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.