For Sale Update

One bedroom unit at Mutiara Villa, Bukit Bintang for Sale. (SOLD)

So far there has been a few viewings from some very interested buyers (and some not serious ones...). The highest offer I got is RM300,000. If you are willing to offer slightly higher, I will sell it to you.

I think it is a great property. It is tenanted for RM1800/month on 2 years contract expiring 31st December 2012. Upon transfer, I will pay you the rent deposit, which is RM4500 and you will be collecting rent monthly - with positive cash flow after costs.

At the end of this tenancy, you can easily raise the rent to RM2000/month because:

1. of high demand for studios/1br units for rent RM2000/month or below

2. limited number of studios/1br units in city center within RM2000/month price range

3. all new developments in city center cost their studios/1br units RM500k and up (meaning they have to rent above RM3000/month)

Breaking News - Friday 26 March 2010 - Singapore Condo Sold Out in 1 Day

Story in http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_506818.html

THE 76 Shenton condominium in the Central Business District sold out in one day during its preview as hundreds of buyers made a beeline for the prime project yesterday.
There were so many people vying for one of the 202 units that balloting was needed to sort out who got first crack.

The Straits Times understands that there were about 300 names in the ballot, with the buyers mostly Singaporean investors and permanent residents.

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The Hong Leong Holdings project has nothing over 1,000 sq ft: 134 one-bedroom units from 592 sq ft to 624 sq ft and 68 two-bedroom units of 968 sq ft to 975 sq ft. One-bedroom units were priced between $1,600 and $2,600 per sq ft (psf), or about $1.2 million, while two-bedroom units went for between $1,600 and $2,300 psf. That is about $2 million.

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Hong Leong credited the strong sales to the development's 'prime location, its attractive pricing, a solid design and healthy pre-launch interest'. Sources said property agents were apparently collecting cheques from keen buyers even before the project's launch.

Fire Insurance for Strata-Titled Properties

A few years ago I took out a loan to purchase a property. The loan agent also got me to get a fire insurance claiming that it was compulsory to get the loan. I had to pay over RM483/year for this insurance. At the same time, the condo that I bought made it compulsory for me to pay for their fire insurance. So, I have 2 insurance policies.

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Under the strata title act, it is mandatory for the management corporation of strata-titled properties to buy fire insurance. The management corporation will then charge the owners their portion of the premium. So, since I also got a fire insurance together with my loan, it seems there is a case of double insurance.

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I have just learnt that if the loan is obtained from any of the banks under the supervision of Bank Negara, there is no requirement to buy another insurance policy. These banks would accept the insurance policy purchased by the management corporation. So, it seems I was misled.

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Apparently I can get a refund for the pro-rata premium for the remaining period of the insurance. I am now applying for this...

Accident in a Gated Community

I have published comments about the implementation of Gated and Guarded communities in established residential areas here and here.

This morning there was an accident. It happened at about 615am when it was still dark. The driver of the car turning into USJ2 did not see the big oil drums put out to slow down traffic at the entrance by a security company hired by the Residents Association. As a result, the car swerved to avoid the drums but unfortunately it hit one of them and ended up on its side.

So Whose fault is it?

USJ2 is not a gated community although the "pro-tem committee" of the Residents Association (RA) is keenly garnering support for it. It is a mystery how many residents joined the RA however, it is unlikely to be the majority as apparently, members are required to pay a RM50 fee upon joining as required by its constitution. The RA for sure have not got the 85% consent from residents of USJ2 required to implement the Gated and Guarded (G&G) concept. But they went ahead to hire a security company, build guard posts and position oil drums in the middle of the road to slow traffic.

There is also a very passionate group opposing the G&G implementation in USJ2. It is understood that there has been a few police reports made against the blocking of public roads. While the security company has not begun to stop cars entering the USJ2 area for checks, the police did nothing to require them to remove the drums. So the drums stayed in the middle of the road and today there has been a serious accident.

While this blog will not favour, oppose, encourage or discourage any views on the G&G concept and implementation, it is important to highlight the issues so that people can decide what they want to do with their properties.

We have talked about good or bad development that can either promote or kill the value of properties. Well, this is one issue....

Note: Would really appreciate anyone with photos of this incident to send them to me so I can post them up

Low Cost Flats

It is common practice for developers of large housing estates to get their development permit with the condition that they set aside some land for construction of low cost flats for the poor. Usually, the cost of these flats ranges from RM20,000 to RM60,000 depending on the size and location. So, what happens then when the prices of these low cost flats appreciates and the owner now wants to sell it? Or what if investors want to buy them for investment purposes?

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If you are the investor, the answer is, don't touch it even with a barge pole. Low cost flats are for the poor and the title can only be transfered to the poor. Earlier I have seen many auctions involving low cost flats. There has been cases where investors went in for the auction, bid and won. Later, they found that the title could not be transfered because they obviously, being investors, do not really qualify to be poor. So, the sad story is, the deposit is forfeited....

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The land office have to consent to title transfer in any property transactions. In the case of low cost flats, one must fulfil the following criteria:

1. Married

2. Husband and Wife combined income must be less than RM2500/month

3. Both Husband and Wife have no other property or have taken out a mortgage

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Moral of the story is, do not buy low cost flats unless of course you are poor and you do not currently have a roof over your head. If let's say you are poor, you bought a low cost flat and then you work your way up to overcome your poverty - you can still keep the flat... but, if you want to sell your flat, your market is only those who qualify the 3 criterias above. That means, although you might be able to sell it easily considering there are many poor people in this country, you may not be able to sell it at a very high "market" price.

Stamping Your Tenancy Agreement

After you have signed the tenancy agreement, you need to get it stamped. The tenant pays for this. Usually, I have got the lawyers, the real estate agent or sometimes, the tenant themselves to get the document stamped. So years of getting people to do things for me has made me ignorant of this process until now.

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Suddenly, I have found myself in the stamping office last week. It is basically the Inland Revenue Board's office - same place where we submit our income tax before the online format is used. Like all government departments, there is a queue and you need to be there during designated times. I was extremely lucky that I got there 10 minutes before they closed for lunch at 12.30pm. If I missed that, I would have to go back at 2.30pm. 2 hour lunch time??

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Fortunately the queue moved very quickly. First one has to fill in a form. All the details required are in the tenancy agreement. After submitting the form at the counter, one has to pay the stamping fees which is computed as follows:

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1. Monthly rental minus 200

2. Multiply by the number of months rental

3. Divide by 250

4. Add RM10 for the duplicate

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So, if you are renting your place for RM2000 over 1 year, the stamp fees is as follows:

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1. RM2000 - 200 = 1800

2. RM1800 x 12 = 21,600

3. RM21,600/250 = 86.40

4. RM86.40 + RM10 (1 copy) = RM96.40

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Apparently they round the figure up to the nearest Ringgit which explains why I never got any coins change back.

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Immediately after the stamping fee is paid, the document is passed into a window beside it. There a lady checks the document and passes it to a guy who operates a stamping machine. He runs your documents through the machine and voila.... it is stamped!

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The whole episode was over in less than 15minutes. Only after the tenancy agreement has been stamped, it becomes a legal document.

Upcoming Project: SixCeylon at Bukit Ceylon

It is confirmed now, the 1970s Bolton Court at No. 6 Jalan Ceylon will be demolished and in its ashes rise the "SixCeylon". Bolton owns Bolton Court which consists of large duplex units for rental income. As it is 40 years old now and looking extremely tired, it's time for Bolton to tear it down and use the land for more income.

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The project is expected to be launched this June. It will consist of small 600sf studio units right up to larger 2, 3 or 4 bedroom units and apparently will be priced from RM750psf onwards. As the developer has announced that the price will start from RM600k, it is likely the studio units will be priced at RM1000psf. Like Wing Tai's Verticas, Lion's One Residency and UMLand's Seri Bukit Ceylon before it, every new project in Bukit Ceylon happens to be priced one step higher than the last one.

Will this be a good buy? I won't be queueing up for it. There is a huge glut in high end condos in KL at the moment. Tenants who are willing to pay for expensive condos are currently lacking severely. Bolton is touting 6% to 7% returns on SixCeylon which means one is expecting a rental of about RM3500/month. This is currently the rent in Seri Bukit Ceylon although many owners have pushed their rent downwards to grab tenants. So when the newer and better SixCeylon comes into the market, it means Seri Bukit Ceylon and One Residency will be pushed below RM3000.

No problems so far for rentals RM2000 or less. Today alone I had to turn down 2 prospective tenants.