2019 Property market crashing? BUT SOMEONE's CASHING IN?
Updated: Mar 10, 2019
Some claimed that property market is crashing soon with so many unoccupied units. I don’t know to believe or not. I see quite a few property friends celebrating their success with new car purchase, new awards and recognition. Let’s see what our experts from various fields shared. Over the weekend (23-24th January 2019) I had the chance to learn from map maker, property consultant, real estate agent, strata specialist, economist, lawyer and drone flyer besides sharing my part on helping real estate professionals to generate leads with zero budget on Facebook.
Database maps, population count, land use analysis, ownership and transaction data: 3 Take-Home from Ishmael Ho, CEO of Ho Chin Soon Research
1) Digital maps are so powerful because it allows you to put layers onto layers and you can add in your own information. You can see the properties on a very specific location down to the coordinates, the owner of the property and even the age of the building!
This means property professionals can plot their strategy and know exactly who owns what and what time a certain building owners may need to relocate or refurbishing. How cool! I can see an army general strategizing and winning the battle. If I am company in specializing in painting old buildings, such information becomes truly precious!
Entrepreneurs, can you see the golden opportunity? If you get hold of these maps with a lot more information than what I briefly shared, you can be in the business of selling highly valuable data to businesses. I know like me, you would be thinking of Personal Data Protection Act. I quickly clarified with Ishmael and was told that such is public information. It is not legal when you collect data for a particular use and sell them to other parties. Sharing public information is legal as we are just compiling them.
2) Retailers would use maps before opening their branches to gauge the population. Example, a retailer like Cold Storage would want to know if the location has sufficient population to support its business if it were to open an outlet there. With property prices that are also already available (sold or rented) we can derive the population's income level to gauge their purchasing power to know the right client fit. This is any retailers' due diligence in my opinion given the very high cost of starting a retail outlet.
3) QGIS is a free open source geographic information system that you can use to create, edit and share geographical data, which me as a laymen call maps.
How to win quality listing every time by giving top notch service: 3 Take-Home from Eugene Lin, Barrister for 20 Years turned Real Estate Negotiator
Eugene's introduction by the event emcee and also the host Warrick got me laughing. He was doing Sales and Purchase Agreements (S&P) for property transactions during his legal days and he was paid RM2,500. When he saw how the real estate negotiators got paid multiple times more than him he "tak boleh tahan" (couldn't take it). He decided to venture into real estate. Today he has been running real estate agency for many years, and never looked back. He shared 10 reminders as he called it because the participants are all license holders and experienced property professionals.
1) "You talk, you lose. Just don't say anything! Fill up the papers and hold the pen and wait for your client for the next action or words", Eugene repeatedly entertained us with this same phrase and live demonstration too! This step will help you get a 50-50% of your client taking the pen and signing. Silence can be powerful and effective in a sales process after all. Good one!
2) One of the ten reminders was "Sell yourself". This is what I advocate all the time because a product is never unique. Someone else can also sell the same thing. Real estate negotiators must never meet a client empty handed. They should always be well prepared with brochures, documents and product knowledge etc.
3) The best must have been saved till the last as Eugene reminded everyone to ask for referrals upon closing a sale. This is nothing extraordinary but the strategy to do so was what wowed me. The process of asking a testimonial begins very early in the sales process. You will tell your prospect, "If you are happy with my service, can you please refer me to three of your friends?" That's the first time. Then along the process you would repeat this second time. When the deal is closed surely the client would remember the "Yes" he/she has said. This could be the third time you are asking over a period. At the initial stage he/she probably said yes because he did not think you would be closing the deal anyway. Now your happy client who signed the papers will very unlikely to reject you anymore after the first few initial "Yes". Remember to remind your client to inform his 3 referrals about you and give him time to do so at his/her leisure. Brillliant!
Greater KL, Corridors of Growth and Transformation of Klang Valley from 1990s till present: 3 Take-Home from Ho Chin Soon, Mapmaker and Chairman of Ho Chin Soon Research
What did I learn from Mr Ho Chin Soon, “Map King” of Malaysia?
If there is someone who knows our geographical location better than Waze, it must be Mr. Ho Chin Soon! He has spent the past thirty years drawing and producing maps and now a drone expert capturing photos from his “toy”!
Mr. Ho uses DJI Spark, weighing only about 300gram to take photographs. He then uses a free software Microsoft ICE to stitch images together. Ho Chin Soon Research started using drones 6 years ago, 2013. Most of the drones have Artificial Intelligence (AI). Mr. Ho asked if participants keen to learn how to fly a drone , 2 drones can accommodate about 8 pax. If you are interested you can WhatsApp him directly. He is known to publish his personal phone number in all talks!
I have asked if he’s not worried sharing his personal number to large groups. He replied, “I don’t owe anybody money, why should I be worried?” The three take away from Mr Ho were:
1) Should the High Speed Rail (HSR) be built Melaka will be part of Klang Valley and Batu Pahat will be part of Singapore. Not politically correct but logistically correct because Melaka will just be an hour away from Kuala Lumpur’s city center. Batu Pahat will just be an hour away from Singapore at most.
“If we can see the future we would have bought a land that is full of squatters. Example today in Bangsar South certain places are now developed into precious properties” – Ho Chin Soon
2) The Story of getting a large group of owners to agree to sell their land at Sungai Long Golf Club and Country Club was astonishing. It took them 15 years. The owners were all and it seemed impossible but somehow it happened. Who was the agent who managed to broker this deal? Apparently the agent brought the owners to the temple and found the “answer” from the temple and agreed to move. Oh, so agents can use religion or “God” as last resort it seems?
3) Mr Ho's zero budget WhatsApp Marketing Strategy was shared. There are 8,993 contacts in Mr Ho's WhatsApp Broadcast lists as of today, Sunday 24 February 2019. Compulsory step: Have the recipient save your number as a contact and send you a message first. “If you prefer not to reveal your name, tell me you are Donald Duck or Mickey Mouse and I will save your contact as such”. Don't send "Good Morning" messages or videos. Mr Ho demonstrated the number is his personal number by asking the audience to call him. He proved that he ONE person handles close to 9,000 contacts. One Whatsapp Broadcast list can have 256, so 10 means 2,560. You get the idea.
Managing and Understanding Tenancy in Malaysia: 3 things I learned from Hong Onn, Lawyer
The only female speaker for the event, the young energetic lawyer started by sharing it was only her second time speaking in public. After a few minutes I started to doubt that as I was so engaged. The crowd loved her! Here were three property related nuggets I received.
Tenancy versus Lease
1) While a legal document is crucial to protect a landlord, risk can be significantly reduced for the landlord. A fun fact that Hong Onn shared. The tenancy agreement is the ONLY document that protects the landlord and tenant as there is no tenancy agreement act yet. Residential Tenancy Act is being discussed now. There is not a "Standard Tenancy Agreement" because every agreement is supposed to cater for your needs.
This sounds like common sense but still we must be reminded. Every document signed means you understand and you agree to it. Don't sign until and unless you know clearly what you are signing. No brainer?
Have them fill up tenant application form so you know their profession and designation , conduct research, CTOS, Bankruptcy research, request for reference, conduct SSM search and conduct winding up search.
2) Protecting yourself as a tenant. Confirm landlord is the legal owner of the property from the Sales and Purchase Agreement or the Individual or Strata Title. If property has more than 1 owner, make all owners sign on the tenancy agreement.
3) Basic information that must be in the tenancy agreement. Full name passport/IC and address to be accurate. For companies ask for SSM cert. Include alternative address of your tenant, so if they disappear you can still locate them elsewhere.
Include type of house, address is accurate, specify unit number and specify exact portion that is rented out. If garden is not included, then mention that.
BONUS, Hong Onn’s talk was so interesting, so relatable that I had to include more than three points, OK?
Can landlord kick or lock tenant out? Long answer short, it is NO. You cannot regain your possession by yourself but getting a court order. If you change the padlock, you can be sued for trespassing or charged for unlawful detention. Worst case scenario. If you change the padlock and someone inside is ill and medical help could not be gotten, you can be sued for man slaughter. Or sued for business lost opportunity, passport is in the home, going to a business deal oversea but lock was changed. You can be sued for loss opportunity.
You can ask lawyer to file for a double rental claim. If you don't leave under the law I can claim double rental from you? Distress Act 1951 can help, to sell off tenant's belonging to pay for the rent but this does not terminate the agreement.
Can you suspend the water supply if tenant fail to pay rent. You can only if it is stated in your tenancy agreement. HAHA! If you are registered with the water works then you can, else you will need to communicate with the tenant if his/her name is registered with the water works.
If tenant pay rent late, can charge interest? Yes can but specify it in the agreement. Don't let them move in before they sign the agreement. Find an amicable solution, e.g. if owe 3 months rent, offer a discount of 2 month rent and let them move out peacefully.
Is AirBnB Legal?
It is not illegal, unclear law. Government has no law yet on this area. Sabah, AirBnB as been declared illegal by state government.
You can check with the management, you can be fined for RM200 per infringement by the property management.
Register Your Airbnb Business with Tourism, Arts and Culture, but strangely there is no place for them to go and register.
Do's and Dont's in Strata Property Management: Sr. Adzman Ariffin, Property Consultant and Strata Specialist
I first thought this would be a very boring talk, technical words like “Strata” makes me think of Roti Prata or Roti Planta. Have to attend lah, since Adzman is a friend.
Sr. Adzman’s talk turned exciting and crucial when it taught me how to grow my wealth through different property investment, not the typical buy low sell high. It was perfect for those who want to look to grow their wealth through property investment.
1) Consider buying REITs. EPF pays once a year. REIT pays out four times a year.
REIT is the safest investment, targeted towards safe and consistent returns.
Give you access at low cost and good ROI
Cheapest cost to own retail property
2) Factors to consider when buying property
- Objective of Purchase - New vs Subsale
- Population catchment
- Appropriate Concept and positioning (what kind of tenants/customers that you will be bringing to the mall)
- Tenure - Freehold and Leasehold
- Good location, access and visibility (some places are seen but difficult to access)
- Strong Concept and positioning
- Ample carpark and vehicular circulation
- Tenant mix and control
- Safety and security, in lift also can have "incidents"
- Good management. Expatriates prefer professional management companies compared to the committee
3) Criteria in Selecting Property
- Location, location, location. It is very important for retail, can see from front, side, far, etc. Feng Shui believers will not want sharp edges, pillars and beams. Which mall, which floor (ground floor is best normally but sometimes could be the units near anchor tenant. Toilets are the best anchor tenants LOL because people wait for family going to toilets)
- Commercial viability of location (customer base, popularity, attraction e.g. Cinema, accessibility but needs to be well managed as escalators lifts may not be functional, facilities)
- Sustainability. E.g. Event must be meaningful, KPOP where car park was filled up and young people came to scream and shout and left. Colouring contest is great as parents will wait and end up eating and drinking while waiting for kids.
- Saleability and Marketability.
- Long term attractions.
Ok, 3 points again is not enough so let me add few more points.
4) Upside when you look at strata property investments
- Higher capital appreciation if you can sustain the rental
- Rental Growth
- Easier collection of rental. Office and residential, when they don't pay it's harder to sell stuff off. Retail, you can sell their stocks.
- Higher return on investment
- Better maintenance and upkeep
- No need to furnish
- Better quality paying tenants (Some retailers pay higher rentals, e.g. optical or fashion shops, accessories as they have higher margins)
- Strata retail properties (Service and A&P Charge, deed of mutual covenants and house roles/by laws, dependent of strength of management)
- Bigger capital outlay
- Higher mortgage interest rates
- Higher cost of maintenance - insurance, assessment, etc.
- Occupancy rate
6) Story of an auction property. A friend wanted to buy a property for RM80K because market price is RM120K, very excited. However later he was so upset to find out that there is an outstanding maintenance charges of RM40K.
RM32.50 to get the Strata Management Title book in Popular and MPH Bookstore before 10% discount
7) The Do’s and Don’ts
- ...work out an investment strategy
- ...invest in strategic location
- ...study the concept, positioning and branding
- ...evaluate the financials
- ...zoom into well managed building
- ...invest if you do not understand the retail industry
- ...jump into projects by developers with no track record
- ...expect immediate/short term returns
- ...be a sentimental investor
- ...invest without an exit strategy
Malaysian Economy and the Property Market Key Trends, Challenges and Outlook 2019: Professor Yeah Kim Leng, Professor of Economics, Sunway University
The final speaker of the day was Professor Yeah! Oh yeah….I survived the two full day program. I saw many colourful and interesting graphs and charts on various economical data. I am glad I am out of the university or surely I would have failed Dr Yeah’s class! Sorry Dr. Yeah, if there’s one thing I want to learn from you, it would be how to produce such beautiful graphs.
Disclaimer: Everything shared above is based on my listening and absorption abilities, which definitely can improve. I shall not be held liable for any inaccuracies or information that you may have used for any decision making in your profession. (Did I learn fast from Hong Onn?)
Oh gosh, almost forgot one more person, myself! What did you miss? Since you could not make it, I thought there is no need to share anything with you. Then again, I still get cold Whatsapp messages and SMSes from real estate negotiators, aiyoh! Don’t bother me please? I got to share with you Lead Generation Strategies with Zero Budget Facebook Marketing so you can save some money and time mass blasting people and spare me from your messages.
Lead Generation Strategies with Zero Budget Facebook Marketing by Marcus Teoh, International Speaker, Facebook Marketing Trainer and Bestselling Author
1) Do you know how much money you could have made if you have used your Facebook account wiser? If you have 1,000 Facebook friends, do you have at least 10% buying or sending you customers? Most likely you don’t. Let’s just say out of 1,000 Facebook friends you have, 1% bought property last year. If 10 of them bought property but none bought from you, you can calculate how much you could have made. RM500K X 10 that’s RM5 Million!!! Why didn’t your friends buy from you? They either did not know what you are doing (because you kept such a low profile on Facebook, so they are checking out your competitors’ posts and ended up buying from them), did not like you as a person enough, did not trust you enough or did not remember you. Hence, please post on Facebook so your friends know what you do, give them a reason to like your posts and you, trust you more and remember you!
2) To generate maximum engagement on social media use the #MEMEPO formula. Below is an example.
3) One of the many winning tactics on Facebook marketing today is to master the story telling formula when posting.
If you would like to learn more, then here’s a chance this May 2019 but better register early.
1-Day Hands-On Workshop (20 pax)
Saturday, 25th May 2019
1 lunch, 1 morning 1 afternoon Tea/Coffee Break
Regular Price: RM899/pax
Early Bird (end 15 May): RM799/pax
Group of 3: RM699/pax Email email@example.com to register
Thank you Star Fish Training for having me and to all licensed real estate agents for attending!