Property.. Buy Buy Buy... Is it a Sure Sound Investment??

I love property investment.. And I can spend the whole teh tarik session just to talk about property investment rather than a cocky topic about sex scandal, politic and a mere talk cock.. Been residing in KL for almost 2 years and I did a simple study on how nifty the profits been made with selective strategic properties. In mid 2009, 3 properties came into my frame of mine after a thorough analysis namely Midfields by YTL at Sg Besi, The Endah Promenade by PJ Development at Sri Petaling and The Zest by Trinity Group at Kinrara. All are high end condo/ service apartment. The Midfields started with RM280k for a 1000+ sqft and now selling at RM400k plus. Endah Promenade with 3 rooms and size around 1000sqft started at RM246k and now selling at RM400k plus as well.. The Zest was a clear winner, at BK9 of Kinrara, selling at RM240k (at RM220 psqft) for 1200+sqft built up area unit, and now shoot at around RM440k+ for the same unit.. A nifty 100%++ appreciation. I must say, I am scratching my head now in dissapointment. Hahaha... The lesson.., if we intend to be a serious investor, belief is a key words, have a strong and handsome holding power, and once you think you wanna go after an analysis, have a courage to take a sound risk after considering affordability and pray for a nifty outcome.. Wish for a good luck 2011 year at my side... Amiiin...

Easy..????

Been a while not updating my blog.. :) too busy with all sort of 2011 planning.. Being in the ocean of corporate world, it needs a courage to keep going.. Anyway, gonna say something about one person which was instrumental in the success of my unit these few years. Not a day light all the time indeed, a sudden change in organization's objective made him move to the new challenge. As a result.. a change management event happened. The aftermath..., speculations, notorious -ve perceptions and strucked the morale to its lowest.. As a superior, I put my points very straight forward but yet, subtle.. Positive, keep move ahead, run out from the deepest side of change management haywire, push away all sort of negative input and blast, discharge all circle of concerns and build up an inner belief.., flexibility will pays and pave for betterment... Good luck dude...

Leveraging in Properties. Should We Go or Not..?

I have received many comments on my believe in properties acquisition leveraging by refinancing property.. The arguments are;
1. This was what western preach and belief, which lead them to recession in recent years;
2. The idea of mortgage paid by the tenant. How we know that there will be a demand in tenancy for any particular property we acquired?
3. Cash flow affected if no 2 not materialized as plan?

First and foremost, in any investment, no one could predict what will happened after it was made. Even Warren Buffet does not always hit the strike and jackpot. And the modest answer to the above arguments is, always look at your affordability, means debt and income ratio. Personally, I will make sure my debt to nett income ratio does not hit more than 40%, even though most of financial planner adviced to limit to 30% ratio. And not simply leveraging without looking at nett cashflow capabilities.

All in all, in current sophisticated market and with all resources, one may be able to predict and make a proper plan before acquiring any properties be it new properties or not. Location, historical tenancy demand, market price movement year on year, proximity to amenities and easy accessible etc are common key enablers before any decision made. Classic example, I always made a dummy advertisement in one of the popular selling/ renting website which is free. And from there I gauge the responds of potential tenant. Off course you have to be there physically to see and experience all the key enablers for making it a preferred choice for residents be in tenant or living for good. And you know what, the best way to look for acquiring properties are always auction properties.

Horrible Experience

So many times I've been travelling for business trip or leisure, but last week was my first time arriving KLIA from overseas. Kalau LCCT KLIA adalah 2, 3 kali. Selalu via Changi sebab aku dok kat JB previously. First time jetted off from KLIA when I was accompanying my wife to London en route to Manchester in 2006, but flying back was landed at Changi. So, complaint.. Once landed, cam biasa lah, dek kerana panas buntut dok long haul in cramped economy class, cepat2 nak blah out of aircraft fuselage. Within less than 15 minutes I was cleared from immigration, thanks to fast immigration kiosk.. good innovation from immigration department.. Waiting at luggage arrival belt.. After 15 minutes, then first luggage came.. waiting.. owh.. then the misery came.. the speed of the conveyor was damnn slow, more than 10 times it was suddenly stop for what ever reason. Then have to be interfered with ground staff. All the foreigners besides me dah merungut sighh sighh, shit, damn.. and all sort of kurang enak didengar words.. As Malaysian yang patriotic, bengang jugak kan.. As it means to Malaysian jugak.. All in all, aku tunggu lebih kurang 1 hour 33 minutes just to get my little luggage out.. Plus 15 minutes, Almost 2 hours just to cleared myself out of airport building after landed.. This is totally different from my experience in Changi, Taiwan, Narita, Pudong etc etc... In changi, it was cleared by less than 30 minutes including immigration clearance. Even tho fully loaded long haul flight.. So, I guess, MAB have to do something... Satellite terminal for arrival jauh giler dari main terminal.. and thts causing a havoc for luggage handling I guess especially for fully loaded flight.. anyway, pada aku tak kisah pun, but for most foreigners, this is something embarassing and mae them fed up.. particularly for those in hurry.. That's why they preferred via Changi rather than KLIA...

Recession - Part 2

Last Thursday morning, my mailbox abuzz with a shocked message, but predictable. It became a hot topic among my office colleagues and counterparts across the region. Amidst slowing grow across the continents, my company showed a fairly good result. Though the year on year revenue dropped significantly across business unit, it was still profitable. I fully understand the sheer pressure of BOD to embrace the recession ahead, anyway, it is a business. And business should be profitable. Interesting point from our CEO which base in the US quoted for the next course of action;

The justification:

The math is pretty straight forward. From a productivity standpoint, you’re supposed to reduce headcount on par with declining revenue. If you believe the environment isn’t going to improve, you should take a bigger cut to get in front of the problems. You can do the calculation, as easy as I can. We have about 100,000 people in our product businesses, with revenue down roughly 20%, and an environment that may not get any better in 2009.
I’ll be asked by investors, “Where’s the job action, where are you taking out this roughly, 20,000 positions?” Well, I don’t want to do that. When I look at XXX, I don’t see a structural problem of that magnitude. There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimization process. But at a company-wide level, I don’t believe a major workforce reduction is the best thing for XXX at this time.
I think we are fundamentally sound, and when the economy picks up, I want XXX to be strong, and to take share and to outgrow the market. I said it last quarter, my goal is to keep the muscle of this organization intact. But we do have to do something…because the numbers just don’t add up and we need to have the flexibility to make the right long-term investments for XXX.

Next, the action;

We have decided to further variablize our cost structure by reducing base pay and some benefits across XXX. My base pay will be reduced by 20 percent. The base pay of Executive Council members will be reduced by 15 percent. The base pay of other executives will be reduced by 10 percent. The base pay of all other exempt employees will be reduced by 5 percent. For non-exempt employees, base pay will be reduced by two-and-a-half percent. Additional efficiencies, including changes to the US 401(k) plan and the share ownership plan, will also be implemented. Of course, the implementation of all of these actions is subject to compliance with local laws and regulations. Follow-up communications will detail the timing and the plans in your location

Yes.., this is the first impact of recession. Pay cut.. It still ok, to be honest for most employees. Adjusting life means for 5% or 10% was not so difficult, but loosing job for most people is the hardest faith to bite. We may have a contigency plan ahead should the worst came, but for most people who did not have any options in their hand, things won't be easy... No job cut yet, but I am pretty sure, if the situation does not show any sign of improvement in near future, it surely will come... God bless us...

Recession

The gloomy economy... Every inches of soil around the globe at hardest hit, but, most analyst says, the worst not at bottom yet. Manufacturing industry, where I have been in for a decade was and will always at lowest end along this recession. How it affect us..? Easy.. Recession will weakened consumer spending, triggered retailer and distribution channel to slashed orders from manufacturer. No orders means no sales and no revenue. How to operate? How to pay workers..? Cut cost is the easiest way. Which cost? Obviously labour.. Long shut down, pay cut, voluntary separation scheme (VSS), retrenchment or worst scenario, closing plant operation. Closing plant operation will have a big big impact to the whole. Supply chain will be affected and thousands of job dissapeared.. What a cruel reality of recession......

Shoe String Traveller - Part 1

Everyone loves to travel... You know your next desirable destination, but the questions now is, budget, budget, budget.. I will tell you one by one some useful practical tips for savvy traveler or some people say, backpackers.. Ermm, backpackers in style.. :-) In part 1, I will tell you when you should travel and the secret of saving in flight ticket and on land transportation. And off course these are applicable to non-tour package, as to me, tour package is worth if you are travelling to the places like Cambodia, Vietnam, Philipine, Indonesia, some part of China or Indonesia as the public transport and accomodation qualities are less reliable.

First, basic point, travel at out of peak season. When..? Typically, out of major global festivities. Christmas, summer season, bank holidays, easter holidays - Avoid it. Anyway, majority hates to travel during Christmas which is within cold winter and during searing hot summer (Considering Europe and Western destination..) Spring is the best time. Nice weather and nice view.. Good for pictures as well..

Plan it ahead, way ahead, 6 months and above, let your boss know, let the whole world notice, block the date, apply on leave in advance and rest assured, you are in peace... :) Many benefits if you plan it ahead... way way ahead.. Obviously, you have more time to do research, make bookings and off course all at cheaper price..

Second, transportation.. Flight ticket, airport transfer and moving around to the planned places of interest will required almost half of the budget.. Let us look at how to get a cheap flight ticket.

The cheapest definitely by budget carrier. Hey, now you can travel to almost major Asian cities, ocenia (Australia) and London by Air Asia. I love Tony Fernandes very very much...!! Well, with only RM499 (about RM500++ nett including taxes) one way, you can travel to the UK. And what's more exciting??? Indeed...!! You have an opportunity to tour Europe at much much cheaper price with multiples cheap connections to Europe's budget carriers. To name a few likes UK household cheap airline - Ryan Air, Easy Jet, BMI and many more. Try and play in Ryan Air website from Stansted to any major Europe cities in any off peak season and your jaw might be dropped.. I did traveled from Liverpool John Lennon airport to Milan Bergamo airport (return flight) for just GBP19.99 nett only.. Don't believe it..??? Believe it...!!! In fact, flying to Dublin is free.. Folks.. it's FREE!! It is just a matter of traveling at the right time.. :)

Owh.. If you still want to travel in style.. via premium airline, you can, definitely can.., but still can save - browse to global airline ticketing website. Do not go by individual airline website.. Website like travelocity.com, airnet.co.uk, airgorillas ticketing are very useful. Try and error any desirable travel period to get return air ticket list, sort by cheapest to the most expensive. It will list down hundreds if not thousand of return flight with total nett cost.. I did my best deal when I traveled to the UK last year which cost me about RM2800 nett for return ticket to Manchester via Amsterdam. And it was a premium full service airline. To my liking, I love travelocity as it is more efficient and reliable. In fact there is a 24 hours cooling of period which we can change the itinerary. You cant do this via most individual airline website especially if you bought a super savvy deal or non flexi ticket which does not permit you to change the itinerary easily unless it is a full flex ticket.

Now you smile all the way as you get the cheapest flight ticket on planet. Yet.. you still have to think about airport transfer.. Definitely, with prudent planning will not cost you a bomb. Book ahead.. If you are traveling to advanced cities likes Hong Kong, European cities, Australian cities or any part of Japan, book online ahead.. Example, if you tour the Europe, get a bus/ train transfer.. Make sure your hotel will be close proximit to the central station where you will be disembarked. It's cheaper.. For instance, National Bus across UK offered a fare as low as GBP1 from Stansted airport to major UK cities likes Manchester and Birmingham if you book couples of month ahead. Avoid taking taxi as it is very expensive.

And lastly, getting around at the destination. Normally as backpackers, they are many ways. Just figure out which one is cheaper. I always consider 3 option ; first option, getting a daily or weekly unlimited pass for city bus services. But you have to know and plan properly places of interest you wish to visit. Loads of job prior to the trip, but hey, the traveling date will be 6 months ahead, and you have a luxury to browse around through internet first. At the flip side, this is the cheapest option. Second, by booking a hop on, hop off tour package. Not that expensive. A full daily tour around Milan city will cost you about 28 euro only, and you cover almost every interesting places. I will let you know in detail in part 2. Third option, by renting a car. This could be an interesting option. You have freedom, but advisable, you should rent a GPS and do some research of dos and don'ts while driving in the destination cities. Renting a small size car in the UK or Europe will only cost you about GBP/Euro15 per day excluding petrol expenses. Additional GBP/Euro 10 for GPS per day, and you are good to go. Owh, get the list of address and postcode of places of interest with you as well.. :) Normally I choose second or third option.

Nahh.., let's do some calculation for this... Example, tour destination (Liverpool, Manchester, Wales and Milan);

1. Return flight ticket (Singapore-Manchester-Singapore) Transit at Paris = RM2800 nett (by Air France

2. Train (Manchester Airport-Liverpool-Manchester Airport) - GBP13, RM71.50

3. Hop on/ off Tour at Liverpool (1 day) - GBP7, RM40

Driving to South Wales (1 day) and Manchester-Stoke on Trent(1 day)

4. Rental of Chevrolet Matiz (1000 cc), 2 days including GPS - GBP50, RM275

5. Petrol - GBP40, RM220

Milan Italy Tour (3 days, 2 night)

6. Return flight (Liverpool-Milan-Liverpool) by Ryan Air - GBP19.99, RM110

7. Return transfer by bus (Liverpool city-Liverpool airport-Liverpool city) - GBP5, RM27.5

8. Return transfer by bus (Airport-Milan-Airport) - Euro10, RM48

9. Tour at Milan hop on/off (1 day) - Euro28, RM134.40

10. Bergamo Italy hop on/ off (half day) - Euro14, RM67.20

Total Transportation cost - RM3793.60

(For 1 week travelling, places - Liverpool, Manchester, Stoke on Trent (England), South Wales (Wales), Milan, Bergamo (Italy)

Off course, if you are travelling via Air Asia to Stansted, the cost will be way cheaper, perhaps as low as typical RM1400 nett for return ticket inclusive of return transfer. Next, in part 2, I will share more on how to save in accomodations... :)