A lot of time whenever I talk about property investment to my surrounding friends, most of them are lack of financial resources. They will continue to tell you greater reasons why they can’t start their property investment and will continue to postpone their weaalth accumulation till following years as they “believes” next year will be better year to start. Are you one of them? For me there are 8 prosperous resources that you “must have” in building up your wealth which I would like to share with you shortly. These 8 powerful resources divided into 2 group that financial resources and non-financial resources. Let us talk about financial resources first;
1. Cash
Cash is KING. Do you think you can do more without cash? Maybe!! How? Teach you more next time. With cash you can buy a lot more properties especially getting good deals from desperate seller. Some might just let go their properties 20% (or more) below market value just to cash out. This is the best opportunity for those who have cash in hand. I remember my client told me he got one of the Double Storey Shop lot at Foh Sang back in 1998 for RM580K which at that time Foh Sang is the hottest and one of the most matured Chinese populated area. Virtually it’s impossible for you get property at that area but my client got it below market price simply because the owner son owing too much “ah long” money. Today he is receiving rental income of RM7K per month with listed company as tenant and current market value exceeding RM1M. I believed there is a lot more exciting story at your end that you might have miss out. If you have such story please share with us so that we never repeat our mistake.
2. Steady income
Steady income mainly derived from employment and self employment income. Of course if you are under employment your income is limited but as I say you have to take care of your own rice bowl. Whether you earn more or less its all depend on our own. If you really cannot earn more then the only way is to save more (spend less). For business owner, I continuously advise them to invest more into property rather than business. The reason very simple, your business might not earn more than property that you invested in for the past 10 years. Looking back at GBH story on ‘land controversy” last few months, the land itself already worth more than RM160M while the business still running at “LOSS”.
3. Equity
Equity here refers to difference between your property purchases prices with current market value of the property. If you started your property acquisition many years back, now you should have a lot of equity that bank can take it as security. In other words, even though you don’t have cash in hand bank will still willing to borrow you additional facility for your other investment by taking additional charge on your property as their security. Just to share with you, last year I have refinance my apartment cashing out more than RM150K from my apartment equity. And last week I cash out another RM50K from my condominium equity. Of course my repayment going to be more but its still manageable for me. Lucky enough my rental collected is still enough to cover all my monthly bank repayment.
4. Solid asset
Commonly “the RICH” are accumulating more solid asset mainly properties rather than holding more cash and liquid assets. They are getting richer day by day while their net worth grows tremendously than ever despite economy downturn. Do you believe it? You better do so. I never anyone holding more cash sitting on top of Forbe’s World Richest List!! Look at latest top richest man in Singapore last month, 8 out of 10 make it through property. Are you keeping your wealth in solid ground or liquid assets? Do you know you are depreciating day by day if you keep too much cash asset?
Non financial resources
The ground of wealth building started from personal motivation and it’s not mainly from financial ground. Of course if you don’t have money now, you need some other resources like:
1. Knowledge
Applied Knowledge is POWER. I believe a lot of people treating my blog as another reading resource. How many if you really go and apply and do like what I teach you? I beg not many of you going to do what I ask too. How many of you spend few hundred per years buying these financial books to upgrade your help and expanding your knowledge? As I always say, some author spend their entire life (about 30years) publishing one books that cost less than RM100. With our wisdom we can “OWN” his 30 years experience for less than RM100 and 3 month. Imaging if you read 4 books per year, you have 120 years experience!! You are much better than any professor in town. So keep reading and accumulate more knowledge as this will bring you to greater height especially your own personal wisdom.
2. Courage
Courage mainly derived from your own personal motivation on how knowledgeable you are. The more knowledge you have the more courage you have in making good decision. Nothing comes free my dear friends. Learning from the book is the cheapest compare to real like mistake. In life, you cannot afford to make big financial mistakes. You should minimize it to the lowest knowing financial resources is very LIMITED.
3. Time
There is a lot of different between early 30’s investor compare to late 50’s investors. Time is the most crucial factor in property investment. The longer you drag the more disadvantages it will be and the less benefit you will enjoy. If you are starting early, you are not only enjoying longer loan tenure but also lower insurance premium. Last year after taking additional top up loan of RM150K, my monthly installment has rise from RM955 to RM1210 per month. After minus my management fees I still have another RM142 passive income per month. The beauty is I have cash out more than RM150K. After leveraging my time – “AGE”, I’m still OK with my cash flow!! But imaging if I’m 50 years old now, do you think I will be able to enjoy this?
4. People
People’s here refer to network. Who you should know? Who suppose to be your good friend? Please spend more with resourceful friend and stop wasting your valuable time. I just come back from outstation for training. I met my long loss friend which I didn’t contact for almost 13 years. I keep pursuing him to accumulate property for his future benefit. But his reason for not buying property is pretty simple that is “don’t know which bank’ can offer him the loan. In actual fact, he loss tremendously as the shop lot that he rented for running his own tuition centre has double in prices and yet he still blaming why his landlord keep increasing the rent. Indeed, his friend’s wife is one of the famous loan mortgager in town which is also my friend. So please look around and open your eyes wider and you must not forget opportunity is all around us at all time.
The combinations of all the prosperous financial and non-financial resources are the ultimate in wealth building. Of course for beginner you might only have non-financial resources, but at least it’s a good start. Remember WEALTH started with having RIGHT ATTITUDE & MIND. Please start somewhere somehow and make your 2010 the best year ever. PLEASE DON’T GIVE ME SAME REASON EVERY YEAR AGAIN FROM NOW ON. As we grow older, we learn and make fewer mistakes but if you keep making same mistake every year that mean you are really “below the clever people” in other words “DIPUTS”.
Celebration of Success
Here I would like to take this golden opportunity to wish all of you “GONG XI FA CHAI” and fruitful year of “TIGER” by building more aggressive yet solid portfolio that can bring more happiness into your life. Happy Investing.
You cannot Grow Land.. CK Wong & MY DAD
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{ 31 comments… read them below or add one }
Your blog is so resourceful and I like it very much especially the true story you are telling. It keep me inspired and is my target to follow. I made my first real estate (apartment) purchase 2 days ago at the age of 25 years old + 1 day in PJ.
I will be living at the master room and rent out the 2 other room hopefully it can be used to cover some of my installment so I can have more cash to buy next property.
Wow… another good share, CK Wong. Now, I’m accumulating my solid assets & especially non financial resources.
. Thank you.
“Gong Xi Fa Chai’ to you, CK and your family and to the other readers who are celebrating chinese new year.!!!
GONG XI FA CAI !!
CK,
Very good advices you have there, you sound like a book writer! May be one day you could write a book for the benefit of many Malaysians. Going back to the knowledge subject I always stop at a bookstore every time I pass by one. I have bought most of the books written by Malaysian / Singaporean authors such as Azizi Ali, Adam Khoo, etc. due to their perspectives can be directly applied to my situation. Many foreign authors wrote books but which to me they talk as if in theory only because it’s hard to appreciate them as I believe that earning a living in another lands can never be the exactly the same. Thus making a living and buying properties in America, Hongkong, Japan, etc. are different from Malaysia. How can it be the same when the forex rates, market values, the monetary values are all different. Azizi ended up wrting his books as he complained that he could find many good books on personal finance which talk in Malaysian perspective. I kind of agree with this.
I came to know your site from KC Lau, after I bought and read his book last year. I want to buy Azizi Ali’s book “millionaire landlords” something like that, but I had been to 4 different bookstores, somehow the book is not available. So much so, my reason to stop by at MPH or Times would be to look for that book.
To share with you, I had bought house last November at RM950k, it is my 2nd property, still have not moved in yet now, pending the S&P process…I hope this house will escalate in value for me…well why not? I am delighted to see the current advertised price of the same house is RM1.2million, goshhh, does it mean I have already made some profit even before I move in?? Wo…this encourages me further and really convinced that the property investment is indeed truly good….
CK, you endorsed properties as good investment in your blog…and to me it is something so clearcut….how I wish I am 25 again and I would have bought the apt just like Albert above. But better late than never as I would feel so itchy to buy another one soon? notwithstanding the one I have just bought has still not been handed over! LOL. My friends said to me, it’s like that one, when you have just bought, you feel like buying again…..
I noted what you said about cash, but I guess I am just an old fashion guy. My ideal would be having a RM1 million cash sitting on a FD or Amanah Saham that would give me a steady annual dividend. Let’s say at 8%, that would be RM80k per year. If I am to use the RM1 million cash as king, well then surely I can buy many more properties with the help of bank loans but being an old fashion guy, it would thrill me to have a RM1 million cash & some properties at the same time still working my butts for salaries! Robert Kiyosaki said go to work, earn some salaries but don’t forget to mind your own business!
Gong Xi Fa Cai!
HI,
Its good to hear that you start your second properties. I hope you will accumulate more rental portfolio as keeping too much cash is not the main game plan. Try diversify more into range of rental portfolio. Happy Investing and GONG XI FA CHAI.
You cannot Grow Land..CK Wong & MY DAD
Hi,
I have the same feeling like you. Feeling like to buy a house even I just bought one 3 days ago. LOL.
Hi,
You will be more like vampire thirsty for BLOOD next few years. Happy to know your wealth will continue to grow at solid ground. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Getting passive income from your property portfolio is a sure “feel-good” entity. It is not just about money but rather about how the money is earned ie. in a passive manner.
1.My in-laws are now living on the estate that father (expired) left behind for them. 1 shoplot and 5 small rented houses. The premises are constantly rented out for the last 20 years. That’s what kept them going despite having no active income.
2. My uncle had a shoplot in an established shopping mall, now rented out for 3k/mth. Uncle has since passed away last year but the rental income from the shoplot is still coming in. We are still thinking what to do with the money coming in each month.
3. Lastly, my dad left a SS/T corner house in Sec14 PJ, rented out like hot cake and we are still drawing a rental income from it.
3 very personal experience on the beauty of having properties as investment.
CK & those with experience,
I viewed an apartment in Likas thorugh an agent and now negotiating the price. This unit is tenanted but in bad shape : wall paper is peeling off (almost the whole house), toilets are dirty, laundry room is in a mess, kitchen look old & dirty. I offer the seller about RM20K less than what was advertised. He unwilling to let go. Now the ball is at my feet again… I try to get the agent to ask the owner how much is he willing to reduce. Do you think my negotiating skill is OK? I mean as a buyer of course I will ask for discount. I will not mention the area but it is a popular place. Easily rented out.
Should I just offer the buyer what he asked for or continue to play the bargaining game? I intend to rent out if I buy. I don’t want to rush into this. I try to view another unit advertised via another agent but the owner cannot be contacted.
Thanks for advice.
HI,
You can repair the unit easily but you cant get back the location. Same thing happen to The Peak last 5 year ago whenever people talk about it, they complain until the sun come down as the workmanship is damn poor..but today the condo commanding RM500 per sf which before that it was only sold for RM200psf. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
CK thanks for replying. I know u goin to say something like that. As a newbie in property, I come in with a common people mindset, to bargain for whatever which is deem expensive. Actually the buyer advertised for RM215K but RM190-200K is more comfortable for me. It is hard to communicate to the buyer through an agent. Feeling a bit discourage with the bumpy road ahead.
2 issues here.
1. should you buy a unit that is in bad shape?
2. who is the motivated buyer/ motivated seller?
Renesial leong did mention that once you had gave your counter offer, keep quiet, leave the place and see what happens. The first person to speak wil be the motivated buyer/seller.
On the other hand if, the price is still within your budget and at the market price range; you could also turn out to be the motivated buyer.
Internal furnishing, if not too severely damaged/ run down can be given a second chance for re-do. I bought an api2 unit 8 years ago that was dirty/run down/ neglected. Just took 5k to do up the whole place and now its constantly in demand.
Joe,
Thanks for your piece of advise. The unit is run down due to constantly renting out to ‘untidy’ tenant. And likely the owner did not bother to maintain it also.
In this case i think I am the motivated buyer. Still waiting for agent to reply. if it turn out too difficult a deal, i think I will try other popular place.
HI,
Do you all know what my colleague say when I bought my Api Api Apartment? CK, Why you buy the chicken house? I reply to them, that is GOLDEN CHICKEN. Who care how the GOLDEN CHICKEN look like right?The most important is the CHICKEN give you GOLD EGGS..Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Hi Redyoyo, i’m interested in run down properties, would u pass the agent phone to me if the deal is not going through? Thanks!
tat area 190-200k , not even owner want to sell. now is sellers’ market cuz there is a buying frenzy out there. so if GF/1F/or more strategic unit for 215k because not often available for sale, if it is not too much the premium, cuz by the time u get the property ie ~4 mths later, price might not even be 215k already unless there’s a dip, if u get my drift, at least, tht’s the current pattern seem to be showing. ofc, u can always wait for a sweeter deal ^^
Kurios & CK,
I am not in real estate & I did not major in economy during uni days. From what you mentioned Kurious, it sounds to me like it is the buyers themselves that push the market value higher. If the buyers are turn off by the price, then the place won’t appreciate that much. So can i say that it is the buyers’ fault? If property prices keep on rising, more & more ordinary people will not have enough money to buy… the rich (those already with property) will get richer and the poor will continue to rent (and lost the game).
As always minority(rich) set the rules and many of the thing is set in favour to richer people.. politics, business, and etc.
Rich people use poor people’s money to make more money but poor people work to make rich people richer.
Poor parent always say study hard work hard in future and you will earn a lot??!!
Rich parent will say study hard; work smart; earn smarter & lots.
Poor Dad; Rich Dad.
Hi,
The rules has never changes for the past few decade. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
neither did i : ) but studied economy for one semester
well, imo, its not buyers fault or anything but natural market forces.
yeah majority think no mmoney knot buy property, majority dont own prop yet , even me too that restrict me from buying land/bigger property cuz my intelligence in RE not there yet. i don hv the skill how to own sthg without money yet lol but i bet no chinese reader here willing to share their ‘chut chiu’ (aka secret weapon) on how to buy property w/o money LOL
actually ters another way of earning passive income also instead of just buy prop that is, write a book lol…write anything la…write how u meet ur gf n all that shit also can sell de…book write once only but can sell many time (ka-ching, ka-ching, ka-ching ) lol
Hi,
I agreed with you. Nowadays it take IDEA to make money. Money to make money is no longer the best tools. I remember there is one book published in US many years ago about “What man know about WOMEN”? The book content more than 100 pages and its EMPTY…yes EMPTY pages..the books was sold and rank top in the list for few years. So the conclusion is the man know NOTHING about women and its took IDEA to make money. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
CK,
wud like some advice fr u. SAY, if i m comfortable with investing n know what im doing, should i invest in :
both equally good tenancy demand
1) 3 apts ( 30k x3 =90 k) OR
2) 1 commercial (600k 15% = 90k)
hope my question is isnt inaccurate
i feel the commercial more ‘power’ lol…
3 apt rm900 each x3= 2.7k (3 tenants, slow appreciation, safer)
1 commercial rm3-5k (1 tenant, fast appreciation, alot of meat!, riskier (say, aeroplane drop on that mall, etc)
anythg else i miss out on comparisons?
wht wud ur explaination be 1) vs 2). thank.
Hi,
If you really loaded why not try vacant land. As I mention before to make real big money, vacant land is the main portfolio you should accumulate. Furthermore PLEASE READ all arctical I posted, I have constantly mention both portfolio pros and cons. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
That;s the point. I’m NOWHERE loaded. i’ve ‘read’ all ur articles since the inception. there’s one u mentioned if u hit jackpot even 20% of ur land portfolio is decent…giving me the impression, land deal not always kena de, of course.
with one’s limited resource such as me, land – no doubt the ultimate asset ultimate return, but is not the most attractive nor the most practical, AT LEAST FOR NOW (for me who just entered the job market, where to find cash) tht i still need to amass some other props first before goin to land
i guess im very conservative or wud u refute that, land buying has nthg to do with conservative? enlighten me haha
Hi,
Land is the best investment that I ever own. So its your own life, as at the end of the day you are responsible for your own life. I cant do anything and you dont need to give me 101 reasons why you canot own any properties. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
^ok i realised the figures r biased and inaccurate – even if same rental btw 1 n 2, but u get my point kan
Hi,
Another good article from CK Wong, As for property investment “Buy right not sell right” You can find many good advice from CK Wong previous article.
Happy Chinese New Year.
Give you another resource: Luck!
Yes, this plays a part in investment as well!
“For business owner, I continuously advise them to invest more into property rather than business.”
Tell that to Warren Buffet…..
Hi,
That why I always advise my business associate to invest more into properties rather than the business as the fact already shows return in property in general is much more comapre to business. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
For yer info
Warren Buffet is the richest dude in the world. Hes an investor in businesses…..
HI,
I know this many years ago. Happy Investing.
You cannot Grow Land.. CK Wong & MY DAD
Then you know your philosophy is in conflict with Warren’s?