Iskandar -- Now is the time to invest in or it's overhyped?

[sgcount]

Oh, thanks for the very useful details..

The method of loan repayment sounds interesting as I've not heard it before here. Not sure if I get it clear... So you mean, for eg, I loan from the bank RM600k. Then say I've paid principal sum RM100k. Loan amount reduced to RM500k. Next time, I need some money, I can still withdraw out it from the RM100k that I've paid?

I think point (3) you mentioned is more of my case. Must accept the interest for a few years. (In fact, mine has no DIBS.) Until I can really find tenant. Provided I can! If for some time cannot, that's the siong part.

yes, indeed. the interest payments all add up. To save on interest, pay up as much as possible. the good thing about bank loans in m'sia is that whatever principal paid up not only will not attract interest, but you may actually re-draw out the amount paid up as and when you need it. Simplistically, what this means is that you can use the loan facility as a piggy bank or savings account that "earns" you whatever the prevailing interest. In fact, i intend to do just that.
Risks: further continued long term weakening of the RM. But that normally means your house value will go up more.

In summary, I think we have three options in terms of loan repayment:
1) If you intend to own stay or use for long term, or pretty confident of keeping the property, pay up as much as possible to reduce interest payment. But don't need to pay off all. Keep the loan running but pay minimum interest. My banker told me "can pay 99% also can". What does that mean? Don't close out the loan facility, just don't pay interest. Anytime you need money (or when loan is almost 100% paid), just redraw some from the principal paid. I think this way is better than paying off everything cash as you keep your property value liquid.
2) If those who confident of selling off on VP ('flipping') just pay the deposit and try to sell off when get keys. In this case, just take the interest hit until property is sold
3) those who unsure of keeping or selling (but not own stay "yet")- take the interest hit for a few years before deciding how to proceed. Try to rent out just to cover all or partially the interest (at least).

 

[Niucomer]

Oh, thanks for the very useful details..

The method of loan repayment sounds interesting as I've not heard it before here. Not sure if I get it clear... So you mean, for eg, I loan from the bank RM600k. Then say I've paid principal sum RM100k. Loan amount reduced to RM500k. Next time, I need some money, I can still withdraw out it from the RM100k that I've paid?

1. Yes your description above is correct. There is an administrative fee when you re-draw. The fee can either be a one time charge of aoundRM50 per withdrawal or an annual fee of a higher amount (I am not sure how much) for unlimited withdrawals.

2. It is important you sure your advance capital repayment of RM100,000 is banked into the correct bank account. In addition to your housing loan account number, most (if not all) banks require that you open a loan servicing account so that you can maintain a balance in this account to service the housing loan. If your advance capital repayment is banked into this loan servicing account, then it will not go towards loan reduction and it will not reduce the interest. It would just sit there (in your loan servicing account) for the monthly installment deductions. The worst part is that some banks do not allow this amount in the loan servicing account to be re-drawn out. I hear (I may be wrong) even you go and cry father cry mother also no use.

3. By making a capital repayment, the monthly installment amount remains the same. The interest component within the monthly installment will reduce and the capital repayment component will increase. However if you re-structure the loan repayment terms and reduce the monthly installment amount, then you may not (depending how you re-structure) be able to re-draw the RM100,000 you had repaid earlier. This is because the revised reduce monthly installment is based on the new reduced loan outstanding.

4. If you do not re-structure your monthly loan repayment amount and continue with the original monthly repayment amounts, you will also have to ensure that your balance outstanding repayments can still exceed the lock in period. Otherwise the penalty of early redemption (usually 3 or 4 % of the original loan quantum) kicks in. That is why it is not really possible to repay up to 99% and have an 'almost interest-free' loan. Even you constantly re-draw on your initial advance repayment to ensure sufficient outstanding loan, you will still need to pay the administrative fee, not to mention the need for constant monitoring of the matter.

5. Not all banks offer the re-draw facility so you need to check before you sign.

6. If you already have excess funds in Ringgit, it makes good sense to reduce your loan costing you say 4.5 - 5% pa than to keep it in Ringgit fixed deposits earning you say 3.0 - 3.5% pa. If you hold SGD (current opportunity cost of 0.5%), you then need to decide on the direction of the SGD in relation to MYR. If you expect the Ringgit to fall more than say 5% per annum, you might wish to just keep your funds in SGD. For your information, some Malaysian banks (usually the overseas ones) offer SGD accounts which cost almost nothing to maintain.

7. Hope I did not confuse. Cheers.

 

[Frodo]

http://www.dbs.com/insights/conference/2013/SectorBriefing01_IskandarMalaysia.pdf

Interesting read. Prices are all going north. Whether you can sell off your property easily is questionable, but there's no question that when it comes to buying you have to cough up more money than ever.

http://www.straitstimes.com/the-big...ndar-home-prices-surge-demand-spikes-20130813

 

[freekazoid]

Cyberjaya does not have an aggressively expanding neighbour like Iskandar. Iskandar to me now is an extension of Singapore, which will be bursting at its seams by 2030. Even underground masterplan cannot save it, as experts have warned of the huge developmental costs. Iskandar is the logical choice.

Like this best...buy Iskandar (especially Nusajaya) is buy Singapore spillover for now...and only logistically possible Singapore alternative in not too distance future.

If you believe Singapore will grow and prosper next 20yrs....Iskandar will be dragged along. Likewise, if you believe Iskandar not going to do so well...it does translate to Singapore in long term...no good also? That's an outrageous thought isn't it.

 

[FHBH12]

Like this best...buy Iskandar (especially Nusajaya) is buy Singapore spillover for now...and only logistically possible Singapore alternative in not too distance future.

If you believe Singapore will grow and prosper next 20yrs....Iskandar will be dragged along. Likewise, if you believe Iskandar not going to do so well...it does translate to Singapore in long term...no good also? That's an outrageous thought isn't it.

Singapore is desperate enough to explore underground city now. I'm sure the government is now reviewing the laws, especially freehold ones, on the implication. Iskandar will prosper along with Singapore is a given. I'm renovating my Singapore house now and most workers are Malaysians and foreigners. With greater demand for goods and services in future, naturally more workers and products will come from Iskandar.

 

[sunriver]

shctaw: Tried to but really feel painful ...

The interest rate cycle is turning up worldwide as the Fed is tapering its QE program, with weaker emerging markets suffering the most. Already India & Indonesia are affected, with their currencies depreciating and domestic interest rates rising. Next weakest among Asian emerging markets are Thailand and Malaysia. Anyone taking up loans now should build in lots of buffer for higher interest rates.

 

[Niucomer]

to be fair to malaysian property .. most of my family, relative and friedns all make money from property over the years. this is true, i swear not making it up. the only one good friend who lost money is a commercial prop and because of change of road/zone planning by authorities. as house price generally move up (inflation, currency dropping, etc), unless one buys a complete dud or developer run road, eventually can get profit. you can't compare rentals with singapore - singapore is so congested and easy to get a tenant. the one caveat i may want to add to the above, most of them did buy from developers (ie first hand, off plan) and they hold for medium to long term. tenants, sometimes we do have to wait a long time. and disposal too. but things eventually turn out ok.

It really depends which points of the cycle one gets in and out.

2008/2009 was indeed a low point. Where are we know? Who knows.

Maybe we can make a guarded assessment by looking at what people around us are feeling.

 

[Frodo]

http://www.nst.com.my/nation/general/third-bridge-to-singapore-proposed-1.352812

Building a causeway link in the East would draw the heat from the West. Properties in the East will see prices appreciate very fast if the announcement is made to go ahead. I only hope it's not at the Desaru side, too far East lah.:p

 

[1nottiboy]

I am going to write on this thread from an investor's POV - mine actually. It whatever investment I make, I need to be sure of my property rights. e.g. if I buy a piece of land and there are squatters on it and I can't chase them away or the police cant effectively keep them away then that piece of land is not mine. or if I stay in a unit next to the sultan but his body guards prevents me from inviting ktv gals in then, IMO, that apartment is worthless. these are some lousy examples that I am raising but I think most get the idea. LKY was right when he says that they can take it away "at a stroke of a pen". Protection of property rights is most important. what you cannot protect is not yours. this applies to everything - including your car, your watch and your woman or in some cases women. So does Malaysia provide the average investor with adequate property rights protection. Currently from the looks of it, I would say that the answer is YES! is the protection as safe as Singapore? Probably not. I would probably rank Malaysia after Thailand. But that's just me.

Next - what kind of returns does Iskandar offer? In all my investments, I believe in literally doing the ground work. i.e. you go on site, check on the soil quality, look at the surroundings, look at the neighbours, look at the infrastructure, study the demographics, understand the political situation, global money flows and interest rates, etc, etc. When it comes to property, I do not believe in being an armchair quarterback/keyboard warrior. Cos usually the investment amounts are rather significant. So my POV is, anything north of Taman Sentosa will enjoy slower rates of growth. I have said before that most Singaporeans prefer staying and shopping closer to the border. Of course there will be Singaporeans who venture further than the rest, but these are the outliers. There are Singaporeans living in Romania but you don't see me investing there.

So where to buy? JB Sentral is good. I am quite surprised at the vibrancy of JB Sentral. There is a lot of business activity going on. A lot of human traffic. Even with the growth of Nusajaya, human traffic did not seem to have been diverted. If they can get the synergy going between the few buildings surrounding City Square, it should be a very fun place to be.

Bukit Indah looks good too. Again, there is a lot of business activity. The restaurants while not full on weekdays, seem to get by. New ones are still springing up. The clean massage parlours are quite fully booked. Business is so good that they are beginning to "eat" my time. Avoid the SOB Wan Jia next to Giant. knn... also "eat" my time. pay for 60 mins but get only 45 mins of real massage. And the dirty ones seem busy too. The gals don't sms me to solicit my business. it seems they have their hands full, literally. this is a growth area. how fast? I dunno. I dun have a crystal ball. but for the long run (10 years) this place looks good.

so which is a better investment? well, it depends on your risk appetite. the way I see it, Nusajaya is a place for self stay - families. everything is more spacious and friendlier. I can see myself spending time there cos while I could get the same massage in Zone A, but after I am done with whatever work I have to do in Zone A, I would drive all the way to Zone B to get my fix - food and massages. upside would be slow but downside is limited since most ppl bought cheap and the early investors would have holding power and not likely to dump.

As for JB Sentral, I can visualise it in my head. stay in a condo, walk to CIQ, go to work in SG and at night just do the reverse. while not the lifestyle I envision for myself, I can see other ppl doing it. I might do it if I were single and still young. why not? it's the perfect lifestyle. Good food, amenities, entertainment, all within the block. Car not needed at all. Best of all, for investors, I see a relatively good rental market for the area. Prof is rite to be looking at this area for investment. For a punter (not that prof is a punter. I am saying "for a punter".), this place would probably record the fastest growth. Personally, I wouldn't buy this place cos I don't like the area. It is too messy for me. but its a personal choice. don't let my personal preference affect your business decision.

Medini. check out my previous postings. but in a nutshell, Medini is for the long haul. similar to Nusajaya.

next, interest rates. Investing in Iskandar is NOT FOR THE AVERAGE HDB FOLK. note that the key word is INVESTING. 80% financing at 4%+ financing is no laughing matter. borrowing 50k at 4% p.a. and borrowing 500k at 4%p.a. are very different matters. sometimes, ppl get caught up in all the hype and all they see is the 4% interest but not the 500k principal. a little leveraging is good. I am a huge believer in leveraging. without leveraging, I wouldn't be what I am today. but for heaven's sake, leverage within your means and according to your risk profile. I married late and had my child late so I was leveraged to the max until my early 30s, cos I had very little to lose and I could eat fishball noodle everyday. But now that I am married with a child and possibly more on the way, I cant make my family eat $2 fishball noodle everyday. my borrowings are down by half and would probably be down another quarter by end of next year. While making money is important, it is MOST IMPORTANT TO STAY ALIVE. if you stay alive, you live to fight another day.

so there you have it! my alcohol infused insights to investments in Iskandar. The potential upside is tremendous if they can get their act together. but that's a really big if. The Malaysian work culture and inefficiency is their biggest stumbling block. And to top it off, they have their Malay supremacy pride, which to me is pure rubbish; when you have money, you can have all the pride you want. when you have no money, you jolly well swallow your pride and work for it. unless of course, you have your private army or have nuclear bombs, but these too needs money...... so bottom line is, it all goes back to money.

some of the stuff I have typed down today are quite controversial so let the flaming begin. but whatever it is, I want all of us to make money and be happy. go ahead and use my views for reference, BUT PLEASE ALSO DO YOUR HOMEWORK!!!

 

[Jetstream]

http://www.nst.com.my/nation/general/third-bridge-to-singapore-proposed-1.352812

Building a causeway link in the East would draw the heat from the West. Properties in the East will see prices appreciate very fast if the announcement is made to go ahead. I only hope it's not at the Desaru side, too far East lah.:p

Agree, not too far east lah... Punggol to Pasir Gudang would be ideal...and this will partly answer the question whether and where in iskandar to invest!

 

[malpaso]

Oh, thanks for the very useful details..

The method of loan repayment sounds interesting as I've not heard it before here. Not sure if I get it clear... So you mean, for eg, I loan from the bank RM600k. Then say I've paid principal sum RM100k. Loan amount reduced to RM500k. Next time, I need some money, I can still withdraw out it from the RM100k that I've paid?

Yes, exactly. Loan 600K RM, say monthly repayment RM3000.

So you can (for example) put up lump sum 550K RM.

You can do so in three ways:
1) Capital repayment whole 550K. In this case, you will only pay interest on remainder 50k RM, the rest of the 3000RM (less the amount to repay the 50K RM capital) is to reduce the princinpal amount.
Anytime you can redraw out capital repayment - up to 550K RM of course. You will need to pay some admin costs, very little. i remember it's like 5-10RM per transaction or something?
2) Advance payment 550K (for example). In this case you are making advance payment and need not service the 3000RM for a tenure equal to the number of installments that the 550K will pay off. Each month payment date that lapses, the 3000RM will be locked in to reduce the payment. Same thing, this also save interest .
3) A mix of (1) and (2) above.

This loan plan is standard for property in m'sia, AFAIK. So you can ask your banker more questions if you finally buy one. But it's quite good. Unlike in Sgp, where one need to pay lawyer fees to do an equity loan.

 

[malpaso]

1. Yes your description above is correct. There is an administrative fee when you re-draw. The fee can either be a one time charge of aoundRM50 per withdrawal or an annual fee of a higher amount (I am not sure how much) for unlimited withdrawals.

2. It is important you sure your advance capital repayment of RM100,000 is banked into the correct bank account. In addition to your housing loan account number, most (if not all) banks require that you open a loan servicing account so that you can maintain a balance in this account to service the housing loan. If your advance capital repayment is banked into this loan servicing account, then it will not go towards loan reduction and it will not reduce the interest. It would just sit there (in your loan servicing account) for the monthly installment deductions. The worst part is that some banks do not allow this amount in the loan servicing account to be re-drawn out. I hear (I may be wrong) even you go and cry father cry mother also no use.

3. By making a capital repayment, the monthly installment amount remains the same. The interest component within the monthly installment will reduce and the capital repayment component will increase. However if you re-structure the loan repayment terms and reduce the monthly installment amount, then you may not (depending how you re-structure) be able to re-draw the RM100,000 you had repaid earlier. This is because the revised reduce monthly installment is based on the new reduced loan outstanding.

4. If you do not re-structure your monthly loan repayment amount and continue with the original monthly repayment amounts, you will also have to ensure that your balance outstanding repayments can still exceed the lock in period. Otherwise the penalty of early redemption (usually 3 or 4 % of the original loan quantum) kicks in. That is why it is not really possible to repay up to 99% and have an 'almost interest-free' loan. Even you constantly re-draw on your initial advance repayment to ensure sufficient outstanding loan, you will still need to pay the administrative fee, not to mention the need for constant monitoring of the matter.

5. Not all banks offer the re-draw facility so you need to check before you sign.

6. If you already have excess funds in Ringgit, it makes good sense to reduce your loan costing you say 4.5 - 5% pa than to keep it in Ringgit fixed deposits earning you say 3.0 - 3.5% pa. If you hold SGD (current opportunity cost of 0.5%), you then need to decide on the direction of the SGD in relation to MYR. If you expect the Ringgit to fall more than say 5% per annum, you might wish to just keep your funds in SGD. For your information, some Malaysian banks (usually the overseas ones) offer SGD accounts which cost almost nothing to maintain.

7. Hope I did not confuse. Cheers.

good description! not trying to flog a dead horse, but...

(4).. lock in 3 year, my VP 3 year. so technically, can pay off 99%. then every month redraw back an amount slightly higher than monthly repayment to keep it at 99% and "keep the loan facility alive". I think possible. Obviously though, the banker was just making an extreme example !

(5) all 3-4 banks i spoke to offer same facility terms re: redraw of capital repayment. so .. i assume its' pretty representative .

 

[sgcount]

Yes, exactly. Loan 600K RM, say monthly repayment RM3000.

Hey thanks malpaso. I didn't know this yet. Will find out more from Malaysian banker. But for me, I think when I do a lump sum capital repayment, I do not wish to withdraw it again next time. It's purely to reduce the loan quantum or shorten the loan tenure. So every month, the amount I have to pay will be less also.

What you have described will be good for people who are afraid last minute they need the money urgently. At least they have emergency funds to turn to.

 

[malpaso]

Hey thanks malpaso. I didn't know this yet. Will find out more from Malaysian banker. But for me, I think when I do a lump sum capital repayment, I do not wish to withdraw it again next time. It's purely to reduce the loan quantum or shorten the loan tenure. So every month, the amount I have to pay will be less also.

What you have described will be good for people who are afraid last minute they need the money urgently. At least they have emergency funds to turn to.

No, no.. don't think it works that way. The monthly repayment remains the same. But more of the monthly repayment will be used to reduce the principal amount, which cannot be withdrawn anymore. Your loan tenure will shorten indeed.

Example
600K RM principal, monthly 3000RM.
at the beginning, a big amount (say 2500) is for interest, only 500RM is to reduce the principal.
(I am lazy to calculate the interest, you may check with banker eventually if you buy).
So this 500RM that reduces the principal, you may no longer touch it. It's "locked in".

However, if say you capital repayment of 300K RM. hence your principal reduces to 300K.
Then you only pay interest on the remainder 300K principal- of (say) 1200 RM. Hence 1800RM of your 3K monthly repayment will be used to reduce principal.
Hence, now your principal is 300K - 1800 RM. and so on. You may redraw any part or all the 300K RM capital repayment, but not the 1800RM.
but your monthly is the same.
As niucomer said, you must refinance in order to change the monthly amount, in which case, new set of terms come in.

think about it as you're looking / deciding to buy or not. If you do a capital repayment, you can still access the money for emergencies. I think it's good.

 

[AktifSingh]

Bhai, the name Iskandar is a sanskrit name and is a possible invasion target of the great Hindustan. May I suggest an alternative name change of Ramlee to reflect the truly asian nature of the habitat? Namaste.

 

[sgcount]

next, interest rates. Investing in Iskandar is NOT FOR THE AVERAGE HDB FOLK. note that the key word is INVESTING. 80% financing at 4%+ financing is no laughing matter. borrowing 50k at 4% p.a. and borrowing 500k at 4%p.a. are very different matters. sometimes, ppl get caught up in all the hype and all they see is the 4% interest but not the 500k principal. a little leveraging is good. I am a huge believer in leveraging. without leveraging, I wouldn't be what I am today. but for heaven's sake, leverage within your means and according to your risk profile. I married late and had my child late so I was leveraged to the max until my early 30s, cos I had very little to lose and I could eat fishball noodle everyday. But now that I am married with a child and possibly more on the way, I cant make my family eat $2 fishball noodle everyday. my borrowings are down by half and would probably be down another quarter by end of next year. While making money is important, it is MOST IMPORTANT TO STAY ALIVE. if you stay alive, you live to fight another day.

so there you have it! my alcohol infused insights to investments in Iskandar. The potential upside is tremendous if they can get their act together. but that's a really big if. The Malaysian work culture and inefficiency is their biggest stumbling block. And to top it off, they have their Malay supremacy pride, which to me is pure rubbish; when you have money, you can have all the pride you want. when you have no money, you jolly well swallow your pride and work for it. unless of course, you have your private army or have nuclear bombs, but these too needs money...... so bottom line is, it all goes back to money.

Very very well said for the bank interest part. Finally, someone who said it out explicitly. I think many commoners who want to invest don't see the final interest amount. It's really no joke as what nottiboy has said. Just by looking at the 4%, one may think nothing of it. But you will see for the monthly loan repayment, 70% or more may be used to just pay off the interest. It's like you take 3 steps forward, you get pulled 2 steps back.

But then again, from the tone of the posts, I believe many here are seasoned investors and are not merely commoners. Many probably have a few hundred thousand to million $$ in cash. So they need not worry about the high interests as they can easily pay off the principal sum.

You said it correctly that Iskandar has potential upside, yes, I was also being told anything can happen in Malaysia. The danger is if we think JB is like Singapore in terms of efficiency and promises. It is not.

I also agree that leveraging is good. But that's provided one is confident enough that there will be enough returns to offset at least partially his hefty bank loan interests. I personally don't think chalking up a few hundred thousand $ in interests after 20 years is leveraging if there is a Big ? in whether one can milk the property for some cash, such as renting it out.

It probably makes a lot more sense if one buys a JB property to stay in it. There is much less risk compared to one who buys the property and chooses to solely rent out or sell it off one day. Gathering all the pros and cons, I would say unless you are a rich investor, buying for own stay, or have sufficient initial capital to embark on the ride, there are more risks involved than any potential upside. It's more for those with mid to high risk appetite. Rental opportunities may be zero, too little and there's a chance that the property may not be sold off next time. 20-30 years time is too long a time frame for anyone to predict what will happen.

1nottiboy, do you like ktv gals?

 

[sgcount]

Opps. sorry. I get it. Basically, I can't change the monthly repayment amount. In your eg, once I've decided to pay 3k monthly at the start, it will be that amount all the way, even if some time later, I do a lump sum capital repayment. If I want to change the monthly loan amount, a new refinancing must be done.

1. So after the lump sum capital repayment of 300k, since my monthly loan remains the same at 3k, my loan tenure will reduce right? Cos then it will be faster for me to clear off a smaller amount of remaining loan

2. This may sound silly... but whatever capital repayment I wish to do, in the eg, it's 300k, do I earn any interest from it assuming I don't withdraw it at all?

Thanks so much for the clarification.

No, no.. don't think it works that way. The monthly repayment remains the same. But more of the monthly repayment will be used to reduce the principal amount, which cannot be withdrawn anymore. Your loan tenure will shorten indeed.

Example
600K RM principal, monthly 3000RM.
at the beginning, a big amount (say 2500) is for interest, only 500RM is to reduce the principal.
(I am lazy to calculate the interest, you may check with banker eventually if you buy).
So this 500RM that reduces the principal, you may no longer touch it. It's "locked in".

However, if say you capital repayment of 300K RM. hence your principal reduces to 300K.
Then you only pay interest on the remainder 300K principal- of (say) 1200 RM. Hence 1800RM of your 3K monthly repayment will be used to reduce principal.
Hence, now your principal is 300K - 1800 RM. and so on. You may redraw any part or all the 300K RM capital repayment, but not the 1800RM.
but your monthly is the same.
As niucomer said, you must refinance in order to change the monthly amount, in which case, new set of terms come in.

think about it as you're looking / deciding to buy or not. If you do a capital repayment, you can still access the money for emergencies. I think it's good.

 

[ahhock24]

So, you have correctly pointed out that we have to take "future price" into account. But don't forget to "future price" the property too. All things being equal, when local income doubles, property prices will double correspondingly. We will be back to square one.

In conclusion, do I think income will double? Yes, but maybe in 20 years. Will the majority be able to afford RM1M property? Sure. But by then, RM1M property will only be PR1MA housing, and our RM800k condo investment will be worth RM4M! Hooray! ;D

Nope you will not be back to square one if you use today money to leverage on future price.

Yes, income will double, so as to everything else, so watch out.

So when will MY income be doubled?
2012 GDP per capita SG $60k, HK $50k, TW $40k, SK $30k & MY $15k. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
Among other things, to be a developed state by 2020/2025, MY say target the lower end at $30k GDP per capita.

How MY goes about achieving this:-
1. Infrastructure buildup.
2. Accelerating population growth.
3. Foreign investment.
4. SGP effect.
But none of the above will helps to double MY GDP fast enough to achieve the 2020/2025 goal.

The actual assistance will come from:-
4. Subsidy. If all current subsidy are removed, cost of everything (& indirectly income) will doubled. It is already happening starting with RON95.
5. TARP. To alleviate the cost of living, fastest way is to make $$$ cheap (indirectly income) for everyone. It is also happening already. If SGP dun counter by also printing $$$, RM will likely hit 1:4.6 (from 1:2.3)

So will MY income doubled by 2020/2025? Again depend on how intensely UMNO/Johor Sultan value achieving a developed state status, sometimes it is their face which is at stake

 

[alnine]

Very very well said for the bank interest part. Finally, someone who said it out explicitly. I think many commoners who want to invest don't see the final interest amount. It's really no joke as what nottiboy has said. Just by looking at the 4%, one may think nothing of it. 8But you will see for the monthly loan repayment, 70% or more may be used to just pay off the interest. It's like you take 3 steps forward, you get pulled 2 steps back.

But then again, from the tone of the posts, I believe many here are seasoned investors and are not merely commoners. Many probably have a few hundred thousand to million $$ in cash. So they need not worry about the high interests as they can easily pay off the principal sum.

You said it correctly that Iskandar has potential upside, yes, I was also being told anything can happen in Malaysia. The danger is if we think JB is like Singapore in terms of efficiency and promises. It is not.

I also agree that leveraging is good. But that's provided one is confident enough that there will be enough returns to offset at least partially his hefty bank loan interests. I personally don't think chalking up a few hundred thousand $ in interests after 20 years is leveraging if there is a Big ? in whether one can milk the property for some cash, such as renting it out.

It probably makes a lot more sense if one buys a JB property to stay in it. There is much less risk compared to one who buys the property and chooses to solely rent out or sell it off one day. Gathering all the pros and cons, I would say unless you are a rich investor, buying for own stay, or have sufficient initial capital to embark on the ride, there are more risks involved than any potential upside. It's more for those with mid to high risk appetite. Rental opportunities may be zero, too little and there's a chance that the property may not be sold off next time. 20-30 years time is too long a time frame for anyone to predict what will happen.

1nottiboy, do you like ktv gals?

The Iskandar story have to fly or else all investors will be in trouble. What is the probability educity, health resort ...... will fail ?

Will the security improve so that the rich will feel secure to go there ?

If the answers are on the positive side I believe the returns will be faster.

 

[Funniman]

Allow me to share some insight of loans we have in Malaysia.

There are semi flexible and fully flexible loans.
Semi flexible loans are the type which you can pay in excess to reduce your principle amount but to withdraw the excess amount, you need to apply and do the paperwork.

There are also fully flexible loans which you be issued a cheque book account together with a loan account. You deposit your excess amount into this current account and the interest would contra off from the loan amount. You can deposit full principle amount but need not close the loan account. If you need money, just write out a cheque against this current account as long as there's enough to cover your monthly installments. It is very flexible as it means that you can buy a second property without going through the hassle of applying for a second loan, of course provided your current account balance is high. You can pay in cash for the second property and carry on servicing the loan of the first property. Sounds confusing but it is my favorite loan arrangements...