This article is submitted by Michael Hiew
My introduction to property investment came about through a series of happenstance. It was early 2012 and I was on the cusp of expanding my business from a monthly trading publication to a full-fledged property magazine called Property Hunter.
During the three years of producing the trading post, I noticed the publication attracted a fair number of homebuyers, real estate agents, investors and other leading industry players. So the decision to venture into publishing a magazine focusing solely on properties was spurred by business capitalization and not personal interest in property investment.
At the same time, I had also decided it was time for me to have a place of my own. I was offered by a friend to buy a condominium at Alam Damai, Luyang, Kota Kinabalu, Sabah. It was 1,302 square foot unit with 3 bedrooms, 2+1 bathrooms and a car park that came with an RM430,000 price tag.
The property, then just two months from completion, was located close to where I worked and came highly recommended by my friend. I wasn’t worried about who the developer was or whether they had a good track record in the business. I didn’t even compare prices with other properties in the area or calculate the capital appreciation potential.
It was a necessity that needed to be taken care of and my gut instinct, based on trust and faith that I was making the right decision, took over.
The next step was to get the money to buy the said property. If starting a new magazine wasn’t already a big enough financial undertaking, buying a property at the same time tested the limits of my own conviction of what I was getting myself into.
My parents loaned me the money I needed for the downpayment and from then on, I had to live with the consequences of my decisions.
When Opportunity Knocks
Launching Property Hunter was the turning point in my life where my view on property changed from being a purchaser to an investor. Running the magazine became more than just closing advertisement deals or organizing property expos to keep it financially sustainable.
My clients who were the movers and shakers of the property industry became an invaluable source of information that taught me the subtleties of the industry, the forces that influence it for better or worse, and the opportunities it presented as a wealth generator.
It was an eye-opening experience I wish I had much earlier in life. But then perhaps I needed the two things – launching Property Hunter and buying my first property – to come together at the right time to open my mind to the possibility of property investment as a viable savings plan compared to just depositing my money in the bank.
Knowing what I know now, I would have to count myself lucky that my first property purchase worked out so well. I’ve gotten to know the property developer professionally since as a client and am assured of his credentials.
If luck had not been on my side and my first property purchase was a failure, would it have prevented me from pursuing my growing interest in property investment? I don’t think so. The way I see it, property investment is like any other business.
Once you see the potential and revenue you can derive from it, you will continue to work at it and build it up. You just need to be persistent to learn, differentiate and evaluate the risks and returns.
Taking it a step further
There is no argument that buying a property is one of the biggest decisions in a person’s life. But knowing what to do once the value of your property starts to appreciate can be an even bigger decision. Do you sell and make a profit? Or do you use your experience to build up your property portfolio?
My first property has appreciated from RM330 per square foot to RM600 per square foot within three years which would give me a tidy sum if ever I decide to sell. Coupled with my accumulated knowledge of property investment opportunities in Sabah, I was confident enough to purchase two more properties in 2014 and 2015 respectively.
Both properties were purchased direct from developers (Off-The-Plan) that I have come to trust. Ashton Tower Condominium by SCP Group and Casablanca by Kinsabina Group, a guarded and gated terrace house development with facilities, are both located in the Kolombong area which has established itself as a prime commercial hub with consistent growth in population and businesses.
When I bought my first property, it was to fulfill an immediate need to have a place to live. Now that I have acquired three properties, I can see the potential of securing my financial independence on a much larger scale in the future.
Plan your Investment
A lot has been said about properties in Sabah being over-priced and a detriment to first time home buyers. The fact remains that if you buy within your means or ability to raise enough funds independently to put up the first downpayment, you would be committed to making your investment work for you.
You just need to take that first step, and then keep going. Griping about high property prices is not going to lower it. Taking affirmative action to do due to diligence and making well-informed decisions is what makes the difference.
If I had not persevered and asked for help from my parents to purchase my first property, I would have missed out on a great learning experience and opportunity. Ignorance breeds fear but education breeds confidence so my advice to all the young people out there would be to learn as much as you can from the experts about property investment.
Create a support system to help you take that first step. Be confident enough in what you know and humble enough to seek advice when you need it.
I would consider myself a conservative investor and careful not to overextend my financial capability. My goal is to acquire three properties every five years and perhaps diversify my portfolio to include commercial and overseas properties. And of course, to expand my business interests as well to pad my bank account to achieve my property investment goals.
There is still a lot of property investment opportunities in Sabah and I believe that with the right approach to educating the public about sound financial planning, market appreciation, and decision making, it can be a great tool for wealth accumulation.
My elements of a good location
- The 3 A’s
- Accessibilities
- Amenities
- Attraction
2. Mature Neighbourhood
My Investment Beliefs
- Invest where the locals will buy, buy where the locals will stay
- Invest where the government is spending their money
- Invest in a young age group populated area where it will bring many more years of tax revenue and housing needs
- Never buy something that has GRR (Guarantee Rental Returns) because when something is too good to be true, it’s usually too good to be true. Good projects do not need GRR
- You don’t make money on what HAD happened, you make money on what WILL happen
- You make money with your MIND, if you see it, it’s already too late
Property Hunter is the largest property media network in East Malaysia. The company’s main focus is solely on property, which consists of a monthly publication (Property Hunter Magazine), and an interactive Property Hunter web portal, whereby the public can search for the latest properties available on the market and find trending news and upcoming events in Malaysia.
