Opportunity During Hari Raya

By now, almost all muslims in Malaysia are already in their own hometown celebrating Hari Raya. Muslims are celebrating the special day or victory day after fasting for a month. It is harder to control your desire than other things. It is not just the activity of eating or drinking but muslims must refrain themselves from doing bad things during Ramadhan month. One of the bad habits that many people fail to control is the ability to spend below your means. While fasting, one would desire to eat a lot of foods and drinks. Some people fail to control their desire and bought a lot of foods. Later after iftar, they realise they cannot eat as much as they desire during fasting.

As a property investor, controlling your desires are also challenging. To accumulate your capital and increase your ability to invest, it is important to exercise restraint from spending unnecessarily. Like buying lots of food during fasting, the unnecessary items are only clearly seen after the expenditure has been done. That is why we must always ask ourselves whether the items we want is really necessary. Are we going to die without them? Are our life will be worst without them? You should always remember your experience during Ramadhan month!

Controlling your desire is not just about affordability. Once your investment getting larger and getting higher return, it is getting more difficult to control your desires. At this level, money is not a problem to you. There are always excess money after deducting your obligation. But, we have to ask ourselves is this just the level of investment we want to achieve? We should safe as much as possible so that we can go to the next level. Besides, if you really satisfy with your levelof investment, it is better to donate your excess money to those who really need them! May be it is time you should start to invest to donate the profits to the needy people.

By the way, celebrating Hari Raya does not mean I stop thinking for my next investment. This is the time observe new opportunities. You should applied what you have learn in property investment principles to find new opportunities in your hometown. We never know what opportunities await for us until we do the window shopping!

SELAMAT HARI RAYA,

MAAF ZAHIR BATIN.

GST 101 for Property Investment

Next year, the Goods and Services Tax will be enforced beginning from 1st April 2014. Does GST good for your property investment? Or does the current tax is better?

Not all goods are being taxed. For property, residential property is not being taxed. While commercial property is being taxed. The only unclear property is the savvy term being used by the developer such as SOHO, SOFO, etc. Most of them are being used for residential but the properties are on commercial land. There is still no clear guideline from the Custom. I believe they are also in a headache right now how to define these type of properties.

I read a lot of people cursing, blaming, mocking and many bad writing about government implementation of GST in their facebook comments. I can say all of these people never attend or read the full document about the GST. Yet, they simply barking around like headless chicken. As I always teach my property seminar participants, knowledge is power. If we use it wisely, it can lead to wealth accumulation. But, these people never even bother to learn properly. So, I hope my readers are not one of them. You should attend GST seminar if offered by any party especially the property developer or tax accountant.

Since Malaysian think they are soo smart, I put a simple survey on my facebook (https://www.facebook.com/zulfakar.aspar) what is their opinion on this matter. I am still waiting for the outcome...if only they really have the balls to take the poll.

My question was very simple: based on my simple explanation above, which investment is better for you, the residential or commercial property?

What do you think? and why?

Failure to learn about GST, you may be lost in a labyrinth of stupidity which is equivalent to stupid comments and conclusion of the MH17 tragedy.

MH17 Tragedy can be a Property Investment Tragedy

I was having a mid night snack  on 17 July 2014 while discussing some small business issues with my friends when I saw the shocking news. At first, I taught the news was about MH370 was finally found being shot down in Ukraine which is ridiculous. Then, I realize the news was about another flight which is also from MAS airline. This is another huge tragedy for Malaysia after the missing of MH370.

As I expected, there will be many idiotic comments especially from politicians, bloggers and news blogs. Their attitude is in parallel in property investment - full of idiotic comments whereas they don't have the specific knowledge of the industry. Consequently, they blame the government or her associates as in property industry. That is why in property investment, I train my participants to learn and appreciate as much knowledge as possible. If you are knowledgeable, nobody can lead you to astray. With knowledge, anything is possible except rising up people who already dead. It is also possible to travel to other worlds with sufficient knowledge (as promised by Al Quran).

People without knowledge will always blame on others when bad things happened to them. People without the skills for the specific industry will easily blame on the people they hate. I was not surprised when USA government quickly blamed the Russia government for what happened to MH17. CNN quickly blamed on the Russian and Eastern Ukraine separatist. People without critical thinking will quickly accept these as facts. In property investment, the same scenario may and always happened when investors do not have sufficient knowledge and skills.

Let us look at the bigger picture, who will get the benefits from this tragedy.

1. USA blames Russia did it.
2. Ukraine government blames on the Russian separatist.
3. USA and Ukraine ask the world to unite together to go against Russia.

So, if I am Putin, I am not stupid enough to shoot MH17!

In property investment, for each government action people quickly give an equal but opposite reaction. Every time the investment cost increases people will blame on the government. Whereas government can only facilitate, it is up to the people to take advantage of the situation.

This is what I extracted from www.WhatReallyHappened.com. I have been a follower for this website since 2000. Almost all of their news and analysis are correct including the tragedy of MH370.

Malaysia have seen her worst property tragedy in 1998. Due to money speculators, many Malaysian were trapped in huge property debts. Some of them were auctioned without recovering the investment cost. Some of them were still declared as bankrupt until today! A few of them kill themselves. Government of Malaysia would not let 1998 property tragedy to happen again.

MH17 Tragedy can be a false flag prelude to Word War III. Why? The world economy is not getting better as propagandized in the news. USA economy is getting worst. Her QE easing does not mean USA is recovering. Unofficially, there are so many people unemployed which I am very pity to them since I studied there before. Europe is also getting worst especially if you look at Spain and Portugal. One by one their banks have to close shop. Without their political will with honest governments, I don't see how they are going to recover their economy except by World War III. To make matter worst, Brazil, Russia, India, China and South Africa just announce their own BRICS Bank.

By the way, Holding Company Of Portugal’s 2nd Largest Bank Just Filed For Bankruptcy Protection
Read more at http://investmentwatchblog.com/breaking-portugals-banco-espirito-santo-says-it-cant-meet-obligations-asks-to-be-placed-under-controlled-management/#zGUAKges3l6pRIZJ.99

The missing of MH370 did not achieve the planners' original objective. Malaysia government still want to maintain economy neutrality. They hope MH17 should finally convince Malaysia to be their economy slave. So, to Malaysian citizen, you should brace for a bigger impact. Invest in property and other physical wealth as soon as possible.

Lelaki Paling Kaya di Babylon

I made a huge investment in 2008 by buying my first shop lot. Based on my analysis, in Johor Bahru, an investment in shop lot can give positive cash flow and higher capital gain in a shorter time compared to investing in a house. However by end of 2010, I was depressed because the cash flow was not as positive as I expected. It was weird when your analysis and surrounding properties showed the other way around.

There must be something that I did not know. So, I started to search for information in the cyber space. My first reading was Rich Dad And Poor Dad by Robert Kiyosaki. To my disappointment, the book was not as good as told by my friends who involved in direct selling. For those who never went to university and learn any economy class, yeah it might be an eye opener for them. The story line was bad and the writing style was also bad. But the worst concept being taught in the book was you should pay to yourself first before settling your debt.

As a muslim, this is against the teaching that you should settle your debt as soon as possible as if you are about to die. Something is wrong about this book. Then, I realize this book has never been in the top ten of financial motivation book. After some digging, I found out Mr. Kiyosaki has used The Richest Man in Babylon as on of his main references. This book is also known as top five books in financial motivation book.

After I got a copy of The Richest Man in Babylon, I spent the whole day reading the book. In fact, I cleared my schedule for the next three days to reread the book several times! There is something in the book which inspire me. But the book was written in King's James English style. Thus, it was hard to absorb and understand everything in a single reading.

The book is good for any kind of background, religion and countries provided you can put aside your prejudice for a while. For a poor man yet with a good command of English, this book can really inspire you to do better in your life. For those who always blame on the luck will be ashamed on yourself for not working hard and smart instead. While for those who already achieved some status in their life should pursue for higher goals.

Upon understanding the whole concept in the book, I tried to analyse my situation, reflect on the modern financial world and modify some of them based on my religion. My immediate understanding was written in my translation book in Malay language. I felt like to tell all my friends, relative and acquaintance what I have discovered. Then I realize not all Malays can read English at high level and to make it worst King's James English style is not common to many people. Therefore, I decided to make a complete translation of the book to Malay language.To my surprise, my translation work strengthen my understanding. And soon, I found out the tricky solution to the basic tactics, strategies and philosophy in my life. They have became my base knowledge in wealth accumulation. The book also taught me to always be on guard from bad investment.

For those who have not read the book, I recommend you to read the book at least three times and discuss with your friends. If your English language is not so good, you can get the EBook of translation part 1 for RM20 (more than 150 pages) and part 2 for RM20 (more than 150 pages). The partitioning was done to ensure if you feel the first part worth it, only then you should buy the second part. On both parts, I wrote my understanding, analysis and examples.

HAPPY READING!

Overnight Policy Rate increased by 25 basis points to 3.25

There is another good news for property investors this afternoon. Bank Negara Malaysia announced that the OPR has been increased by 25 basis points to 3.25. The complete announcement can be read here. Soon afterwards, banks are going to increase their lending cost.

This also means those who like to speculate instead of investing for a long term will receive their shock when the monthly cost increases while it is harder to sell their speculated property. However, the OPR increment will also affect those who plan to buy for staying. They have to recalculate their plan and modify accordingly. This means lesser supply for new homes for rent. For property investor who already bought their properties, this means the rental fee is going to increase provided the economy growth stays the same.

Anyway, the OPR increment is important to ensure money supply is sufficient for the whole economy activities and stability. There are signs weak economy indicators in USA and Europe. If USA economy crash like in 2009, the FED may reintroduce their stimulus package as before. Thus, the same cycle may repeat again. But, does Malaysia's fundamental still the same as before or worst? 

A Lone Ranger Property Investor

It is difficult to work alone, no one to discuss any plan, strategy and tactics. You have to work on your own to find potential properties to invest, spend a lot of time and energy, ideas to improve managing your investment, and no one to exchange ideas to improve your rental income.

Like the Lone Ranger said in the movie, "They control everything..."

Yes, it looks like government control everything. It looks like government like to restrict people from investing and improve their wealth. In reality, government roll is to ensure economy stability all the time. It was a perfect timing when various measures were introduced or tighten in order to reduce property speculation. In a very hot market, many novices can easily get hurt especially when they work like a lone ranger. Various government moves have shown some good results to prevent overheating in the property market which can be read in here, here and here.

However, if you are creative, there are ways to invest at minimum cost, selecting the best property and expand your investment. Despite many restrictive regulation by the government, there are still many ways to invest in property. When the market is hot, prices escalate every month, it is hard to think logically. Many of your moves are based on gut feeling or else the investment opportunities are taken away by the speculators. Now the investment situation is getting better because when the speculators has been reduced to minimum, the real investors can plan and take action in a more prudent manners.

It is sad to see other people especially those who close to you did not take the opportunity to invest. Instead, they just complain their life are getting harder due to the rising cost of living. I have shown to some of them that not only why property investment is important, I also showed a list of potential good investment for them. A few of them have been shown how they can raise the capital for down payment, lawyer and duty stamp. Yet, most of them refused to invest even they have the ability to do so. The saddest part is some of them have the connection to verify what I have told but did not do so. They have ability to think and process what I have shown, yet none was taken.

Those are last year story where most of them were shown how they can get the return of investment by monthly rental and profit. Today, many of them regret did not do so! One of my friend bought a new car last year instead of joining me buying a property. Today, he already complain how much he has to spend for the monthly installment and fuel! If he joined me last year, he should be able to buy a new car at the end of this year without any of those problems. Being a lone ranger property investor, there is not much you can do if people refuse to listen.

Last week after finishing up my full time tasks, I spent a few days outside of Johor.  I have found a very strategic location to invest with several type of properties to invest. It is very easy to evaluate the properties especially the same strategy has been duplicated many times in many locations in the country. My original visit was for technology research collaboration. But, after spending a few hours in the town and being an experience investor, I quickly identified prospective property investment and shown it to my new friend. As usual, many people do not realize the gold in front of their eyes. Hopefully, my new friend can strengthen his will to invest in this very good opportunity. Thus, I would not be a lone ranger in a new property location.

Profit in slowing down property market

Many novice property investors have limited strategy to gain profit in property investment. Most of them enter the market when the market is hot. This means the property prices increase very fast every quarter. The basic strategy they used were to buy during launch and sell upon completion. Thus, the only capital they need are the 10% down payment, lawyer, duty stamp and monthly interest. The capital investment is quickly recoup once the property is sold at 30% to 40% at the original purchase price. They are actually not property investors but property speculators.

Since the various measure taken by the government, a lot of these property speculators are out of the market. In fact, the number of people who have more than two residential property loans has drop drastically. This is actually a good news because the government actions has successfully purge those property speculators. However, I believe some of this type of investors are real investors. However, most of them were trapped when suddenly the property market slows down. To make it worst, they forgot to strategize their investment for a long term return as well during the purchase.

For a savvy property investors, all government measures give benefits to them because now:
1. They have more time to choose the best quality property based on their own criteria.
2. They have more time to analyze and strategize the purchase and return of investment
3. Rental definitely will go up as long as the current economy growth remains the same.
4. They can be more choosy when selecting the potential tenants.
5. They have more time to accumulate the capital leisurely.
6. Those already bought properties, the properties' value will keep increasing due to increase in rental value.
7. Their creativity will differentiate themselves from the novice property investors.

How much is the rental market will go up? It all depends on specific location. Although the basic property worth is almost the same, it is an art to know the actual and future potential. For example, two years ago, around Skudai, a single story terrace house with three bedrooms and two restrooms can be rented for RM400 to RM500 per month. Today, the same type of house can only be rented for RM700 and only if you can find one! In some townships around Skudai, the same type of house can go as high as RM1,000! You can use your imagination to calculate how much is the profit for the property owner.

And do remember, every month, there are people getting married and need a house to rent.

How is about commercial property market? One of my tenants who pay me for RM700/month moved out at the end of April this year. After advertising in May and selecting my preferred tenant, the new tenant pay me for RM1,000 starting from June this year! A two months payment from the new tenant is sufficient to cover my one month vacant possession.