Exciting Durian Story

Land cannot be plant, cannot be reproduce or even grow!!! Like it or not we have no choice but to accept the fact that “we are getting less land” day by day. It makes our mother land getting more valuable every second. To invest in land, you require time and money. If you don’t have money to buy expensive land then you must at least have “time”. Time will be your main sources to turn your hard earn money into fruitful investment.

It’s has been proven again and again, land investment never fail to bear its fruit. Last week when I was at my hometown, my RiCH DAD told me that… it has been always an uptrend mode for land price even small town like Sarikei, Sarawak. I believe so as it does happen every way even small town or dead town like Kudat, Kota Belud or Kota Marudu also enjoying huge appreciation. Land nearby which I bought back in 2005 is asking for RM30K per acre!! Yes that is about 7 times @ 700% appreciated!!  

Land investment is not an easy game especially when you talk about big capital outflow and low potential of monthly income, normal investor normally will not touch this game. Of course some of you might say investment of land at big town area especially like Kota Kinabalu will enjoy fast growth. But my question is can you afford it? If you can afford it, of course this will be definitely best asset to keep among all others like shop lot, retails unit, and residential investment. Land price along high roadside will be the best to accumulate in view of smaller size of investment making it affordable and acceptable collateral by most of the bank as ‘residential or even commercial’ properties as well as enjoying residential loans benefit like longer loan tenure up to 30 years and lower interest rate like BLR-2.4%. The best would be you are enjoying commercial rental yield and potential upside is much higher especially when your tenant renovated your ‘residential’ unit into showroom or high end restaurant. The upside wave is stronger especially land next to main road along Jalan Tuaran, Jalan Likas, Kolombong Highway, Tuaran by pass, Menggatal,  Jalan Sembulan, Penampang, Lintas, Luyang and Inanam. Some of the owners are asking above RM180 psf!! Is that worth to invest? Personally I would say YES. Simply because if you have roadside bungalow of 0.25 acres @ 10890 sf, at RM180 psf you will get around RM1.96M and with additional construction cost of RM 1.2M to build 3 storey semi detach commercial building. This will total up RM 3.2M for both unit @ average of RM1.6M for each lot with land size of 4000sf and build up of 5000sf @ 1500sf per floor. So now my question is: Is this kind of deal consider worthwhile or expensive? Personally I think its worthwhile to consider in view of the location, high traffic area, easy access, bigger parking space, private parking and commanding better rental yield. Those big corporation and furniture companies would love to have such location. Look at Lorenzo furniture at Likas, they are renting the whole place for more than RM8K per month. They dump in more than RM200K in for refurbishment and uplift the image of the building which creates more value as a whole to the landlord. I understand from the owner he bought that unit for less than RM400K back in early 1990’s which now easily worth RM3M @ RM200psf.

As conclusion, land is still the best asset to keep over long term. Those who have time to wait, why not try accumulate some land portfolio as by the time you retire your investment should bearing plenty of fruits. That’s what I’m doing; building my land portfolio for my next generation and my rental portfolio is for my own retirement funding. As what I parents always teach me, my grandfather is planting durian me him to eat, and my father is planting for me to eat, and last I’m planting for my next generation to eat. Who stop planting in between will be the foolish among all the generations. Don’t make the flow / cycle stop…keep planting knowing you have eaten what your parent has plant for you. Happy Investing.

CK Wong & MY RiCH DAD

Related posts:

1. Another exciting year of 2011
2. Land Story Part 2
3. Land Story 4
4. Land Story 3
5. No Property Bubble in KK Part 1

Tagged as: Bungalow, Damai, Generation, Likas, Luyang, Portfolio, Rental Portfolio, Sembulan, Tg Aru