Tuesday, July 14, 2009

Updated: Verticas Residensi Preview

Finally it is out. Wing Tai Asia's long overdue launch of Verticas Residensi in Bukit Ceylon. I've just got an invitation for an "Exclusive Private Preview" this weekend. They have set up a very impressive show room at the site.

The price will be starting at RM2.35 million and goes all the way up to RM6.35 million!! There will be a total 423 units, completing in April 2011. This means the smallest unit which is a 2 bedroom will be above RM2 million. I understand the size starts from 1400sf which means RM1600psf! This is certainly setting a record for KL, not just Bukit Ceylon! Wing Tai Asia's maiden project which is the Meritz is now trading at RM1 million for the smallest units which are just over 1000sf.

I am curious, as well as hopeful how this project will perform because it will certainly set a new benchmark. Even the upcoming One Residency in Bukit Bintang has slid down to RM680psf since the peak expectation of RM800psf. Somerset Seri Bukit Ceylon is hovering around RM850psf. One unit at old Menara Bukit Ceylon transacted at RM320psf last year. So, nothing else will come close to Verticas Residensi in Bukit Ceylon.

The invitation card says "Visit us for an enriching living experience".... certainly need to be very rich to consider this project...

Updated 29th August 09: So, I finally got to visit the show room and learnt more about this project.

This is certainly a very interesting project. There will be 4 towers in total. Tower A being launched now has about 170 units which, at over 40 storeys they have 5 units per floor and 4 lifts serving them. This is kinda low density although the entire project with over 600 units sits on under 1 acre of land. Tower B and D will be launched later while tower C has been sold en bloc to Lanson properties which is running a serviced apartment in Ampang Hilir today.

I am particularly attracted to Type A1 2 bedroom units. This is a 1400sf corner unit which at the right floor has a direct view over Bukit Ceylon and the KL Tower. The main attraction of these unit is the extremely airy and bright rendering with windows in every room. The kitchen has a wet and dry part; hence this is very good for own stay and long term stay. Regency Tower blocks any hope of a KLCC view below the 21st floor. Hence, any units above the 21st floor comes with a premium. But the architect, the same one who designed Meritz doesn't like balconies. So despite the views, one is not able to step out and enjoy it.

However, the developer has come up with a 27th floor viewing deck. But enjoying the view in the intimate company of a loved one is totally out with this well thought common facility.

The price? Starting from around RM760psf or slightly over RM1 million for the smallest 2 bedroom units. The cheaper ones faces the back which means you are looking at Times Square, Pudu Raya and the afternoon sun. But I don't like this unit's layout because one of the bedrooms faces Type A1's kitchen and one bathroom has no natural light. So Type A1 is the way to go...

Anyway, the Type A1 nice layout would have won my money but unfortunately, the downpayment at 20% is a bit steep and too much to tie up for 3 years. This is despite other perks such as free interest during construction and 1st year, no maintenance fees in the 1st year and free 2nd car park.... I am also a little concerned about the landslide issues affecting Bukit Ceylon.

Thursday, July 9, 2009

Renting Out Your Property

OK, many people have been asking me... how do I rent my properties out? Do I use an agent? Or do I look for tenants' myself? If the latter, how do I go about doing it?
Well... I've done a bit of both but lately been using real estate agents more because it's becoming harder to find tenants. Not surprisingly, I'd get 5 or 6 agents calling me to arrange viewing for the same client. Times are bad... In such a scenario, to avoid a nasty situation, I would normally ask what nationality is the client first followed by other questions which may narrow down identity of the client. If I discover the client is the same one arranged by another agent, I'd be honest about it.
Anyhow, coming back to the issue about estate agents... I've had my fair share of problems with bad agents. For one, I can't blame them for being extremely aggressive and downright cunning (cos everyone is just trying to earn a living). Frankly, that's alright. What I cannot stand are those who take the commission then disappear and leave all the problems to me to manage. These are what I'd expect a good agent to do:
  1. Screen potential tenants before coming to me - obviously if the intention of the tenant is to rent my property to house his lot of labourers, I'm not sure I want to waste my time
  2. Prepare the property for viewing - i.e. airing the rooms, turn on the lights and aircons etc.
  3. Follow-up and negotiate with the clients - so that I don't have to!
  4. Prepare the contract, signing and stamping
  5. Collect the deposits and 1st month rent on behalf
  6. Help make sure the tenant pays the rent on time and follow-up with requirements
  7. Visit the tenant and the property every 3 to 6 months for inspection - to make sure they comply with the contract and not trash the place!
  8. If there is a default by the tenant within the 1st 3 months, they should find a new tenant to replace free of charge
  9. Become the arbitrator if any problems or misunderstanding occur
  10. Helping to renew the contract upon expiry
Most agents don't even do half of the above. They show the client your place. Then disappears and prays the client will choose one of the 60 properties they showed the client. If it so happen to be your property the client chose, they will do everything until their commission is paid. After that, they disappear again until the contract is up for renewal. But to be fair, I have dealt with a few good ones who take away all the hassles from me. They are hard to come by and remain my friends as well as my trusted estate agents.
Having said all that, unless the property is hard to rent out, I would normally try to do it myself. There are some very good websites where one can advertise for free such as w w w (dot) e x p a t k l (dot) c o m and w w w (dot) e x p a t r i a t e s (dot) c o m . These 2 are my favourite ones because they are really well patronized by potential tenants. Typically during good times, I'd get 10 - 15 calls a week when I advertise here and the property would be gone within 2 weeks. Nowadays, I'd be lucky if there are 5 calls a week and rent it out within a month. Still, the savings of a month's rental is enough incentive to do it myself.
I use an old template which I gathered from various contracts I come across in the past. On and off, I'd come across new clauses which are good and I just throw them in. I'm not sure how this will affect the overall contract when read in whole but that's a risk I can take.
Few months back I had a very difficult tenant. For some reason, she expected me to give her a 20% discount on rental after 6 months into the tenancy. Then when she managed to find another cheaper place to rent, she expected me to refund her deposit. Of course I refused and she threatened to take legal action against me. So after 8 months into the tenancy, she decided to move out anyway. Since I did not refund her deposit, she took off with my expensive beddings, smashed my vase, scratched the surface of my LCD TV, broke my fridge trays, peed on my sofa (yes... she URINATED on my sofa!!) and left the place absolutely filthy! She also did not pay the utility bills for 3 months and it looked like the aircons were switched on 24 hours.
The whole repair bill and utilities came up to almost the full deposit she put down and really nothing for me to gain. On top of that, it took me a good 2 months to find another tenant. So lessons learnt? Yes. I decided there should be a clause in the contract that says that if the tenant decides to prematurely terminate the contract, the deposit shall be forfeited and the tenant shall
also be liable to pay the remaining rental of the year as penalty...or something like that.... Then, it would make it worthwhile to sue the tenant if they default. Also, I think if you are looking for a no hassle deal, appoint a lawyer to do the real estate agent's job. The only problem is, they don't go out aggresively looking for tenants for you but at least tenants are less likely to mess with lawyers.
I would like to congratulate Helmy who posts comments in my blog and he made it an effort to come and see me last month. He managed to buy an apartment in Bukit Ceylon at a price (which in my opinion) 30% below market. It is freehold as well and with today's market, he should have no problems getting a tenant with at least 10% yield. He asked if I could share my contract template... so here it is:

This agreement is made on the __ day of ______ 2009, between ___________with an address at _________of ___________located at hereafter known as the Landlord. And _____________ (Passport Number:___________ issuing Country:________________ Expiry Date:_______________) with an address at ________________________________, hereafter known as the Tenant.

1. It is hereby agreed as follows:

1.1 the Landlord agrees to let and the Tenant agrees to rent the condominium, furnishings, structures and grounds (hereafter called the Premises). The monthly rental rate shall be as follows: RM________Unit, Structures and Ground rental Ringgit Malaysia (Ringgit Malaysia _________________________Only).

1.2 the tenancy period under this agreement shall be 12 (Twelve) months commencing on the ___day of _____ 2009, and ending on the ___day of ______2010, with an option to renew for an additional year. The renewal rental and the period of rental shall be discussed and agreed by both parties.

2. The Tenant agrees as follows:

2.1 to pay the Landlord a rental deposit equivalent to ­­2 (Two) months of rental payment or equal to Ringgit Malaysia _________ (Ringgit Malaysia____________ Only), which will be returned to the Tenant without interest 30 days (Thirty days) after the termination of this agreement subject that the condominium and it’s furnishings are returned in their original condition less wear and tear and that there are no out-standing rental. However, should any damage other than normal wear and tear have been caused to the Premises by the Tenant, the Landlord shall be entitled to retain all or any part of this sum depending on the extent of the damages or the costs incurred to remedy the damages. The Tenant shall not deduct the monthly rental from this security deposit;

2.2 to pay the Landlord a utilities deposit equivalent to ­­½ (Half) month of rental payment or equal to Ringgit Malaysia _________ (Ringgit Malaysia __________ Only), which will be returned to the Tenant without interest 45 days (Fourty Five days) after the termination of this agreement subject that all utilities bills have been cleared.

2.3 to pay the Landlord the monthly rental payment of Ringgit Malaysia (Ringgit Malaysia Only) for the Premises in advance within the ___ of every calendar month commencing from ________2009;

2.4 to maintain the Premises in a good state, keep the interior in a clean and habitable condition and exercise reasonable care in keeping the grounds tidy and attractive;
2.1 to assume liability for costs incurred for damage to the Premises negligently or intentionally caused by the Tenant, his family or employees, or persons staying with the Tenant;

2.2 to permit the Landlord or his authorized agent to enter and inspect the Premises, and to effect repairs and renovations, at all reasonable times agreed between the Landlord and the Tenant;

2.3 not to make any alteration or addition to the Premises without prior written consent from the Landlord. Any fixtures, fittings, items of household decoration which are not of a permanent nature and which have been installed by the Tenant during the terms of this rental shall be removed by him at the termination thereof and put back as originally was;

2.4 not to assign or sublet the Premises or any part thereof without the written consent of the Landlord;

2.5 not to do or permit to be done on the Premises anything that may be or may become a nuisance or annoyance, or that may interfere with the quiet enjoyment of neighboring premises by the Landlord and other occupants and to act according to the condominium regulations;

2.6 to pay all bills relating to the rent of Premises for electricity, gas, water supply, telephone, satellite TV and others (if any);

2.7 to return all keys of the Premises to the Landlord at the termination of this agreement;

2.8 to use the Premises only for dwelling purposes;

2.9 not to keep any materials of a dangerous, combustible or explosive nature, or any illegal substances or narcotics in the Premises;

2.10 if the tenant fails to pay the rental fee according to sub-clause 2.3, the contract will expire automatically and the Landlord has the right to take all necessary actions to evict the Tenant including the changing of locks.

3. The Landlord agrees as follows:

3.1 to confirm that the Landlord is the sole owner of the Premises and has the right, without any restriction, to let the Premises. It is further agreed that the Landlord will fully inform the Tenant of any person to whom he may propose to sell or trade the Premises during the terms of this lease provided that there be no changes on the provisions and condition of this Lease Agreement;

3.2 that on commencement of this lease, the Premises shall be clean, complete and to be readily available for this lease. The landlord will only be responsible to the internal and external condition and any renovation of the Premises;
3.3 to allow the Tenant to peacefully hold and enjoy the Premises during the period of this lease, provided that the Tenant duly pays the rental payment and observes the other conditions of this lease;

3.4 to pay all land taxes and any other taxes levied on the Premises.

3.5 to pay monthly maintenance fee of the Premises to be imposed by the management of the condominium

4. It is also agreed between the Landlord and the Tenant as follows:

4.1 the Tenant has the option to renew the lease, in case that renewing the lease is agreed to by both parties;

4.2 In the event that the Tenant terminates this agreement before the expiry date, the Tenant agrees that the Landlord shall keep the whole security deposit as a penalty.

5. This agreement is made in duplicate, the Landlord and Tenant each to keep one signed original.

In witness whereof the Landlord and Tenant have hereunder affixed their signatures:

6. Place of Payment

Every payment to be made by the Tenant to the Landlord there under shall be made to the Landlord in bank transfer to:

Bank Name:
Account No.:

Signed by,

Landlord Tenant

……………………………………… ………………………………………
(your name ) (_____________________________)

Appendix 1: Furniture List

Item Description
I verify that the above list have been received and inspected in the conditions noted under the remarks column:

Landlord: Tenant:

(your name) (_____________________)

Wednesday, July 1, 2009

Caveats on Buying a Property - Has it ever occured to you?

When you buy a property in Malaysia, you would employ the services of a lawyer. This is the most important thing because the lawyer would not just be preparing the contracts, they would also be doing a search on the property and the owner and loads of other stuffs. The lawyer would check things like, does the seller own the property, is there a title etc etc... In Malaysia, it is on the onus of the buyer to look up on these things. So, make sure you have a good lawyer because if the lawyer misses out on any search and you go on and sign the contract, you can't back out of the sale. Unfortunately that's how our law works. You go and buy a property, you would ask the seller, "Why are you selling the property?" Obviously the seller is not going to say because the council is going to build a graveyard next door or the next door neighbour are a bunch of maniacs who turn on the music full blast every night. These are the things that buyers should be looking out for. Same goes for developers... I remember few years back when Titijaya was launching their 1st project in Subang Jaya SS16, Tiara something.... They were promoting the fact that Inti College actually owns the plot of land next door. Whether Inti College actually owns the land or not, I don't know but it seems immediately after the project was sold out, the same developer went on to launch a huge high density condo project right next door where they claimed Inti College owns and implied that Inti College would be building their next college there.
In Australia, it is actually by law that it is the onus of the seller or the developer who has to inform the buyers of any issues relating to the property they are selling. Back to the Titijaya case, if this is Australia, buyers would be allowed to back out of the sale and get a full refund from the developer.