KUALA LUMPUR: KNOW your rental game plan in order to gain a solid source of income from renting.
This is the advice given by Superior Wealth Mastery managing partner Alan Poon, who had gone through the journey as a property buyer and who did not make a profit in his early days of property investing.
“My property journey is a case of hope, fear and joy, but most importantly, a never-ending journey which is worthy and profitable once you know how to play the game well.
“Looking back, I wouldn’t want to change any of those experiences that I’ve gone through, either good or bad.
“They were meant to be lessons that I had learned.
“It is important for landlords to ensure that they equip themselves with sufficient knowledge and know-how before renting out their units,” he said during the launch of the second MyRumah series, to be held in Komtar JBCC, Johor Baru, from May 5 to 7.
Poon added that without proper knowledge and understanding, the “profitable” venture could turn sideways and put the buyer in a difficult situation, such as defaulting on rental payments.
He said young investors could leverage on their age and borrowing capacity as banks were more prone to providing financing to younger borrowers, as they carried less risk and had longer borrowing tenure.
“What’s important is that without proper education and knowledge, investing in property may set you back for five to 10 years. Thus, if you truly treasure your time, do not wait to invest.
“I am not saying that you need to invest straight away, but you should quickly gather the information required to be a smart property investor, especially if time is on your side, as being young means having lots of leverage capability.
“And, what would be wiser than grabbing opportunities with lower entry but high yields,” he said.
Poon, who also launched three books on investing in real estate this year, said that at the upcoming MyRumah Property Showcase, he would also share his experiences in acquiring properties from auctions, which are usually 30 per cent lower than market value.
“After buying a piece of property for below market value, I did some basic renovation and furnishings. Then, I rented them to students, which gave 13 per cent return per year.
“For the first time ever, I received positive cash flow from my investment. This boosted my confidence, and I kept moving forward.
“From 2009 to 2012, I refinanced my existing house and used the money to buy auction properties.
“Even though I have sold some of those properties for immediate profit, I still received returns of between 16 and 20 per cent per annum, as well as over 100 per cent capital gains for the properties that I kept unsold,” he said.