Living in JB 3 (Johore)

[RedsYNWA]

when i was young, i took a car loan, only kept for 1 yr.
a bit older, i paid in full for e 2nd car, still driving it.

Car/credit card loans and investment properties loans are different mah....... After reading Brett's book, I regretted not loaning more. Could have bought another investment property if I had read his book earlier!

 

[gooddebt]

Car/credit card loans and investment properties loans are different mah....... After reading Brett's book, I regretted not loaning more. Could have bought another investment property if I had read his book earlier!

But if there is no good ppty out there, then no point to get more loan ? eg when properties are at all time high and likely to correct like SG now . May as well wait till the correct cycle then take a remortgage loan ?

 

[Valdez]

Japanese like to retire in Malaysia



Malaysia a big hit with Japanese retirees

11/11/2014 - 17:00*

KUALA LUMPUR: For Japanese who plan to spend their “golden years” or retirement overseas, Malaysia has emerged as their most popular country for long-haul stay for the last eight years.

According to the Japan Long-Stay Foundation Survey 2014, Malaysia has overtaken Thailand, Hawaii, Australia, New Zealand, the Philippines, Singa*pore, the US, Canada and Indonesia in descending order last year.

Tropical Lifestyle (MM2H) Sdn Bhd managing director Shatoro Ishihara tells FocusM that Australia and Hawaii used to be top favourites in the earlier years.

Malaysia remains the best country for long stay and investment as its cost of living is considered to be still quite cheap for the Japanese who wish to relocate here.

As one of the top 10 agents for the Malaysia My Second Home (MM2H) programme, he says his company does not just focus on the Japanese market but also handles the Chinese, European and Middle Eastern markets as well.

A number of them have retirees who have diversified their assets into Malaysia and made the country their investment destination while others have sought to look for a new lifestyle here.

Foreigners, especially from cold countries, find Malaysia’s warm weather throughout the year, which is often taken for granted by its citizens, appealing. They tend to make the country their second home during the winter months, Ishihara quips.

“The medical standard here is good,” adding that the country has some good hospitals with English and Japanese-speaking staff.

Security-wise, he says Malaysia is better when compared to the Philippines and Indonesia. The foreigners like it here as English is widely spoken besides being able to experience multi-cultures and a variety of tasty Malaysian cuisines.

“Unlike Japan, we are the extreme opposite. We are a homogeneous society versus the multi-racial society found in Malaysia.”

He says there is a strong presence of the Japanese community here. Besides the existence of a Japan Club, there is a proliferation of Daiso and Aeon outlets as well as Japanese restaurants nationwide.

Japan has been one of the top five participating countries in the MM2H programme since 2006. Cumulative figures from 2002 to August from the MM2H Centre shows China leading with 5,929 cases followed by others numbering 5,783 (see table).

Next comes Japan with 3,434 MM2H cases, Bangladesh (2,933) while the UK, including Northern Ireland, have 2,143 cases due to their strong historical links with Malaysia.

Ishihara says each “case” normally involves a couple and in some instances, include children as well. This means that there are more than 10,000 participants from China alone.

The figures as of August are reflective of the same descending order for the top four positions with China taking the lead with 1,004 cases.

 

[eric3417]

The biggest reason for these Jap to emigrate is Fukushima.

 

[potter]

Car/credit card loans and investment properties loans are different mah....... After reading Brett's book, I regretted not loaning more. Could have bought another investment property if I had read his book earlier!

Cash is king. Stress free.

 

[Manhattan]

Cash is king. Stress free.

There are 2 groups of buyers. One group is the opportunist, buying multiple and to flip when opportunity comes. The second group is the steady type, buy one and keep for rental or/and own use.
The first type will tend to take multiple loans. For the second type, the preference is to pay up early as the high interest being paid to the bank is really eroding your pocket at a astonishing rate and make the long term investment not so attractive.
My feel is most Singaporeans buying property in Johor belongs to second group, cause most of us are not gamblers and wants to sleep well.

 

[RedsYNWA]

But if there is no good ppty out there, then no point to get more loan ? eg when properties are at all time high and likely to correct like SG now . May as well wait till the correct cycle then take a remortgage loan ?

According to angmo expert, the correct thing to do is to remortgage while prices are at a high. Then, you have the spare cash to buy more when the cycle turns.

 

[RedsYNWA]

But if there is no good ppty out there, then no point to get more loan ? eg when properties are at all time high and likely to correct like SG now . May as well wait till the correct cycle then take a remortgage loan ?

According to angmo expert, the correct thing to do is to remortgage while prices are at a high. Then, you have the spare cash to buy more when the cycle turns.

 

[gooddebt]

According to angmo expert, the correct thing to do is to remortgage while prices are at a high. Then, you have the spare cash to buy more when the cycle turns.

The issue with his theory is what will happen if the cycle takes years to turn and you cannot rent out yr ppty . The interest will keep piling up . Not sound.

 

[RedsYNWA]

The issue with his theory is what will happen if the cycle takes years to turn and you cannot rent out yr ppty . The interest will keep piling up . Not sound.

Out of the re-mortaged cash, he advocates keeping 2 years of instalment payments to cater for unforeseen circumstances. As for the interest piling up, the front loaded nature of instalment payments means that the reduction in interest payment (due to higher cash payments) will not be significant, compared to the risk of default due to insufficient cash on hand.

In a nutshell, high cash high debt is paradoxically safer than low cash, low debt for property investors. It was a bit hard for me to reconcile initially, but after some re-thinking, I broadly agree with most of his ideas. Esp as the high debt would mean minimal tax expenses on net rental income. Otherwise for foreigners, net rental income is taxable at 26% in Malaysia (ignoring arguments on how easy it is to evade tax there...).

 

[gooddebt]

Out of the re-mortaged cash, he advocates keeping 2 years of instalment payments to cater for unforeseen circumstances. As for the interest piling up, the front loaded nature of instalment payments means that the reduction in interest payment (due to higher cash payments) will not be significant, compared to the risk of default due to insufficient cash on hand.

In a nutshell, high cash high debt is paradoxically safer than low cash, low debt for property investors. It was a bit hard for me to reconcile initially, but after some re-thinking, I broadly agree with most of his ideas. Esp as the high debt would mean minimal tax expenses on net rental income. Otherwise for foreigners, net rental income is taxable at 26% in Malaysia (ignoring arguments on how easy it is to evade tax there...).

Hi Reds,

Thanks for the reply. I dun quite understand what you mean by " the front loaded nature of instalment payments means that the reduction in interest payment (due to higher cash payments) will not be significant" ...

For MY case, if cannot rent out the pprty, no tax savings to speak of...

 

[RedsYNWA]

Hi Reds,

Thanks for the reply. I dun quite understand what you mean by " the front loaded nature of instalment payments means that the reduction in interest payment (due to higher cash payments) will not be significant" ...

For MY case, if cannot rent out the pprty, no tax savings to speak of...

Hi Bro Gooddebt,

Of course, if cannot rent out the property for prolonged period, then that is just poor foresight by the property investor. To illustrate the point on the interest front-load, let's assume one has bought a new double storey house for RM 700K using 80% loan over 30 years. The loan will be RM560K, with monthly interest of around RM 2,100 in the initial few years.

If one attempts to lower the monthly interest payable by putting in another RM200k, the loan is reduced to RM360K, but monthly interest still remains high at around RM 1,700. The investor is better off by using Rm140k (20% deposit) to buy another new house, with the RM60K as safety buffer.

When the property price rises in the next 5-10 years, due to the power of leverage, the investor reaps a higher return on his cash of RM340K (Rm200K + Rm140k), when he sells off both houses, compared to dumping in a higher down-payment & selling 1 house.

Of course, this is based on the assumption that the property is tenanted most of the time, with the mthly rent sufficient to cover the mthly interest. If not, perhaps the property is not worth investing in the 1st place.

http://www.amortization-calc.com/

 

[gooddebt]

Hi Bro Gooddebt,

Of course, if cannot rent out the property for prolonged period, then that is just poor foresight by the property investor. To illustrate the point on the interest front-load, let's assume one has bought a new double storey house for RM 700K using 80% loan over 30 years. The loan will be RM560K, with monthly interest of around RM 2,100 in the initial few years.

If one attempts to lower the monthly interest payable by putting in another RM200k, the loan is reduced to RM360K, but monthly interest still remains high at around RM 1,700. The investor is better off by using Rm140k (20% deposit) to buy another new house, with the RM60K as safety buffer.

When the property price rises in the next 5-10 years, due to the power of leverage, the investor reaps a higher return on his cash of RM340K (Rm200K + Rm140k), when he sells off both houses, compared to dumping in a higher down-payment & selling 1 house.

Of course, this is based on the assumption that the property is tenanted most of the time, with the mthly rent sufficient to cover the mthly interest. If not, perhaps the property is not worth investing in the 1st place.

http://www.amortization-calc.com/

Hi Bro Reds,

Thanks heaps for yr detailed explanation

Am thinking of ppties in MY which run a high chance of not being able to be rented out at an amt sufficient to cover interest due to the oversupply in the next few years. Think this theory only works in a bull mkt or the correct ppty cycle ...imagine if there is a major recession for more than 2 years and cannot rent out which is not unthinkable , then jialat liao

 

[eric3417]

Juz my 2cents. The Ang Mo experts had caused many in US to lose their houses & become Bankrupt.
Since 2007 till now yet to recover. Dunno how long it takes. Perhaps 2020? That's 13yrs!!!!!

Not to fathom the interest/inflation whatsoever during this difficult period.
It's a gamble to me. My risk appetite is not able digest such.
Thou I'm sure there're lucky & successful ones.

Cheers

 

[RedsYNWA]

Juz my 2cents. The Ang Mo experts had caused many in US to lose their houses & become Bankrupt.
Since 2007 till now yet to recover. Dunno how long it takes. Perhaps 2020? That's 13yrs!!!!!

Not to fathom the interest/inflation whatsoever during this difficult period.
It's a gamble to me. My risk appetite is not able digest such.
Thou I'm sure there're lucky & successful ones.

Cheers

It's true that UK and USA lending practices were too lax, and the banks had not properly considered lenders' earning capability. That's 1 of the main reason for the asset bubble to burst, since Tom, Dick, Harry were able to easily own 5-7 properties.

That said, it doesn't mean that their theories totally CMI. Some of their theories, esp on tax minimization, max loan max cash holdings to minimize default risk,
holding property through 10-15 years cycle (re-mortgaging when the opportunity rises), buying in established areas, are actually quite sound.

In fact, I will be restructuring some of my loans, based on some pointers raised in the book.

 

[potter]

It's true that UK and USA lending practices were too lax, and the banks had not properly considered lenders' earning capability. That's 1 of the main reason for the asset bubble to burst, since Tom, Dick, Harry were able to easily own 5-7 properties.

That said, it doesn't mean that their theories totally CMI. Some of their theories, esp on tax minimization, max loan max cash holdings to minimize default risk,
holding property through 10-15 years cycle (re-mortgaging when the opportunity rises), buying in established areas, are actually quite sound.

In fact, I will be restructuring some of my loans, based on some pointers raised in the book.

Bro, jio me if you are doing your refinancing. Use big one to secure the small one..dun know good bo.

 

[RedsYNWA]

Bro, jio me if you are doing your refinancing. Use big one to secure the small one..dun know good bo.

Haha ok sure Bro. I cant rem the terms of my 1st loan also. Just blur blur sign only..... need to dig out and recheck with Public Bank.... heheheh.......

 

[ctsbh]

Where is CSLONG and Relaxman?....

 

[ctsbh]

Hopefully the moderator finally WAKE UP..

 

[ctsbh]

The low traffic in these forum finally force the moderator to act. But bear in mind my fellow forumers, these WUQI is not a good guide.. Money count.