Dec 20, 2010
I purchased my first property in year 1999 and second landed property, a double-storey link house in Puchong in year 2004 due to a job promotion/relocation to KL.
Last year, I invested one double-storey and one service apartment in Bandar Puteri and Puchong Jaya respectively. Almost all my investments are within Puchong and I am now considering disposing the double-storey house that I am staying at now to cash in and reinvest in commercial property.
I am looking at Bandar Puteri too, ground level 26’ x 70’ located in a multi-level car park. Could you please advise whether this is a good move?
1) Sell the existing house which can maybe sell for RM450,000
2) Invest RM1.1 million for a retail shop (ground floor of multi-level car park)
3) All investments are within Puchong, particularly in Bandar Puteri
Many thanks in advance and your valuable guidance is much appreciated.
First and foremost, congratulations on your property investment journey. Before I answer your question, I would need to know your investment strategy first. In your property portfolio, high-rise residential to landed residential, it indicates that you invest based on the deals and location of the property. Is that correct? What is your purpose of purchasing such properties in the first place? How are you assessing if the property is a good buy or not? Based on rental returns or capital appreciation?
I am not sure how to approach your questions as I do not know your strategies, but I will do so in the most holistic way possible.
1. Selling your existing house
– Question: what are the gains like? Are you selling at a loss or gain? Assuming that you gain, and it fetches good market value, why not?
2. Invest RM1.1 million in a retail shop of a multi-level car park
– Look into the price per square foot (psf). Are you getting a good price? Again, look at the psf for both capital gains and rental returns.
Couple of things that you need to know:
a) How are the surrounding properties? What’s the average price psf? For both sale and rent.
b) Why choose this retail space in Bandar Puteri? Who is your target market? Who will you rent to, and subsequently, who will be their customer base? If there is a crowd, only then, consider.
Bandar Puteri is a relatively new area. Office and retail mall concepts are relatively new. You might want to observe the trend to see if it picks up. Last thing you want to do is to invest your hard-earned money to become part of the developer’s research and development!
3. All investments are within Puchong, particularly Bandar Puteri
– This is where I compliment you. The one thing that people need to do is invest in areas that they are familiar with. Always start with an area closest to you, so that you know the area’s past, present and potential future developments, as well as target market, maturity and growth. You can start expanding on the area once you become a more confident investor.
Last but not least, always keep your feet on the ground when investing. You need to know your strategy, goals and direction. A good foundation in property investment supersedes all other facts when investing. I would suggest that you celebrate your “wins” in selling your house by putting some money aside for yourself and your loved ones. Perhaps the greatest investment you can do currently is to invest in getting yourself educated even more, if you have not done so already.
Michael Tan conducts property investment seminars and workshops throughout the year. For details, call +603 – 2283 1740 or visit www.freemen.com.my