知道最近一些發展商進行產業推介活動時，只賣出10%至20%單位，發展商寧願退錢給買主，擱置推介計劃及調整產業設計，直到市況轉佳。”

發展商適應力強

古瑪塔馬林甘強調，現今的發展商擁有超強適應力，改變策略，購買較小塊地庫，少過100英畝，但很少發展商會購買3至5千公頃，避免展開城鎮計劃，因為當中涉及龐大成本，且耗費很長時間才能攫取回酬。

“不要忘記，大馬的人口不多，只有2千800萬人，當中的1千700萬人已居住在屬於本身的家，另600至700萬人是在鄉村地區，僅剩下400萬至500萬年輕人口，可見市場不大。”

他說，大馬人口少，基建設備龐大，以技術面而言，其實是可以容納5千萬人口，而南部的依斯干達經濟特區佔地2萬7千英畝，但只有2萬7千人，所以面對的挑戰是如何把人口帶進該特區。

“可喜的是，目前UEM集團正積極承建及發展大型商場及樂高城（Lego Land）等，吸引人口遷入當地，雖然最終人口會提昇，但將耗上一段時間，因為現有人口不大，加上人民的生育率不高。

預算案助推動高檔產業

古瑪塔馬林甘對政府在2012年財政預算案中的多項宣佈表示讚揚，包括吉隆坡金融特區計劃有望吸引更多外資流入國內，協助推動高檔產業的發展。政府建議讓在金融特區的建築商享有70%稅務豁免。

“這是非常重要的一步，而且這也是10年前迪拜所採取得策略及營運模式，不過後來因過度發展，連沙漠地帶也開發，而陷入危機。”

他補充，這是開啟金融特區重要的步伐，為進駐大馬的企業提供稅務優惠。

同時，他也對政府為一個大馬發展機構（1MDB）提供稅務獎掖，吸引外資流入，而表示欣慰。

對於政府在預算案中宣佈將“我的第一間房屋計劃”的房價頂限從22萬令吉提高至40萬令吉的措施，古瑪塔馬林甘相信這可惠及更多低收入市民，特別是在城市地區。

“不過，為了防止不必要的投機行為，政府應該列明屋主不能在10年內轉售房子，否則須支付當中的100%賺利。”

總結：儘管大馬產業市場已稍微“退燒”，不過近期歐債危機略見曙光，整體局勢開始回穩，將有助於支撐產業價格。

國內房價雖較區域市場來得低，但未能與國人的收入成正比，因此政府也須祭出更多有效措施，以達到居者有其屋的目標。（星洲日報／投資致富‧產業焦點）

Borrow Intelligently as Much as You can

During a recent seminar, I challenged all the participants that each one of them must have a goal of having at least RM5 million in bank borrowings for property investments, provided the returns are higher than the borrowing costs. Many participants almost fell off their seats, as it was a little difficult for many of them to comprehend such a figure. Most of them never had any sort of goal as to how much money they should aim to borrow.

Let me explain why you should be an intelligent borrower and aim to borrow as much as you can:

1. You can Leverage and get Rich using the bank’s money and less of your own. The key advantage properties have over other investments such as mutual funds is that you can easily borrow up to 90 per cent of your purchase price. With only RM10,000, you can purchase a property worth RM100,000.

If prices were to increase by 10 per cent, your property is now worth RM110,000. Against your original cash outlay of RM10,000, this is a 100 per cent gross rate of return! Instead, if you had invested RM10,000 in a mutual fund and if prices were to go up by 10 per cent, you would have only made RM1,000.

Do bear in mind that Leverage is a Double Edged Sword. If prices were to drop by 10 per cent, your loss on the property would be 100 per cent. Compare this against a loss of only 10 per cent in mutual funds. Hence, you really need to be an intelligent investor as well as careful borrower.

2. Even if you have RM100,000 cash and can afford to purchase the property without any loans, it’s still advisable to borrow money. Reasons being:

a) All important documents such as the title, etc are kept by the bank. If you were to keep the documents on your own and were to lose or misplace them for any reason, it will be a cumbersome process to get a duplicate copy. In case you need to sell, the certified duplicate copies may not be recognised by your buyer’s bank.

Some years ago, a student at my seminar had purchased a shop lot in Sungai Wang and he was sharing with us the problem he faced. Since the individual titles have still not been issued after more than 25 years, owners are required to keep original copies of all Sales and Purchase agreements (SPA) from the developer all the way to the present owner.

It so happened that for the shop he purchased, there were at least seven changes of ownership in the last 25 years and one of the original SPA was lost. Even with a certified true copy of the missing SPA, the buyer’s bank refused to release the loan as the documentation was considered to be incomplete. My student was very lucky to get all his deposits back in this case.

b) When you borrow 90 per cent of the purchase price, you are transferring 90 per cent of the risks to the bank. Many savvy rich overseas investors who invest in Malaysian properties prefer to take bank loans from the local banks even if they don’t need to borrow. The reason they do so is that in a worst case scenario (e.g. developer going bust, country in political turmoil, etc), their loss is only limited to the down-payment of 10 to 20 per cent instead of 100 per cent if they had not taken any bank loans.

3. Suppose you are paying RM1,000 every month for your fixed term loan for the next 25 years. Due to inflation, the purchasing of RM1,000 per month today and RM1,000 per month in the future will be vastly different. If RM1,000 today can purchase 1,000 lollipops, 25 years later the same RM1,000 can probably purchase 300 lollipops less.

4. Since Your Net Worth = Assets – Liabilities, with properties, you get to enjoy double benefits. Your asset value increases over time thanks to inflation, while your loans are gradually being reduced by your hard-working “employees” or tenants. With other asset types, you only get to enjoy the appreciation aspect only. Even then, part of the return is constantly being eroded by inflation. Inflation works for you in property investments whereas it works against you for other investment vehicles.

5. Let’s assume you have total borrowings of RM1,000,000 spread over the next 25 years at seven per cent per annum. Your yearly instalment RM85,811* (monthly = RM7,150/month) is being covered by the rental income. See the table below for more details

*Note: Formula in Microsoft Excel is “=-PMT(0.07,25,1000000)”

Malaysia - Buy-to-let Investment

Malaysia boasts a healthy, growing economy, allowing for excellent buy-to-let opportunities. Below is a guide to the factors to be taken into account when considering investing in your property to let in Malaysia.

The term "Buy-to-Let" simply means the purchase and ownership of a property through normal purchase procedures and when completed, the owner seeks to rent this property out for a regular income, often exceeding annual mortgage repayments.

The "Buy-to-Let" Market in Malaysia

A huge increase in tourist numbers to Malaysia has brought about the need for more holiday accommodation in the luxury tourist resorts that have sprung up in many coastal regions. In addition, city investment in Kuala Lumpur has seen much growth over recent years, while large international businesses, particularly from Japan, China and the US, are realizing the financial benefits from establishing their premises here. This has created a surge in the requirement for top class real estate rentals to offer an affluent expatriate market.

Rental yields in Kuala Lumpur stand at a respectable 7.4 to 8.7%, while corresponding figures remain just a little lower in the tourist resorts. Holiday rentals are also big business in Malaysia, particularly in areas in and around Port Dickson, as are commercial premises within the city.

Purchasing a property to let in Malaysia involves careful consideration as to whether or not the property is ideal for your intended market. Careful analysis will need to be done on matters such as local or tourist amenities and accessibility to airports and road infrastructures. Early investment and a carefully planned formula to suit your market will bring you excellent returns on your buy-to-let property in Malaysia.

Buy to Let (Example Only)

Case Study

John decides to purchase an investment property and after joining the IPIN and discussing his requirements with our investment experts, he decides that the "Buy-to-Let" investment strategy is for him.

John has savings of around USD80,000.

Our investment advisors suggest property development X which has been vetted by the IPIN (International Property Investment Network) as a solid investment opportunity and meets with John's deliverable criteria.

Investment property X is a new development with beautiful sea views and priced at USD250,000.

Initially John pays his reservation fee of USD3000 to hold the property.

Next John pays a 30% deposit of USD75,000 (minus his USD3000 reservation fee already paid)

Our investment specialists negotiate a mortgage for John for the remaining USD175,000 at a rate of 2.75% (example only) this translates to a monthly mortgage repayment of USD481.00 (interest only) which is equal to USD5772.00 over 12 months.

John starts to rent his new property immediately and during the 3 months "High Season" he receives USD2000 per month in rental income. These rental payments exceed his annual mortgage repayments and still leaves John with 9 months of rental potential to make a further profit.

If we assume that average rental rates for Johns new property are as follows (conservative figures):

1. High Season - USD2,000 Per Month
2. Low Season - USD1,300 per Month

Now we assume that John decides to go on a short term rental strategy maximizing his income over the High Period. He easily rents his property for 3 months during the high period earning USD2000 per month. After this period he has a delay in getting his next tenants but over the course of the year he rents his property for a further 6 Months only.

1. 3 Months x USD2,000
2. 6 Months x USD1,300

Total Rental income = USD13,800 after subtracting the USD5,772 mortgage repayments John has made a profit of USD8,028.

* During this example we have not included any rental management or community fees that may apply but also we have only assumed rental income for 9 months of the year and with many holiday makers now booking private accommodation via the Internet this is very achievable.

Short-Term letting v Long-Term Letting

The final decision to be made by the "Buy-to-Let" investor is which letting strategy to use. It is obvious that the highest income is made by the property owner by short term letting during the high season. However you must bear in mind increased overheads due to constantly finding short term rental clients, as well as maintenance costs between clients.

Long-term rentals typically pay less per month but usually require far less input from the property owner. Some property owners choose to rent long-term during the low season, then short-term to higher paying tourists during the high season. The decisions to be made regarding your letting strategy are usually answered in part by the type of property you purchase.

The “Buy-to-Let" strategy is an important formula to get correct as even in a very busy market there is still competition. In order to maximize occupancy rates it is vital that you correctly select your location, property, unit and monthly rental charge as these factors will directly effect occupancy and, in turn, your rental income.

This type of investment brings the added benefit that during the time your property is being rented out and earning you an income, it is still appreciating in value at one of the fastest rates available, while someone else is paying your mortgage. Meanwhile it is providing an off-peak holiday home for your personal enjoyment.

Buy-to-Let investments are catching on fast in Malaysia and investors now consider them to be a very sound investment decision.

Investment Strategies For Malaysia

Malaysia’s immense attraction as a tourist destination has encouraged large developers to create new resorts in many stunning locations. These, along with some city investments, are offering buyers the opportunity to employ potentially lucrative short, medium and long term investment strategies. Find out below some of the factors that make Malaysia such a promising real estate investment arena.

General Factors

Malaysia’s real estate market has been taking on new dimensions as a result of a major government initiative, the Ninth Plan, which calls for impressive new provisions for the country’s infrastructure. This, along with a growing economy and increased foreign investment, reinforces our analysts’ firm belief in the future success of Malaysia’s property market.

The government positively encourages foreign investment and has relaxed tax and home ownership rules for overseas purchasers. It also allows 100% freehold title within a relatively uncomplicated property purchase procedure.

Magnificent coastal and inland scenery, water sports, golf and many opportunities for sightseeing all make Malaysia a sought after holiday destination. These assets blend well with a vibrant culture and charming, English speaking people while a low cost of living and increased availability of budget flights to Malaysia further encourage a steady flow of homebuyers and tourists.

The amazing growth in Malaysia’s tourist industry is sustaining the real estate sector and has encouraged large developers to create new resorts in key locations. These offer plenty of potentially lucrative off-plan and buy-to-let investment options which are appealing to affluent expatriates from Asian, US and, increasingly, European markets. Chinese investors are particularly active in Malaysia and this trend is expected to grow.

Property purchasers in Malaysia are currently finding lucrative opportunities in coastal areas such as Ferringhi on Penang or Sabah which are proving to be highly popular amongst the most discerning of property buyers. City investment, particularly in the capital, Kuala Lumpur, is booming due to a wave of direct foreign investment from China, the US and the Middle East.

Economic Factors

Malaysia has one of the fastest growing economies in its region and a surge in economic activity (predicted increase in worker numbers to 27.9% by 2013 over a 10 year period) has brought with it a high demand for quality real estate. Successful buy-to-let investments are serving a growing expatriate community employed in and around the city.

Malaysia ranks among the top three Commonwealth countries for the greatest number of tourist arrivals, according to the World Tourism Organisation. Malaysia attracted 20.88 million foreign visitors in 2007, representing a 19% rise on the previous year and setting a new record of 14 billion dollars in revenue - an astonishing achievement for and all good news for today’s investors in tourist resorts seeking strong buy-to-let investment potential.

Real estate in Malaysia is high quality and very low cost, compared with many other locations. Due rate of exchange with the local currency, the ringgit (MYR), property is valued below the euro, dollar and pound sterling. Foreign investors buying into Malaysia are therefore finding their money goes a very long way, all the more so as property per square metre is selling at a fraction of the cost of similar properties in worldwide locations. The relatively low cost of living (eg. petrol is 40p per litre in 2008) is a firm attraction and low buying costs of between 1 and 2.5% of the property value are additional advantages for property investors in Malaysia.

Political Factors

Malaysia has an elected constitutional monarchy and a system of parliamentary democracy with an excellent record. It comprises 13 states as well as two local territories, the capital of Kuala Lumpur and Labuan, each with its own head of state and an elected assembly.

The Malaysian Parliament comprises the Senate (Dewan Negara) and the House of Representatives (Dewan Rakyat). The Senators serve a six-year term, while members of the House of Representatives are elected for a five-year term. Since gaining its independence from Britain on 31 August 1957, Malaysia has held elections every five years or less. The tenth general election was held on 29 November 1999.

Malaysia has experienced little political violence since ethnic rioting in 1969. In late April 2003, Malaysia's Official Human Rights Commission - Suhakam - called for the Internal Security Act to be replaced with laws modeled on Western anti-terrorism legislation.

Today, Malaysia is a prominent member of the Association of Southeast Asian Nations (ASEAN) and is a politically stable country. This makes it an attractive location for foreign investors and benefits the country’s economic growth. Recent government policies have included a relief fund and tax breaks for the tourism sector, liberalisation of foreign investment regulations, and new funds to help traders.

In fact Malaysia is amongst Asia’s leaders in terms of attracting interest from foreign investors, most of whom are from the Middle East. They see it as a viable and attractive emerging market with high medium term growth potential, within an economy that recorded a GDP expansion in the third quarter of 2007 of 6.3%. Analysts believe the current political and economic situation will positively and directly affect the real estate market in Malaysia.

Natural Factors

Close proximity to Australia, Bali and Singapore attracts increasing numbers of tourists from these countries as well as significant amounts of direct foreign investment from China, Japan and the United States.

Malaysia is well served by budget UK flights with some prices starting at only £285. In addition, Malaysia is connected by low cost regional flights by Air Asia from major S.E. Asian cities, creating easy access for a growing influx of visitors.

English is widely spoken, making a property investment in Malaysia a transparent procedure while all property sale agreements are written clearly in English. In addition, English language newspapers, radio and television are available everywhere, making a move here almost like home from home.

A wonderful climate awaits holiday makers, re-settlers and investors alike. The country is generally warm throughout the year with temperatures ranging from 21° to 32°C in the lowlands that are ideal for the average holiday maker seeking a warm and sunny climate.

In addition to the climate, many visitors come to Malaysia to enjoy its exotic culture and a rich culinary experience including satay, noodles, nasi lemak, rendand and roti canal, all of which are spicy and full of aromatic flavour. A warm, friendly population, a peaceful society and a pro-British environment make for a highly attractive destination. Superb golf and other sports facilities add to Malaysia’s appeal and, while the country is renowned for its beautiful landscapes, it is fast emerging as South-East Asia's premier golfing destination with some 200 quality golf courses on offer. Many of these courses are designed to top international standards and are equipped with all modern amenities along with corresponding resort developments.

Malaysia is also a famous angling location and some of the country’s rivers and seas hold prime game fish, including marlin, sailfish, tuna, barracuda, amberjack and dorado. Inland, fishermen hunt for the prized red mahseer or ‘kelah’, a powerful freshwater fish to be found in clear water, fast-flowing rivers such as those in Endau-Rompin Park. World class diving exploring rich coral beds and beautiful aquatic life provide some memorable diving opportunities.

Logistical Factors

Malaysia is easy and cheap to reach with 25 flights arriving per week from the UK, starting at only £285. Malaysia is also well served by low cost regional flights on Air Asia to major S.E. Asian cities.

Most visitors arrive in Malaysia by air via the main gateway at Kuala Lumpur International Airport (KLIA) at Sepang in the state of Selangor. The rest of the country, including Sabah, Sarawak and the Federal Territory of Labuan in East Malaysia, is well served by 14 domestic airports and airstrips.

Air services in Malaysia are on the increase, in line with demand to accommodate a growing number of visitors. Kuala Lumpur-based Air Asia has committed to increasing its fleet by another fifty 180-seat Airbus A320 jets and has also launched a new long-haul, low-cost airline - Air Asia X. A revised cost structure has enabled the airline to charge fares as low as 39 ringgit from Kuala Lumpur to Penang compared to 40 ringgit for the bus trip. A car journey over the same distance will set you back double at 80 ringgit, including tolls and petrol.

Malaysia’s major airports are located at: the new Kuala Lumpur International Airport (KUL), Kuala Lumpur-Subang (SZB), Penang, Johor Bahru, Kota Kinabalu, Kuching and Langkawi.

Airlines operating services to Malaysia include KLM, Qatar Airways, Sri Lankan Airlines, Kuwait Airways, Emirates, Gulf Air, Cathay Pacific and Malaysia Airlines and these link many European destinations with Malaysia.

Remember that an International Airport Departure Tax is payable of MYR40 (€8.81).

The Malaysian Peninsular and East Malaysia are also easily accessed via sea ports. Located just outside the capital city of Kuala Lumpur (KL) on the west coast of the Peninsular, Port Klang is Malaysia’s largest modern sea port. It is also a major shipping and cargo terminal with excellent harbour facilities. Other major ports are located on the islands of Penang and Langkawi in the north of the Peninsular, at Johor to the south, at Kuantan on the East Coast and at Kota Kinabalu in Sabah.

FerryLink operates a car ferry service from Changi Point in Singapore to Tanjung Belungkor on the southern coastline of the Peninsular, which is the gateway to the popular beach resort of Desaru. There are four daily trips on weekdays and eight daily trips on weekends. For reservations, please call 02-545 3600 (Changi Point) or 07-252 7408 (Bandar Penawar, Johor).

Short Term Investment Strategy

Key Opportunity

As a fast growing tourist economy, Malaysia has much to offer investors looking to profit from short term off-plan investment opportunities. Growing tourist numbers, up 19% in 2008 from the previous year, and an ongoing influx of foreign investment into Malaysia bring buoyancy to the real estate market. Overseas buyers are further encouraged by a reliable and expanding property and tourist arena.

Low off-plan prices, strong returns on investment and high rental yields for owners of re-assigned contracts are all reasons behind the current success of Malaysia as a short term property investment location. An increasing number of visitors are buying into apartment complexes in the major holiday hotspots, safe in a strong belief in the Malaysian government’s commitment to further economic growth and stability.

Malaysia is well served by international airports with good transport links to and from resorts and cities. The never-ending expansion of budget priced airlines within the region provides low-cost, no-frills air transport to the international tourists.

Malaysia offers investors the type of all-purpose, self-contained holiday resort option so popular in the current overseas property and holiday marketplace. Easy to maintain, new properties on secure communities within easy reach of the beach and on-site resort facilities are firm favourites, enabling short-term investors to achieve their off-plan contract re-assignment within a relatively short period of time.

IPIN often has access to interesting pre-release prices, allowing its members to take full advantage of below market prices as well as high capital appreciation over the construction period.

Timescale

Investors in off-plan developments factor in between 18 and 24 months for construction from reservation to completion stages. Short term investors normally look to profit from a carefully selected, promising market, selling on their unit to mid or long term investors approximately 14 to18 months after making their initial reservation, regardless of whether or not the project is yet completed.

Of course, the earlier the investment is made, the greater the investment returns. As importantly by entering the project at the earliest possible stage, investors get the best choice of units which will always be first to attract buyers in the future.

Level of Complexity

Short term strategies offer the lowest level of complexity as the purchase has not yet been officially made; therefore, no property taxes or maintenance or management charges are due. This is a simple capital investment, often with no need to proceed to Purchase Contract, or make any mortgage finance arrangements. Remember to check with the developer if there are any charges made to “flip”, or reassign your contract, and at what stage you are permitted to do so, before you proceed

Risk Assessment

All investors must carefully assess the particular project and units in which they wish to invest. In many cases a wide range of other projects will be under construction and a choice will need to be made. A decision will need to be based on how a particular development or project will outshine its competitors in terms of appearance, location, on-site facilities and the unit itself. Investors will also need to consider issues such as the number of other units available within the particular development, predicted demand as well as competition for the type of property they wish to invest in.

To curb risk, a short-term investor should normally seek to buy the best possible unit, ie. a corner unit, a penthouse or ground floor unit with a private garden, which will always sell in preference to a standard first floor unit.

Investors need to be clear how their exit strategy is to run. How will the unit be marketed and by whom? How much will the selling agents charge in commission? Should a buyer not be found prior to completion of the property, investors must be confident they can cover payment to completion of the unit and adapt their strategy if necessary. IPIN offers a substantial Investor Care package, which adds significantly to investors’ chances of a successful exit.

Short term “flip” investments are undoubtedly more risky than longer term strategies, but, with careful research and planning in place, off-plan purchase in well located Malaysian resort projects offers a sound investment with lucrative returns.

Return

Estimated returns of up to 14-15% per annum are being achieved on well located off-plan projects. Shrewd investors have the opportunity to reach the highest figures possible by selecting prime resorts at pre-release pricing levels, allowing investment at below market value. An earlier than normal reservation of course affords the maximum possible returns on investment on any given project.

By reserving at pre-release stage, investors profit from discounted prices and, in many cases, these are subject to successful planning applications, allowing for additional pricing uplift. Reservations on this type of IPIN recommended project allow for full refunds if necessary and secure escrow accounts are in place to protect investors’ funds.

Financing

The short term investment strategy is purely based on capital outlay as mortgages cannot generally be raised against property that is not yet built. In order to cover all eventualities, investors MUST be confident they can complete the purchase if necessary, even if using a buy to flip strategy.

Payment terms will vary; good projects often offer terms of as little as 20% initial payment with stage payments of 40% to final completion. This system allows short term investors to operate their strategy with minimum capital outlay and it can be assumed that they will have exited the strategy, at the latest by the time the final payment is due.

If necessary, IPIN can help its investors arrange equity release from their existing property to fund the initial capital payments, which could later be covered by a mortgage once the construction period is completed.

Taxation

Purchasing a property contract and then re-selling prior to completion is a tax-efficient way to invest in property. IPIN always recommends research into any double taxation treaties in place between Malaysia and the investor’s country of residence.

Medium to Long Term Investment Strategy

Key Opportunity

A growing infrastructure under the provisions of Malaysia’s Ninth Plan is precipitating unprecedented growth in the real estate sector. A strong rate of economic development, including increased foreign investment, reinforces our analysts’ firm belief in the future success of Malaysia’s property market. The country is successfully attracting investors and tourists alike, all seeking an exotic Asian holiday destination where high standards, a rich culture and stunning natural beauty all combine to make a perfect holiday destination.

The Malaysian property market offers a strong mid range investment opportunity to international property purchasers seeking reasonably priced real estate with sustainable growth potential in both the residential and tourism sectors. Malaysia boasts two primary property markets that are particularly attractive to overseas buyers: the area around the capital's central business district and the resort properties in areas such as Ferringhi on Penang or Sabah.

An already robust tourism sector is now spawning a secondary holiday home market, further boosting the strength of the property market and opening up many new investment opportunities to property purchasers in Malaysia.

Timescale

Average construction time on International Property Investment Network (IPIN) recommended Malaysian projects, from project sales release to completion of construction, is approximately one year. Mid to long term investors look to hold onto their units after construction, normally for at least 18 months from initial reservation, either to rent it out and/or benefit from capital appreciation upon eventual resale. Many long term investors wish to generate significant and reliable rental income over a period of time as sustained rental returns are their main focus, followed by eventual gains through high steady capital appreciation.

Growth is expected to continue to be strong over the next 5 years, notably in the area around the capital's central business district and the resort properties in areas such as Ferringhi on Penang or Sabah. The longer investors are able to leave capital in their purchase, the higher their potential returns will be. With tourist levels high and on the increase, the buy-to-let market allows investors to reap in solid capital growth from their properties.

IPIN strongly recommends consulting with an IPIN advisor to discuss your particular mid to long-term investment strategy in Malaysia, to ensure your chosen option best suits your needs.

Level of Complexity

In the case of off-plan purchase, full payment for the property needs to be completed at various stages of construction, prior to final completion of the purchase. In some cases, developer’s finance can be arranged for up to 70% of the property value and most investors raise alternative finance or inject their own capital investment over the stage payment periods.

For mid to long term investors, all costs will be applicable amounting to around 1 - 2.5% of the purchase price, while ongoing costs such as maintenance, community fees and utility bills will also need to be factored into the strategy finance plan. Bear in mind it’s advisable to open a bank account in Malaysia in order to pay for the property’s utilities and other ongoing expenses.

Some good arrangements are often to be made with property management and rental companies that are often conveniently based on or near the site. These ensure that such ongoing costs are covered and that your unit is rented out regularly. Maintaining a property abroad can therefore become no more complex than an investment closer to home.

Key Risks

A medium to long term investment strategy entails much lower financial risk than a short term plan which relies on finding a buyer within a very short time frame. Provided the right investment is made on a quality, well located project with multiple facilities, establishing a rental market and eventually a buyer for your investment should not be difficult. However, as with any investment, patience and money is sometimes required until the end user is found.

Malaysia's popularity as a growing tourist destination bodes very well for buy-to-let investors. This of course translates to an increase in buyers and renters on the one hand, but brings with it intensified competition on the other.

Bank Guarantees are commonly given by developers in Malaysia and IPIN approved projects will always be protected by local or overseas bank guarantees.

By appointing independent legal representation, the client can be sure that all the necessary paperwork is in place before signing the purchase contract. IPIN ensures recommended legal services are always offered independently from project developers, therefore exclusively representing the client’s interest at all times.

Property ownership in Malaysia is sold freehold, leaving no room for ownership disputes.

Return

Mid to long term investors expect to see capital returns of around 7-15% per annum based on the fact that their properties are located in popular resorts or areas of high demand.

The best rental yields are possibly available in the commercial property sector or KLCC serviced apartments, with returns of 8% not being unusual. It is possible to invest in “tenanted” residential or commercial properties with guaranteed yields of 8%-10% available. We also suggest looking at off-plan commercial premises that will net yields well into double figures, while a number of hotels are available with gross yields in excess of 17%.

Many discerning investors not only choose property in prime locations, but also buy at pre-release pricing levels, allowing investment at well below market value. An earlier than normal purchase not only secures the best unit, but also maximises future returns.

Increased worldwide exposure of Malaysia’s holiday hotspots will also have a positive effect on the tourism market, bringing with it a further boom in the real estate arena and inevitable price increases.

Financing

Some off-plan developments in Malaysia offer finance options and installment plans. The charges applicable vary according to developer and repayments are usually indexed. Sometimes the developer can often offer the most competitive finance options to investors and these are certainly worth considering when looking at mortgage alternatives to those from their own countries.

As a foreigner, you are normally allowed to borrow up to 70% and in most cases Malaysian banks are more than willing to finance your purchase. Loans are granted on the proviso that the property value is RM 250,000 or more. There is no upper limit to the cost of properties that may be purchased by overseas purchasers of property in Malaysia. The current base lending rate is 6.8% per annum (end 2006). Loans are for a maximum period of 45 years or up to age 75, whichever is earlier

If necessary, IPIN can help its investors arrange equity release from their existing property to fund the initial capital payments, which could later be covered by a mortgage once the construction period is completed.

Taxation

Capital Gains Tax: In April 2007, capital gains tax was abolished in Malaysia.

Stamp Duty: Since the 2008 budget, Stamp Duty for the Land Title Transfer for properties costing less than RM250,000 was halved. This benefit is applicable for the purchase of one house for the entire financial year of 2008.

Price Stamp	Stamp Duty in 2007	Stamp Duty in 2008
RM250,000	RM4,500	RM2,250 (-50%)
RM150,000	RM2,000	RM1,000 (-50%)
RM350,000	RM6,000	RM6,000 (unchanged)

(Based on the current rate of 1% for first RM100,000 and 2% for RM100,001 to RM1,000,000)
This situation is prompting property developers to provide more properties at below the price of RM250,000 in order to entice buyers. However, new home buyers face two main stamp duties, for title transfer and the bank loan facility agreement.

Inheritance Tax: There is no inheritance tax charged in Malaysia.

Other Taxes:

There is no VAT in Malaysia, but a Government Sales Tax (GST) of 5% is charged on hotel and restaurant bills and on professional bills such as lawyers’ bills.

Non-residents are liable to pay tax, without reliefs, on money earned in Malaysia. Rates are 22.4% on monthly income of USD 1,500 and 25.1% on USD 6,00 per month.

Property tax, a local tax based on the annual rental value of your property, is payable in two installments annually. It is usually levied at approximately 6% for residential lettings.

Quit rent is a local tax levied on all landed properties and payable annually at a rate of 1 sen (US$0.003) to 2 sen (US$0.006) per square foot - RM1 = 100 sen (cents). The Quit Rent liability generally totals less than RM100 (USD31) per year.

Once a retiree has been out of the UK for the prescribed period, offshore investments become free of UK tax and are not taxed by the Malaysian tax authority. In fact, several people have calculated that their living expenses within Malaysia are far less then their tax savings, making it, in effect, almost cost free to live there.