7 BENEFITS OF INVESTING IN REAL-ESTATE.

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      1.      Low capital.

With down payment of 20% or more, one can start to buy a investment property that suit their budget.

 

      2..     Hedge against inflation

Statistic show that Malaysia 2016 inflation rate is 3.13% and Bank Negara Malaysia reported a 3.5%. The Fixed Deposit rate highest by current bank is 4.3% for 12 month tenure. The return on your cash saving is only less than 1% yearly.

Image from Statistic.com

 

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3.      Good value appreciation.

The property will appreciate in value with time and usually invested in reasonable location, one will enjoy not less than 30% appreciate in property prices after more than 5 years.

 

4.      High return on investment.

With minimum down-payment and the servicing of the bank repayment is by way of rental received, the return of investment in 5 years after adding in all expanses incurred to manage the property, the invested sum shoud generate a 100% return. 

 

5.      Easy to manage

The investor need to take care of the property and make sure it is reasonably tenantable and paid all relevant authority bills. 

 

6.      Return are predicatble

       It is easy to make prediction on the value of the investment based on the growth of the

       surrounding area. Data from NAPIC show that prices of propertyis rising every year.

 

Image from NAPIC

 

7.      Retirement Fund

As retirement are only due at much later stage in life, planning for a regular income after retirement is paramount in our life. Bank loan for property can be stretch up to 20 years and once the property is paid off, the rental received will form one part of our retirement fund.

6 WAYS TO BE AN INTELLIGENT PROPERTY INVESTOR.

1.   Invest what they can afford.

Invest what you have make you feel you are in charge of your money and booze your confident. It also provide you an immediate property investment opportunity.

2.   Choose location nearer to you. 

You be able to gain extensive knowledge of property around your own vicinity rather that area unfamilar to you. You will also be able to manage properties easily compare to those that is very far away from you.

3.   Choose rentable property. 

For investment property, it is best that the property that you invested in should be favourable for rental with reasonably good tenant community.

4.   Good management of investment monies. 

Managing monies is very cruial for investor as how well you understand the return and how it should be spend on maintenance as well as go towards payment of bill at the same time the utilization of surplus will make the investor grow it portfolio steadily.

5.   Buy regulary.

Intelligent investor will but regulary. It can be annually, 5 years once or 10 years once. It does not matter but the mode of buying should be there and form part of an investor habit.

6.   Capitalized investment every 8 years.

Being a Malaysian, after 5 years there is no Property Gain Tax be imposed by the tax department. Usually every 8 years, the property invested in reasonable good area should be able to have a return of 50% to 60%.

CAN THE IDEA OF HIGH INCOME NATION BE ABLE TO BOAST PROPERTY MARKET ?

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PEMANDU, Perfomrance Management and Delivery Unit is established in 2009 under the Prime Minister Department. The Government Tranformation Program (GTP) and the Economic Transformation Program (ETP) are the two important programs that being dish out by the government to gear Malaysia toward a develop country. PEMANDU objective and role is to implement, assess, facilitates and support in the successful delivery of it contents.

It was reported by the Khazanah Research Institute in Malaysia workforce reached 13.2 million by year 2013 in which 75% of them have the maximum of a SPM/MCE equivalent and the their salary or wages range  from RM1568 to RM2000. Degree holder salary or wages are at the range of RM3500.

 

With property prices in Kuala Lumpur already hit RM2000 psf , fringe of Kuala Lumpur at RM1000 psf or further away to Selangor all are above RM600 psf, can the normal salary man afford to purchase such houses ?

The World Population Review stated, Kuala Lumpur being the capital of Malaysia is the most populous city. Kuala Lumpur with the land size of 243 square kilometers, and Department of Statistic of Malaysia reported that by 2015, Kuala Lumpur will being habitated by 1.73 million people which make out to 7119 people per square kilometers.

 

Out of 7119 people 75% of them cannot afford a property in Kuala Lumpur. As the gap of earning not moving in tandem with inflation and productivity, property prices will not be able to see much increase in the coming years as the largest purchaser of Malaysia property is still Malaysian.

 

Under the GTP, 7 Nasional Key Result Area (NKRA) have been identified. Reducing Crime, Fighting Corruption, Assuring Quality Education, Raising Living Standards of Low-Income Households, Improving Rural Basic Infrastructure, Improving Urban Public Transport and Addressing Cost of Living is the 7 issue raise and being addressed.

The main issue is to raise the level of education and skill for them to be able to obtained quality work which enable them to enjoy higher income. “Assuring quality education” under the GTP’s identified area is too vague and too vast to be able to secure a higher earning for Malaysian.

The Star reported in November 2015, “1000 student drop out due to poor command of language.” 1000 medical students who has completed their housemanship drop out of being a full fledged medical officer due their poor command of the English language. This issue has been around for many years and GTP should be able to immediately zoomed into it. Without a good foundation in language, it tough to produce quality human capital.

 

Not only GTP does not manage to address the escalating cost of living as the program implemented such is basic healthcare, Bantuan Rakyat 1 Malaysia, (BR1M), Kedai Rakyat 1 Malaysia (KR1M) are not something new but most of big convenience store too can offer quality good for a lower price as these businesses purchases in bulk. With the implementation of 6% GST in 2014, majority of the goods and services has compounding effect in the pricing of goods which in reality good and services has been more expensive in regardless of what GTP has been offering.

 

Now, not only prices of ordinary and essential products has increase, it directly increases the already unaffordable prices of property in which make the property market to be stagnant, slow and cautious.

Prime Minister Najib Razak said, that the success rate of the ETP attained 111% of the KPI and Malaysia has been moving forward despite being in challenging global economic volatility.

  

At the same time, Nasional Property Market Report published by Bank Negara in 2015, show there is a annual drop of 14.6% approval for residential, while application fell by 10%.

 Currently, almost all the top developer in Malaysia, dishing out affordable products which is getting further and further away from the location which majority of the people are earning their living.

Further more, Malaysia unsold stock is on the rise, with NAPIC reported the numbers of unsold unit increased by 6% quarter on quarter in the third quanter of 2015. Maybank Investment Bank Research opine that increased of unsold stock cannot be avoid as supply continue to outstrip demand.

Real Estate Investment VS Forex

Lately, there is a huge interest being generated from global foreign exchange (FX) trading in the Malaysia, especially among real-estate investors. Reuter reported that the average trading per day in December 2015 is $4.47 trillion per day. World finance interview with Simon Smith, Research Director of FxPro, in June 2012, says that “the foreign exchange market has remain robust during the financial crisis and continue to grow.”.

 

When there is huge surge in a certain type of investment product, it only show that this particular product might be able to generate bigger profit and an attractive  return in investment.

Real estate has always been the traditional investment product which require one to have patient and long term planning. It also seldom experience huge fluctuation in prices and very much a tangible asset which one can see, hold and feel.

Wherelse, FX movement is in nano minutes which requires fast action and quick judgement from the investor as profit taking is all about correct timing . Investors need to be knowledgeable of it trend and movement of each currencies in order to have a better position in trade. Since the product is a fast moving investment, it is provide a quick entry and exit mechanism to the investors.

 

Investing in real-estate, investor just need to identify the product and purchase the product wherelse, for FX, one can trade on electronic platform with pre-deposited funds or choose to participate into group investment organized by the brokerage house or brokers.

Real estate investment are very much secure as purchasers are registered to the buyers and transaction are mostly done via lawyer. For FX, the investor can trade through license financial institution or corporate institution. The investor must only invest or participate in FX activities only with regulated and license brokers or traders.

 

According the the Wall Street Journal dated July 2011, “FX is the biggest financial market in the world” but “the potential pitfall are also huge”. The number one looses are due to investor being lure to dubious FX investment scheme. Leap Rate reported in October 2014, investors can check with New Zealand Financial Market Authority (FMA) on all license operators in New Zealand or check on all the list of names and company that is operating without license or authorization. International  of Security Commission (IOSCO) also provide similar services as FMA. According to Miss Campbell; “But the fact that a firm is licensed or registered is not a guarantee for your money.”

MIHAS - The Global Halal Market Place

Malaysia, Your Absolute Halal Production House.

Halal food and products is part of the Muslim religion practices. Based on research done by Thomson Reuters in collaboration with Dinar Standard in year 2014, the total halal food and beverages has touch $1.1 trillion in 2013 and estimated to grow to $1.6 trillion in year 2018.

The reasons for rapid growth of the halal industry was mainly driven by the growth of the Muslim population. According to the Pew Research Center report as of 2010, Islam is the second largest religion after Christianity which estimated a total of 1.6 billion people.

The increase in the economic growth of large Muslim population too increase their level of spending and open up their awareness to choose for better quality products.

According to the report of Spire Research Consulting, the combine disposable income of the American Muslim in 2012 alone is US$98 billion.

With already a huge and growing world market, Malaysia being a Muslim country will benefit tremendously and become an important market player of Muslim food production house.

An interview with Miss Doreen Low from Serunai Commerce Sdn Bhd, which is the driving force of "Global Halal Data Pool" said, that registration of all halal product manufacturer in Malaysia will propel Malaysia halal products into the world market effortlessly.

The role of Global Halal Data Pool in brief will be dealing with halal governance and world syariah compliance, halal certification recognition and integrity, halal services in total and most important is the trace-ability of the complete supply chain of the product. 

Miss Doreen Low from Serunai

Halal Development Corporation was established by Malaysia government to spearhead the growth of halal products manufacturing sector and the vision of Malaysia as the biggest halal hub in the world.

Extremely attractive incentives was roll out for investors that are keen to venture into this area. 100% income-tax exemption, investment tax allowances and exemption on import duties for equipment are available to encourage the growth of the halal industries.

For further information, please log on to www.hdcglobal.com/publisher/halal_park_incentives.

MALAYSIA SHOULD CAPITALIZED ON CHINA INCREASE IN IT INVESTMENT ON CONSUMER DRIVEN INDUSTRIES.

 

According to data from the China Global Investment Tracker, Malaysia benefited from $26.14B worth on investment and almost half of the investment by China are on the energy sector.

In the report by Ernst & Young title “Riding the Silk Road” in March 2015, China has been slowly increasing it outward direct foreign investment since 2003 and in 2015, it outward investment overtake foreign investment into China. It outward flow of investment as in 2015 rank third with a total value of USD116 billion.

 

As China focus on effort to balance it economy and spruce growth with new reform which according to the report by Wall Street Journal dated 21^st December  2015, senior leaders, “are looking at tapping into Chinese consumers’ rising demand for safer food, better medical care and other quality-of-life improvements.”

Malaysia fit into China requirement on it economy reform where focus will be onto “consumer driven industries” and “advance manufacturing” whereby, their over-capacity production can be move into other countries along the “One Belt, One Road” policy.

 

Being a country with all round summer, we can produce varieties of tropical fruits such as bananas, papaya, star fruit, rambutan and mangoes. A report by Euro-Fresh Distribution, dated October 2015, China has reach it capacity of planting banana. With it population of 1.9 billion, more fresh fruits it needed to satisfy consumer demand.

 

Beside agriculture, Malaysia is also a very suitable country for China to invest into food production. Ready to cook sauces, famous instant coffee mix, healthy drink, meal in an instant and exotic biscuit just to give some ideas. 

 

The Global Wellness Summit, New York, November 2014, reported that the world wellness market is worth $3.4 trillion which is nearly 3 times larger than the worldwide pharmaceutical industry. Malaysian with pools of talents from chemistry to food science can produce world quality products that not only be able to be excepted by the Chinese but the world at large too.

According to Dr Abdul Rahmin Bin Mohamad from the Food Safety and Quality Division, Department of Public Health, Ministry of Health Malaysia, “Malaysia food safety system is charatarized by it complexy and diversity, with different authority entrusted with the task of ensuring food safety at different stage of the food chain.” Speak volumn of the high standard of food production in Malaysia that will meet health requairement from China.

 

Malaysia is ready to take on the challenge to court the multi billion dollars investment from China as we have in place international standard of food production and good agricultural practices.