between Azizi Ali and Renesial Leong - the reality

These two names has becomes so significant in Malaysian Real Estate Industry. Who are they? well a short brief, Azizi is a Billionaire Planet Founder who was an author to a series of business and how to be rich books, and Renesial has become a multinational property owner who wrote the series of property jewels books.

Those two are billionaires..i read their books apart from Robert Kiyosaki (again everybody lets be rich book) huh come on. everybody wants to be rich nowadays.. if you or your book want to be on the best sellers list make sure the title consist the word rich/secret/millionaire... its predictable.. sure HIT.. whatever it is, for me, being rich is not just money or material rich.. it has a deeper meaning.. skin deep...

Ok actually i wanted to compare between Azizi Ali and Renesial Leong. I am a landlord. (even though i am only managing my parents/grandmother/uncles/close friends houses) even though i am actually the property manager but but i still consider myself a landlord. The house owner just want me to hand them the rental every month without wanting to know any other things. Apparently i have become a non official landlord to so many houses simply because i am the one dealing  with the tenants and the properties.

It has been almost 3 years since i first begun renting out properties. All the property experts were right. 1st criteria to look for if  you are considering to invest in rental property are : 1st the LOCATION. 2nd DOMINATION and 3rd SYSTEM and you'll be a happy landlord.

I read through My Property My Jewel from Renesial and another one by Azizi Millionaire landlord, and i do read 3/4 of Robert Kiyosaki books trying to unveil his secret (but there is no secret actually).. those people are only concentrating on property that located in PRIME area that give 100% return but little that they know that not all property ownesr have property in KL or New York. I come from Penang, and i realized that most of the landlord trying so hard to increase their rental (by fully furnishing it or fully renovated the unit). They thought that they could be the next Renesial or Azizi by putting the extra effort, but the fact is they just couldn't.

Say, Miss A bought a house in some place near to a local college (which is a good buy). The cost of the house is RM100K, now we could even get 100% loan from the bank so they monthly repayment is around 500 (i take 4% per year for 30 years), the rental for that area is only RM300 and Miss A will end up with a negative cash flow of RM200 per month. This is bad but at least Miss A purchase a house in the year 2010. This is the reality OK? But.. what will happen in another 10 years, say in year 2020? do you think that Miss A will continue getting RM300 from rental? have you ever heard of value appreciation? Do you get what i am trying to say here? Ok next explanation.

I have a living evidence. My parents bought a house in Bayan Baru in 1978, just next to Bayan Lepas Free Trade Zone.. It was hard enough for my Dad because he had to sell his motorbike and cycle to work (Bayan Baru in the Island to Kepala Batas in the mainland about 40km by highway remind you there was only Kampung Road and ferry services back in 1978) he was quite lucky that he was a national cyclist and represent Malaysia for 1977 and 1979 Sea Games so he doesn't have to worry about people badmouthing him. Dad's salary was RM250, and he has to pay the house for RM195. my parents have to rent out one of the room for RM80 to make ends meet.. it was 33 years back. in 1980's my parents has been renting out the house for RM300, more than enough to pay their debt with some extra cash in hand. I remember in 1998 the rental had hike to RM700,.Now the same house is being rented out at RM1200 per month. Can you imagine the return that they get for investing to get the house in 1977? worth every effort.

But it is a very different scenario if you purchase the same house now. in 2011. and the latest selling price (the neighbor next to my parents house) is RM280K. but if you look at the ratio. Simple math, RM100K repayment RM500 monthly, RM200K repayment RM1000 monthly, RM280K repayment is more than RM1500. from here we immediately know that the selling price is a bit absurd, but there is still people who bought it. the owner has to wait for another 10 years in order to get a positive cash flow from his investment. the key word here is wait! but can u wait? Kimora Lee Simmons (the fashion moghul) use to say that time is money.. money is time... waste time waste money..

Well, I am in the middle of purchasing my 1st unit of house. It is nothing grand, just a flat with 2 bedrooms. Fall in love at the 1st sight. The price is affordable, the best thing about it. It is cheaper than buying a new Viva. and i could rent it out at least for RM300 per month! isn't that awesome?!! cheap houses does exist, you just have to look very hard. i'd love to quote Renesial she says something like, "it doesn't matter to look for 100 houses before you buy your 1st one that you like".. rather than not looking and end up in deep trouble.. (this is from me actually)  And i am eying for another unit, a terrace next to grandma's (which is now under my care). the selling price is a bit high. hubby is the only one can apply for loans, but he was quite reluctant because he fear that the house wont give us any positive cash flow (i should add yet).

Both Renesial and Azizi did agree on 1 thing, if you want capital appreciation get a landed property, if you are aiming for higher income from rental, go for flats or apartment. the next unit (no18) that i mention has a price tag of RM130K. well, hubby has to pay around RM600 but the rental rate now is only RM450 the most. I could push to RM500 if i dominate the whole row. but no matter how many units i'd owned, i will still be getting a negative cash flow but i did mention value appreciation earlier didn't i?.. the rental will comes up eventually..

Robert and Azizi mention about good debt. initially i was going to to pay my 1st unit in cold hard cash (god knows how hard to raise cash in such a short time (even though it is not as much).. i have to sell everything i got but suddenly i remember the experts advice regarding good debt. well i don't mind getting a loan to pay for my 1st house. the most important thing is, hubby agree to get a personal loan to process with the purchase. yay!!! it is going to give me a good return anyway.

Ok that's about it. Between Renesial and Azizi...Both have ideas, both have valid points, they talk through their experience but other people experience might not be the same as ours.. i am just giving my opinion based on my own experience; that i think more realistic to be applied in local non metropolitan property market. i'm more practical. i'm just like you.. i  think my points are more valid.. don't you think so?

all you need to know about your property management contract.

http://ezinearticles.com/?The-Property-Management-Contract---What-You-Need-to-Know&id=571543

Easy tips to choose reliable contractors

Idea, Design concept, sketch, blueprint and choosing of material. this is a very important element in a renovation. Wrongly done and you would suffer. I will cover this topic in other post because it is a very wide topic and people commonly make mistake choosing the wrong thing.

Above all, you have to choose a contractor to execute the renovation. They are the one who will let you know if your budget is enough or you need to hack your children education savings. One way to source for a good contractor is to ask your nearby hardware store for contacts. It did wonders. One day, i was looking for tiles at a tile shop and i asked the salesgirl if she knew any contractors that is good and she gave me several numbers. I called and the rest is history.

But you have to understand, contractors always wanted to get away doing things easily. they dont want to trouble themselves. You need to be firm with the choices of material. Sometimes contractor overlooked. they might be an expert in building things but you need to learn of the material that you want to choose say, for your kitchen tiles. I mentioned because i've been there, done that. Mistakes that cannot be undo. Tell you more in the next post.

My MIL (Mother in Law) build a house and lucky me to find out that the contractor FORGOT to install sanitary outlet in the toilet. In normal condition sanitary and plumbing need to be installed at the very first minute. I still remember my contractor rushing me for SHOP DRAWING when i was managing a big scale housing project back then. It simply means that they want a sketch of how the sanitary fixing is installed underneath the floor slab. Just imagine how it would be if i failed to notice the absent of the sanitary outlet? they have to hack the whole floor. That is going to be a nightmare. More unnessary additional job and apparently more money spent.

Another cheap way to make your house renovation a reality is to source for any 'expatriates' that is doing the job. I have  Bangladeshian renting in one of my flats, he has many friends in this line and he told me that i could call them anytime if i needed their help to lay cement, or tiles or erect a wall or do some painting. This second method is advisable if you have a good relationship with the hardware owner, you will get the construction material at 'contractor's price and you only need to pay RM50-RM70 per day per labourer. The cons is, you need to be a project manager and a project coordinator and a quatity surveyor to do this. If it is a huge renovation,just forget about it. hire a professional contractor instead, it will  save you lots of troubles and headaches.

Wrap up from this post:

1. Try to source for a contractor from a hardware store (the one buying most from them) OR

2. Try to source for a 'freelance' laborer that accept daily wages

3. Finalized on your design and choices of material