Real Estate Forum

Nowadays ,there are many real estate web sites that are equipped with real estate forum. The forums are indeed a very important feature of the internet today as it form the platform where users of internet all over the world are able to participate in a discussion on certain issue. But the forums are actually more than a discussion platform, it is also a place where user can find advice or solution to his particular problem. In the process of all those daily discussion, participants leave behind many threads which form a vast database when the forum has been running for a long time and whenever a user has a certain question which he need an answer, first before posting question over the forum, he can actually search the forum with the key words, who knows, someone may have ask the same question before and all threads related to the key word will be presented and possibly with the answer he needs. Thus the forum allow interaction between visitors of the real estate forum and enable them to share experience and opinion.

For the webmaster, it is a different ball game all together. Having a forum as a sub web to the main web such as having a real estate forum in addition to the real estate web site increase the activities at the overall web site as if the forum is popular then users will come back again and again and possibly also invite their friends to join the forum. The increase activities means having more pages for the search engine to index and thus help to improve search ranking in the internet. Moreover in practical sense, the participant also help to build content for the web site without much effort from the webmaster and webmaster can tap on vast knowledge of many participants to offer view, advice or solution to any particular real estate problems.

In addition, webmaster can also choose to participate in forum set up by others. A real estate webmaster can participate in other real estate forum to gain knowledge and at the same time build back link to his own real estate web site as users are usually allowed to enter their web address in the profile as well as the signature which is shown with each and every posting of his.

Thus the forum allow borderless interaction beyond people that users practically know and at the same time offer various benefit for webmaster in marketing his web site to the world which is flooded with billion of web pages.

Chicken and egg story in real estate development

Gone are the days when developer can expect to sell most of their houses right after launches and before actual construction commence on site. This is as oppose to previous peaks in economy when properties are snapped up even before construction even begin. Many developers especially those new developers who are just starting out would sure hope to sell their units before construction so that the project is effectively financed by the purchasers which will then very much lessen their financial burden and this especially apply to those new developers without track record who were not able to secure bridging loan to finance their construction.

Most developers especially new developer purchase their development land using bank finance and there are interest payment to meet every month. While some may say that they prefer to commence construction after they sell certain number of units but the situation today may not be favourable especially for those new developer without track record as potential purchasers may prefer to wait until the construction begin and until at least the sample house is ready or at least wait until construction is way over 50% or 60% completed so as to lower their risk before actually commit their hard earn cash to purchase the house. So if the developer wait for sale before begin on construction and while potential purchase wait for construction before committing to buy, then there will would be very little sale materialise while the cost of developer rise every month with the interest served on the land purchase loan. Hence it is like there ought to be an egg before there would be a chicken and without chicken, there would not be an egg.

Therefore, it is imperative that new developers focus on speeding up on construction and forget about sale for the time being and when construction reach a certain threshold, sale will materialise.

Market your real estate web site by writing articles

Setting up a real estate web site is easier than most people think. A real estate web site with portal, classifieds, blog, real estate directory, article directory & forum can be set up in a matter of days.

But what is the use if no body know of the existence of your web site. After completing the web site, there is always satisfaction that finally one is able to be part of ever booming cyberspace where news and articles everywhere suggested that there are indeed great earning potential, moreover not being in the web is kind of strange these days, many people have their own blog or for that matter blogs. However reality soon set in, sitting in front of the computer, checking the various statistic generated by the server provider or the script you have inserted into your web page, can be a very frustrating affair as suddenly you find to your horror that nobody or not many people are vi sting the beautify web site or the best web site you claimed to have built in your lifetime, the worst is that you may find that majority of the traffic to your site is none other than yourself.

So, no wonder there are so many web sites out there that try to outdo each other by offering the best tips in SEO, short for search engine optimisation, meaning that web site has to be optimised for the many search engine out there that determine the life and death of your web site. If your web site is consistently being shown at the front page of the search results of the major search engine for the targeted key words, then you can be rest assured that you may have your fair share of success with your web site. But then how do we ensure that our web site will be returned in the search results instead of other web sites, the main method is to improve the search ranking of your web site by increasing the back link to your web site or simply known as link popularity.

The most common method is to trade link with other web sites or simply to submit your link to directories but you only get one back link for each effort and it is unknown if the back link that you have obtained will still be linking to you six months down the road. The method which most SEO advocate now is the writing of articles and submit them to article directories. By writing good articles, there is a good chance that your articles may be adopted by other webmasters as additional quality content for their web sites, as all users of article directory are required to use the article in its original state which include a resource box which usually contain the link to the authors' web site and when one article you have written is used by 100 webmasters, then you have 100 one way back links and yes that is leveraging effect being exploited to the fullest in building back links. So instead of spending a lot of time carrying out the tedious link trading, why not sit back and write one good real estate article and submit it to a real estate article directory and begin the journey of building back link in a more effective way.

Purchase of property by foreigner

It was reported in all major local newspaper that foreigners no longer need to seek the approval of Economic Planning Unit's Foreign Investment Committee before they purchase a Malaysian residential house or apartment but there are two conditions they have to strictly adhere to:-

1.The property must not cost less than RM250,000-00.
2.The residential house or apartment must be strictly for own occupation only.

More detail information can be obtained from EPU web site http://www.epu.jpm.my

Free real estate web site scripts

If you are looking for a economical way to set up your real estate web site, then you may want to visit http://www.open-realty.org/ where the open source script can be downloaded for free. Modification may be necessary to create your own individual style but it is sure faster than writting your own script.

Use blogger.com blog site as personal real estate web site and make money through adsense

While it is very useful and important today for a real estate & property agent to have web presence, many have not much knowledge of designing a web site and depend on others to prepare one for them. While a complicated real estate web site with database and admin control is the most ideal as it is most versatile and complete but it may be costly to have one done by an IT specialist. To have a simple web site done with simple HTML require constant updating in the page format and page linking structure as new content are constantly added. For those who are not very familiar with web design, having the need to constantly updating the site can be a daily pain.

There are many web site that offer free blog site for web users and one of those is none other than blogger.com. But what has a blog site got to do with real estate web site ? The blog site such as blogger.com is free to use, just register for an account with a sub-domain name that you like and start posting right away. Every property for sale or for rent with photo can be uploaded as a posting. Information for each property can be included as detail as possible together with the photo in each of the posting. Whenever the agent is entrusted with a new property for sale or for rent, all he need to do is just to post the property with full details. There is no need to worry about the linking structure between the pages as it is automatically taken care of by the blog script. Moreover there are many available templates to choose from and agent can choose the look that he likes. there is also no real need to do regular backup and it save the agent a lot of hassle.

In addition, the agent can register for an google adsense account and start making money through pay per click internet advertising straight away.

As the number of listings increase, a google site search can be included to falicitate visitors of the site to search through the site.

So it sound like killing two birds with one stone, the blog site can serve as a well presented real estate web site with beautiful linking structure and adsense allows the agent to begin buiding his money making empire through the internet.

Does it sound too good to be true, not really, a check or search in cyberspace will reveal that many have already taken and adopt this approach.

How an ordinary person can invest in foreign real estate

Investing in foreign real estate is by no mean easy, though there are many investors with strong financial position have successfully invested in real estate in foreign country and coupled with strenthening of the currency of the country concerned, they have reaped extraordinary gain unprecedented in local real estate investment.

Investment in foreign real estate takes more than expertise in real estate investment, the invester need to be also well versed in the trend of the foreign exchange and take the necessary calculated risk as any appreciation in property value can easily be offsetted by the fall in the relevant currency.

For ordinary man in the street, investment in foreign real estate may seem far reaching as the process of acquiring property in foreign country may be very unfamiliar and the amount of fund involved may be large depending on the country that the investor wish to invest in.

However, the investment scenario of Malaysia has taken some changes since the relaxing of capital control by the Malaysian government and Malaysian are allowed to invest to a certain extent on foreign unit trusts.

Many local banks have been aggressively promoting foreign unit trusts for the past one year and some of those deal with real estate asset or real estate investment trusts (REITs) in foreign countries. Unit trust investment enable investor to invest from as low as RM1000-00 and investor can choose to incrementally increase their investment by buying additional units at various time. However investors need to take note of the initial charge that apply which can be as high as 5% of the investment, making it not quite suitable for short term investment. It is nevertheless very liquid as investor can dispose off the units rather easily. The unit trust also enable the investor to diversify as very seldom the trust deal with only a particular class of property or asset, they normally deal with a variety of properties such as commercial, hotel, residential, hospital etc.

The foreign unit trusts that deal with real estate provide local investors an additional option to invest their fund when local real estate conditions for investment is not favourable.

Real Estate Investment trust (REIT)

Real Estate Investment Trust or REIT in short is corporation or trust that uses the pooled capital of many investors to purchase and manage income property. REITs can also be a company that buys, develops, manages and sells real estate assets

REITs allow participants or individual to invest in a professionally-managed portfolio of real estate properties.

REITs are granted special tax considerations in certain countries. REITs qualify as pass-through entities, companies who are able distribute the majority of income cash flows to investors without taxation at the corporate level (providing that certain conditions are met). As pass-through entities, whose main function is to pass profits on to investors, a REIT's business activities are generally restricted to generation of property rental income

REITs offer several benefits over actually owning properties. First, REITs are normally traded on major exchanges just like stocks, they are highly liquid, unlike traditional real estate. Second, REITs enable sharing in non-residential properties as well, such as hotels, malls, and other commercial or industrial properties. Third, there's no minimum investment with REITs. REITs do not necessarily increase and decrease in value along with the broader market. However, they pay yields in the form of dividends no matter how the shares perform.

REITs can be valued based upon fundamental measures, similar to the valuation of stocks, but different numbers tend to be important for REITs than for stocks.

Negative equity

Real estate is the preferred choice of investment for many investors, young or old, men or women. The possibility of using the concept of leveraging make the real estate investment so much more attrative. With a certain amount of money to be used as down payment or deposit, investor can borrow an amount nine time the amount of deposit. Say if an investor has RM50,000-00 to part with, he can use it to purchase a house of value RM500,000-00 as the financial institution at this moment offer end financing up to a maximum of 90% of the purchase price. There are even cases where the financing went up to 95%.

Experienced investors will normally look for property where rental income can cover the monthly installment of the loan or at least the interest charges of the overdraft taken to finance the purchase. Thus by paying 10% of purchase price as down payment and the rest by bank borrowing and if the price of property increase by 10%, effectively the investor make a profit of 100% based on the investment of his own money.

However the opposite is also true, if the price of property dropped by 10% and if the investor sell the property, then he lose 100% of all his investment assuming that he is only serving the interest payment during the period he hold the property. In essence, even if the rental income can cover the monthly installment, the part of installment that is being actually used to pay the principal amount is also very little in the initial years of repayment.

Therefore if the price of property dropped by 10%, then effectively when the investor want to sell the property, the proceed from the sale may not be enough to settle the bank borrowing. That is when the investor has negative equity.

In short the definition of negative equity is as below:-

The difference between the value of an asset and the outstanding portion of the loan taken out to pay for the asset, when the latter exceeds the former. Negative equity can result from a decline in the value of an asset after it is purchased.

Leverage through real estate investment

Real estate investment remains the favorite of many investors by virtue of the fact that investors are able to leverage with the use of bank financing.

Say if a person has RM30,000-00 to invest. In stock market investment, he is only able to buy only RM30,000-00 worth of share. In real estate & property investment, the RM30,000-00 can be used as down payment for the property purchase and the remaining 90% can be paid by way of end financing from the financial institution. As long as the rental income is sufficient for the investor to service his monthly installment, basically the investor can take his own sweet time to wait for the property to appreciate in value. If the rental income is higher than the monthly installment, then he has positive monthly rental return which he can use for more investment. Therefore if the property appreciate in value by 10%, where the price now is RM330,000-00, then the investor has gain RM30,000-00, compared with his initial investment of RM30,000-00, that is effectively 100% return on investment.

Leveraging with bank financing allows the investors to reap higher and faster return and no wonder real estate remains the favorite form of investment for many investors.

Renovation, roof repair and theft prevention

It is now a norm that owner of new houses install security alarm system to protect their house from theft.

There are many types of security alarm system available in the market and they mainly consist of magnetic contact and vibration sensors to be installed at doors or windows to detect any intrusion. There are also infra red sensor to detect any movement within any particular space such as living room etc.

While the magnetic contact or vibration sensors will trigger the alarm whenever there is an intruder entering through the door or window. Infra red sensor will detect movement but that include the movement of pet or rat.

Some intruder may choose to enter the house through the roof by removing the roof tiles. The infra red sensors can be used for the space below the roof tiles within the roof truss area above the ceiling but that will cause a lot of inconvenience to the occupant of the house as alarm will be triggered when ever there rats moving above the ceiling area. So most owner will compromise safety for the sake of convenience.

But if you are renovating your house and if your renovation works include the replacement of roof tiles, then you can take the opportunity to install a layer of galvanised iron steel sheet or plywood immediately below the roof tiles location to completely cover the roof area before the roof tiles are being relaid on the galvanised sheet or plywood. The steel sheet or plywood will prevent easy entry of thief as any cutting of those material will create noise and takes time which the thief surely do not want.

Moreover if you choose to use galvanised iron steel sheet to cover the roof below the roof tiles, the roof will be almost completely leak proof thus serving two purposes of theft prevention and leak prevention.

The advantage of having a web site for property agent

The real estate or property agent deals with sale or rental of properties on behalf of property owners. They normally have huge database of properties entrusted to them by house owners.

To make known the available properties to the public either for sale or for rental, the property agent normally resort to regular advertising in the local newspapers. They normally would need to advertise over a long term period as potential buyer or renter may not notice the properties if the agent only advertise for a day or two. In fact, many of them advertise everyday.

Advertising over a long term period is going to incur a lost of cost for the real estate agent. It is also not possible to advertise all the properties in their database as doing so would further escalate the cost.

When the agent only advertise a handful of properties out of the many they have, they would still need to attend to enquiries from public as to whether they have certain property at certain location for sale or for rent. This will put strain in the operation of the agent as the agent will be so busy to attend to calls that he has no time to carry out his other tasks. The ratio of enquiry materialising into actual sale is rather small thus imagine the number of enquiries a agent would have to handle before he clinch a sale.

Moreover, it will also be difficult for the agent to keep track of his own database if the database is large.

Having a web site with database will make life of the property agent much easier. The agent will only need to submit every new property to his web site and it will be immediately available for viewing by the public, it will remain in the database and the web until it is removed. The real estate web site can be equipped with advance search feature so that by input in the criteria such as location, price range and type of house, the web users or public can search for the property of their choice. Which means that the advertising is immediate and live 24 hours every day, every year until it is deleted.

Moreover the advertising on the web has world wide presence. It also allow the agent to manage his database more efficiently as he will be able to track his database, add property into his database or delete property from his database at any place or any time as long as he has internet connection.

The internet advertising allow the public to view the complete list of properties the agent has at any time or any place with internet connection connection without troubling the agent, the amount of phone enquiries will reduce and this will enable the agent to lead a more quality life and has more time to carry out other tasks thereby ultimately reduce stress of working.

Using a blog to present progress report to house buyer

Recently when we commenced construction at our development project site, we wanted to prepare a web site where we could upload progress photo of our project site so that buyers who bought our house could monitor work progress without visit the site and dirty their shoes. Preparation of web site is not difficult but the process of having to consistently change layout of page and adding new pages and the linking structure between them everytime a new photo is added is tedious. So we decide that we might as well use a blog where we just upload a photo together with a description as the title of the posting and the result is extremely effective because everything else such as date, page layout, linking between pages etc are all taken cared by the blog scripts. There are also many sites that allow users to register their individual blog such as the one we are using now. One of the main advantage of using these blog site to maintain your blog is that you do not need to maintain a server and they are free to use except for the internet connection, there is also no need to carry out regular back up.

Visit our site http://garden-city-homes.blogspot.com to see what we are talking about.

The investment prospect of various types of residential building

There are generally a few types of residential units that exist in the property market namely

1.Terrace house.
2.Semi-Detached house.
3.Bangalow house.
4.Apartment.
5.Condominium.
6.Town House.

Terrace house, semi detached house and bungalow house are classified as landed property.

Landed property consist of mainly a building that is built on a piece of land with individual land title.

Apartment, condominium and townhouse are classified as non-landed property and these types of property are only issued strata title as there many units that share the same piece of land.

For all types of residential units, there is further classification as to whether the land is freehold or leasehold. Freehold land entitle the owner to own the land in perpetuity whereas leasehold land allow the owner to own the land for period specified in the lease.

Property with freehold title appreciate faster in the long term compared with the property with freehold title.

Landed property also appreciate faster in the long term compared with the non landed property.

If one is considering buying a landed property for investment purpose, it is wise to consider buying a freehold landed property with large land area such as semi-detached or bangalow because as time goes by, the building deteriorate and depreciate but the land appreciate, normally the appreciation in land value far outweight the depreciation in building value. As such one can find old semi-detached or bangalow house at strategic location fetch high value even though the house is in very run down condition. However, it is worth noting that landed property seldom fetch high rental return unless it is situated at road side and used for commercial purpose.

For those who need high rental return, it is wise to consider high end luxury condominium at location favoured by expatriate.

Therefore, the choice of residential units depend very much on individual requirement. If high rental return is your priority, then high end condo is the obvious choice. If you do not need high rental return to pay the monthly installment, then landed property with large land are can be considered as in the long term, such investment is equivalent to investment in a piece of land and land value appreciate over long term unmatch by other investment.

Is there a difference between a housing loan with full overdraft facility and a flexi housing loan

In today very competitive environment, many banks have introduced in one form or another a flexi home loan where the borrower has the liberty to pay off the loan faster and yet be able to withdraw fund from the account to meet his or her emergency financial needs.

The flexi home loan look similar to the type of home loan consisting of a full overdraft facility. The one with full overdraft facility usually is offered at a higher interest rate whereas the flexi home loan is offered at a slightly lower interest rate.

While the two may look similar in purpose where they serve the need of especially those in business where they may have excess fund to settle their loan faster and yet sometime they may need to withdraw fund to meet their business needs.

The loan with full overdraft facility is provided with a cheque book where withdrawal of fund is as simple as writing a cheque, the withdrawal from flex home loan usually involve a visit to the bank.

In spite of their similarity in purpose, there is a major difference many people are not aware of. The one with overdraft facility is offered with a credit limit which the borrower can use for as long as the property is charged to the bank and as long as the overdraft account is operated within the preset limit. The flexi home loan however is offered for fixed term for a number of years depending on the age of the borrower and with a preset monthly installment. The amount owed by the borrower decrease with each preset installment paid and the borrower is only allowed to withdraw the reduced amount together with any excess payment paid earlier, so as time goes by as more and more installment have been paid, the amount which the borrower is able to withdraw decrease thus limiting its purposes as standby credit for businessmen.

The advantage of internet advertising of real estate

In our daily life, we are flooded with a variety of advertisement from the various mode of media such as newspaper, television, radio, magazine, billboard, flyer, email marketing, internet etc.

Advertising is an integral part of business as business owner need to reach out to consumer to promote their products or services.

However for the advertising to have an impact, the advertising will have to be placed or aired on a consistent basis as there are simply too many advertising in our daily life and it is simply not possible for us to notice or absorb all of them. One of the example is the real estate advertising whereby one can find at least 10 pages of property classifieds in our local newspaper. As advertising cost money, many or most house seller resort to placement of smallest classified possible and this results in the classifieds section of local newspaper look like a flood of fine print, it is not possible to read through or sieve through all listing simply because there are too many of them.

Moreover, to increase the chance of the listing being noticed by house buyer, house seller would need to advertise more than once as potential buyer may not read their advertisement on the day the advertisement is posted. The longer they post their advertisement, the more they would have to pay.

That is where internet advertising excel. For a start, internet advertising are mostly free, there are quite a number of property listing web site and classifieds web site that allow house seller to post their house for sale without charging a fee for listing. Some web site allow free listing up to a year period and even if the house is not sold after a year, the user can repost his listing until his property is sold or rented.

Most of the property listing web site is equipped with advance search function whereby house buyer can search for the property they wanted based on certain criteria such as location, price, type of house etc, the search engine will search through the database and list out only listings that fit the search criteria, therefore the buyer does not need to read through the entire database, the search engine carry out the short listing, thus saving time.

Apart from the above, the property listing web sites are also regularly being indexed by the search engine such as google.com, yahoo.com, msn.com and many others. All listing details are also picked up by these search engines and when web users search for a particular property, the search engine can also return results that originated from the listing at the property listing web site.

As internet listing exist in the cyberspace over a long period and with the availability of search engine, there is an increasing chance that the subject property will be noticed by potential buyer. Most important of all, it can be done at almost zero cost except for the internet connection which is anyway needed for other purposes.

In the future when the chidren of this generation grow up, one can expect that internet advertising to take over the conventional classified as it is unlikely that the children of today are not exposed to internet.

Malaysia property, to buy or not to buy

Recently, the new property launches by property developers have shown trend of price increase especially the properties in the higher end bracket.

This has inevitably caught the attention of some real estate investor as to whether there is a property bubble in the formation or is the bubble about to burst. The reason being that we are approaching year 2007 where we are now almost 10 years since the previous peak in economy.

While many believe that property prices move in a cyclical manner, the question is whether the cycle now hold true to the historical pattern of 10 years.There are however conflicting view from the various people I spoke with. Some are predicting that the down trend will come soon since we now almost reach the end of 10 year cycle. Some argue that we have yet to see a real property boom since 1997/98 as there aught to be a boom before there is going to be a bust.

We actually prefer to adopt a view based on analytical thinking. The situation today is rather different compared with the previous peak in 1997/98.

Firstly, the bank interest rates scenario is very different, back in 1997/98, the highest fixed deposit rate is about 13.5% whereas today the fixed deposit rate for 12 month tenure rarely exceed 4%. This imply too the difference in base lending rates of two different time.

Secondly, the recent inflation that we have been experiencing is attributed to the cost increase resulted by the increase in fuel price. It is not caused by the increase in demand due to speculation.

Thirdly, the recent credit thighthening in bank borrowing is aimed at the auto sector where prices have plummeted due to NAP. Many bank still offer loan at 90% margin with additional 5% for MRTA insurance.

The increase in property prices is generally due to three factors :-

1. Land cost at strategically good location has risen substantially over the years.
2. The increase in fuel prices has made transportation dearer and building material cost more these days.
3. The developers are generally building larger units nowadays.

So to buy or not to buy, that is still a multi million dollar question, but if you are buying property for your own occupation and if the house you are looking at is at the location that you like, then anytime is good time to buy your dream house.

But if you are buying for investment, then be prepared to put in some effort on risk analysis, however if you have the financial muscle to ride through any economy storm, perhap properties with good rental return will be more attractive as the depressed capital value of property with good rental return will not be that greatly felt during reccesion because even if you were not able to get rid of the property but at least the return from rental will still enable you to ride through the storm until better times return.

Debt consolidation, simply explained

Debt consolidation simply means obtaining a loan to settle all other outstanding loan and end up servicing one loan instead of many others. The advantage of debt consolidation is apparent for those who find themselves swimming in a pool of debt with high interest such as credit card debt or personal loan debt where interest could be in the region of 1.5% percent per month or close to 24% per annum.

The cheapest form of loan one can obtain from the financial institution nowadays is the housing mortgage loan and with the increase in property price over the years, it is most likely that those with property could refinance their property at interest of say 6% to 8%, on top of that the financial institution offer zero moving cost where loan documentation and legal fees are absorbed by the bank. By obtaining additional financing from the property loan to settle the all other debt, one could potentially save in interest payment and allow a person to end his debt earlier. This type of loan will enable one to pay off all of his debt with one payment each month, rather than by having to make several monthly payments. Moreover the loan available for property come with a lot of flexibility where one can choose to pay back more in monthly payment if extra fund is available and hence even further cut short the time frame for one to get out of debt.

By obtaining a debt consolidation loan, one will enable himself to pay off all the debt he has incurred and only have one left over, which will be the loan.

Build-then-sell concept vs Sell-then-build concept

The Malaysia government recently approved the concept of build-then-sell for housing development project. The build-then-sell concept is essentially a 10:90 concept whereby the house purchaser pay 10% of the purchase price first and then pay the remaining 90% of the purchase price upon the completion of the house with certificate of fitness issued.

The conventional sell-then-build require the purchaser to pay 10% of the purchase price upon the signing of the sale & purchase agreement and the remaining 90% is progressively paid to the developer in accordance with term of payment accoding to stages of construction as stipulated in the sale & purchase agreement. The developers are required to adopt the term of payment approved by the housing ministry for the remaining 90% of the purchase price. The house purchaser can pay the developer by cash or bank loan. In essence, in the sell-then-build, the house buyer part finance the developer in the construction of the project and the financial institution basically lend the money to the individual purchasers.

In the build-then-sell concept, the developers will not get to be financed by the purchasers like in the case of sell-then-build and therefore the developers will have to obtain more financing from the financial institution to finance the project up to the stage of completion.

In order for the build-then-sell concept to work, the bank will have to play a major role by providing the additional financing up to the stage of completion and this will inevitably increase the risk exposure of the financial institution. The bank normally will prefer to lend to individual purchasers in many smaller parcels instead of lending it all to the developer in one parcel.

Hence, for those companies that has just started to venture into the property development field where they do not have the necessary track record, it will be rather difficult for them to convince the bank to provide them with the financing to do it in the new build-then-sell way.

Fortunately the two concept will be allowed to run parallel otherwise many aspiring up-start developers will not be able to kick start their project.

Buying land for development with no money down

There are many books in the market and many websites in the cyberspace that advocate the purchase of property with no money down. While it is possible to purchase property with no money down in many countries, it is rather difficult to do so in Malaysia as the maximum margin of financing offered by the financial institution for the purchase of residential property is 95% of the purchase price and the maximum margin of financing for purchase of land for development is only in the region of 60% to 80% depending on whether the borrower has track record or has good relationship and good standing with the financial institution.

Most often than not, those who intend to purchase a piece of land for development purposes need to fork out substantial amount of cash as down payment let alone to purchase with no money down.

However the developer can always strike a deal with land owner to jointly develop the land in a joint-venture deal where the land owner provide the land for development and the developer bear all other expenses in connection with the development of the land. Upon completion of development, the land owner is then compensated by the developer a certain percentage of the completed units which can range from 20% to 50% depending on the value of the land. In such a joint-venture development, the land owner is normally compensated a value higher than the amount that the land owner will get if he were to sell his land, thereby effectively sharing the profit of the developer.

The developer in effect sacrifice part of their profit to compensate the land owner but the developer is spared from forking out a lot of cash for down payment of the land as well as spared from paying holding cost of the land. As the units are only distributed to the land owner upon completion of the development, the developer effectively only pays the land owner upon completion of development. Therefore effectively buying land for development with no money down.

How to save interest on housing loan

Buying property almost always involve financing especially for most of those who are buying their first house. Majority of those who buy their first house buy it when they are young and when they are not that financially strong and financing is always used to finance the purchase.A home mortgage or housing loan is a long-term credit that a house buyer or a house owner obtains from a financial institution to finance his property purchase or refinance his existing property. In general , the subject property or house is used as the collateral for the mortgage, thus the term "home mortgage" is commonly used to described credit facility that is extended by the bank or financial institution. A home mortgage is usually comprised of a large loan which is why in most cases a home mortgage or home loan can take 15 , 20 or even 30 years before the borrower can pay back the due amount. In a home mortgage, the due amount to be paid by the borrower include the principal amount of the mortgage and the interest owed relative to the outstanding balance which usually translate into a fixed monthly installment over a fixed number of years.

It is possible to repay the loan earlier than the stipulated repayment period by making lump sum payment midway through the loan tenure and most bank or financial institution require prior notice to be given or some may only allow such lump sum repayment at end of financial year with ample notice. Paying off the housing loan earlier in this manner save the borrower a lot of interest charges but the only disadvantage is that the fund that is being used to repay the loan in the lump sum manner is no longer liquid unless the property or house is refinanced.

For those who wish to pay off a home mortgage quickly, there are things to be considered. First and the foremost, the person must make sure that he has a stable source of income. He has to ensure that paying off his mortgage will not over-extend his cash flow. There are many such considerations that should be carefully planned and organized before deciding to pay-off home mortgage. Second, it is also important that he has a ready reserve of cash just in case of emergencies.

There is however many choices in the market place today as far as the housing loan is concerned. In particular there is a type of housing loan that is offered as an overdraft facility rather than the term loan which is to be repaid over over a fixed term.

The overdraft facility that is offered in place of the term loan allows borrower to deposit any amount more than their monthly installment anytime, and as often as they wish. Any extra amount deposited will reduce the loan interest. Every ringgit deposited into the account will reduce the loan principal and cut interest cost and thus shorten repayment period. In addition the amount that is deposited earlier than required can always be withdrawn to meet individual financial need so long as the account is operated within the allowable limit. Therefore borrower can deposit even their salary as soon as they receive it and later withdraw by writing a cheque be it for personal use or to pay bills but in the mean time the principal amount is reduced until the amount is withdrawn. The borrower can deposit whatever fund they have to pay off the loan as soon as they wish and still have no worry as the fund is always available in case of emergency.

Therefore be sure to consider the various option available when you decide to take a housing loan. A wise decision can save you tremendous amount of interest and paying off your home mortgage earlier can be a extremely rewarding experience. After all, nothing beats a worry-free, debt-free financial status.

How to be a property developer

Among the many various types of businesses in the economy, property developer rank among the top in term of prestige and profitability. It is by no accident that corporation big or small are involved in property development. Doing business as a property developer can be profitable and lucrative and at personal level can be very rewarding. However, to be successful as a developer, it is important to play by certain rules and apply certain proven techniques. Through this article we shall share some of the tips to help you become a successful property developer. The very first step in any property development project should be to carry out market survey and research. A direct method is to check with real estate or property agents as to what types of property is most popular and in great demand as well as the average selling price of the respective properties. Market survey and research will also help you to identify the area that has development potential. The real estate or property agents will be able to tell you what type of consumer goes for what type of property and what is the current trends in the area you have identified. The information collected will enable you to ensure that the properties you intend to develop meet the demand of the market segment you are targeting.

After identifying the particular area that you intend to commence your development project, the next step is to source for a suitable piece of land for the intended development based on your budget and proposed size of your development. You will also be need to get important information or data by checking with local planning authorities and such data may include the zoning of the area that your proposed land fall within. The local authorities should be able to tell you whether your proposed development is inline with the overall master planning.

In addition, bearing in mind that your aim as a property developer is to buy land at a low price and sell the finished products (housing units) at high prices. A good buy will very much reduce the risk involved and hopefully will enable you to achieve the profit margin that you desire. The other aspect to consider is how much you will need to spend on purchase of the land and the building of the properties to achieve your desired selling price and then work out the necessary cash flow. Careful planning on the financial aspect will enable you clearly understand your financial need so that you will have time to apply for the necessary financing at the very early stage of the development project which will inevitably reduce the risk of you being caught off guard in any financial demand mid way through the project. It is also essential to have a good understanding of the practicalities and the steps involved in property development. Before buying, make very sure that you understand the building regulations that will affect how you will develop the property as well as the risk involved.. In conclusion, if you have carried out the market survey and research thoroughly and are targeting the right group of customers, if you buy well, if you manage your costs carefully and if you market the completed properties efficiently, you could make a lot of money as a property developer.

Renovation & structural soundness

Everytime a house owner purchase a new or old house for his own occupation, most likely he will do some renovation to the house he bought. The extent of renovation depends on individual requirement or budget. Whenever a house owner want to have renovation done to his house, he will most likely look for a interior designer and a renovation contractor. The renovation contractor will construct the skeleton of new extension or make modification to the existing structure of the building as well as the various services such as plumbing installation works, sanitary installation works and the electrical wiring works. The interior designer will then work together with carpenter to finish off the renovation by putting of the finishes and furniture.

Most of the time, after confirming the quotation of the renovation contractor, the owner will allow the contractor to proceed with the construction work without much intervention. The house owner normally get the renovation contractor through recommendation of friends or relatives and they assume the contractor to be competent as far as construction is concerned.

While most renovation contractor are competent to a certain extent in construction works, many small timers acquired their experience from years of involving in the business, many will built according to what they know when they were not provided with a structural plans. While not all renovation involve structural changes, some major renovation may involve extension and changes to the existing structure. In the absence of structural plans, the contractor will built the structure based on his experience and unless the contractor himself is a qualified engineer, his experience in structural soundness of building actually leave much to be desired. There may be cases where the owner may want a certain pillar (known as column in engineering terminology) to be removed and the contractor obliged without advising the owner on the consequences in taking down the column. There may be cases where owner decided to add another floor to the building and the contractor do so without strengthening the column and the foundation. Hence it is advisable that the owner engage a structural engineer to design and supervise the construction so that the end product is structurally sound. Or at least the owner should include the engagement of the structural engineer in the scope of works of the contractor so that the owner can request from the contractor a stamp and certified copy of the structural plans before the commencement of construction and with the structural plans, the owner can liaise with the engineer concerned so that the construction work is actually carried out in accordance with the certified plans.

The engagement of structural consulting engineer is important as the construction of the structure only account for a portion of the total cost of renovation where the other cost that involved include the finishing works and the furniture and fittings that is installed in the property itself. There are many cases where the house owner proceed with the renovation without a structural consultant and when the renovation completed with major works and much money spend in putting all expensive finishing and fittings, suddenly they found their house start to crack here and there and when all things have been completed, it would cost a lot to rectify the construction as a lot of construction works will have to be carried out again in the correct manner and in the process, all expensive finishes will have to taken off and majority will be damaged in the process of them being demolished and of course the labour cost involved, not to mention the wastage of money.

Another case would be upon the completion of construction and if the interior finishes involve the putting up of ceiling below beam level and the wallpaper on the wall where all brick wall and column is covered up. In which case, any cracks that appear may not be visible to the occupant of the house and any visual warning to the impending failure may not be available and dweller may be caught off guard if there is any collapse that happen suddenly.

Therefore it is always wise to engage an engineering consultant if you intend to embark on a major renovation to ensure that whatever extension and modification to building is done in accordance with acceptable code of practice and standard before one even put in all the expensive finishes and fittings.

Tips on buying auction property in Malaysia

Buying auction or foreclosed property is regarded as a way where people can create a stream of income according to some famous authors. But buying an auction property is by no mean easy, there are many things one should look for when buying an auction property. Normally a notice for an auction sale is advertised in the local newspaper two weeks prior to the actual auction date and buyers are to do the necessary inspection before going to the actual auction. When the property is to be auctioned off, normally some of them are already abandoned by their owner and locked and this make inspection rather difficult unless the buyer want to enter the property in an unauthorised manner. Another possible case is that the owner is still occupying the property and inspection under this circumstances is rather impossible as normally owner would not welcome buyer to enter their property knowing well that if a successful sale occur, they will have to move.

Prospective buyer is also advised to do the necessary search at local land office to confirm the rightful owner of the property. To qualify for the auction, prospective buyer are required to prepare a bank draft or banker’s cheque equivalent to 10 percent of the reserved selling price.

During the actual auction day, if the property is priced at a very attractive figure, prospective may have to fight with others by bidding for a higher figure where quick decision are required at the auction hall.

If there is no bidder on that faithful auction day, then the property will be auction again with a cheaper price, normally 10 percent below the previous tender price. So if there is no bidder, you may want to wait for the next auction but bear in mind lower price may attract more bidders.

Successful bidder is normally given 90 to 120 days to settle the balance of purchase price. Sometime for a property to reach a stage of it being auctioned, there may be many outstanding bills like assessment, quit rent, maintenance charges or utilities bills that have yet to be settled. Apportioning those outstanding payment between yourself and the financial institution that called for the property to be auctioned may take some time. This coupled with some other red tape may make release of payment from your financing bank rather slow and make 120 days seem like a very short time. So it would be easier if prospective buyer has some kind of financing ready like having some other property to charge to the bank for ready financing in which case the purchaser would be able to purchase with cash obtained from the other financing taking the burden off the purchaser to obtain financing using the auction property itself within the very short time frame of 120 days.

Another thing the buyer should take note of is that if the buyer is buying the property for trading purposes with the intention to resell it to third party for a profit, then the buyer should take note that the transfer of the auction property cannot be transferred to the third party directly. The auction property must be transferred to the name of buyer first by the court before the buyer who is now the new owner can transfer the property to whoever that buy the property from him which mean that buyer who buy the auction property for trading should take into account the government stamp duty and legal fees involved in transferring the property into his name first. The transferring process can take quite a long time too therefore if the buyer of the auction property resell it to third party, he will probably have to wait quite a while before full payment eventually materialised. Because the long period of time involved, interest and financing charges have to be taken into account too. Otherwise the person who trade the auction property may find that trading auction property is not as profitable as he initially thought.

As there are difficulties involved in inspection of the auction properties as mentioned above, prospective buyer who want to buy the property for whatever purposes has to allow for repair cost as sometime the exact condition of the property cannot be ascertained.

Prospective buyer should also check whether there is a caveat on the property as removal of caveat may require court order and therefore incur cost.

If the original owner is occupying the property, there could be a case whereby the owner may refuse to vacate the property when the bidder has successfully bought the property in which case, court order may be required to evict the occupier and therefore the cost involved.

It is because of the uncertainty and hassle involved in buying the auction properties that make the general public reluctant to even try, therefore sometime even when the property is priced very cheap, there may be not many or no taker. However for those who are daring, with strong heart and financially sound, the auction may just present an irresistable opportunity for fantastic return on investment.