September 27, 2009

My property investment story_continued

I have written 2 posts before on how I made my money through property investment. I neglected to finish that story and I am going to continue it as I consider the month of September has been a very good month for me with regard to property investment. I tweeted about it a few days a ago and people were interested. Saying it in 140 words are just too short of a story. Read my 1st posting and second posting.

In my second posting, I did say that I hated my first investment in term of value or I love it as a home. It is about the house I am currently residing in. I did read somewhere that one of the worse investment you can make is buying an expensive house which you are living in. This is in term of monetary value but not emotional value. It means that you spend so much money, then it does not give you any monetary value. I agree with this statement in some way but not all of it. It is even proven in my case. As a money churning investment, my house is a failure but as a place where I live with my wife and built a home, no money in the world can replace that. As human, that is more important to me than any monetary value it can give back to me. Coupled that with all the nice neighbours and the security of the place, I can't complain much.

As I mentioned in my second posting, I bought my current home with a 100% loan using a cooperative bank's housing loan. That cooperative bank called Bank Rakyat is more well-known for its personal loan but during that year, in 2004, it was celebrating its centennial and as my legal firm was one of its panel, we get to know beforehand how they were going to celebrate it. One of it is offering a 100% housing loan with all the fees which came with it fully sponsored by them. I took to 100% loan. One is to finance my house and one is to buy my first investment vehicle. As I managed to get both loan approved (business was really good that year), I consider that year as one of my investment year. The only bane is when I have to pay a monthly payment of RM1855-00 (USD530-00) for my RM255,555-55 house whilst my neighbour is paying only RM900-00 (USD260-00) per month. Big difference right?

If you have read my second posting on property investment, you will learn that in my housing estate, the price of houses did not go up. I have only managed to secure a refinancing package good enough to cover my current balance in my housing loan account this month after looking for one for nearly 6 months. The refinance package managed to lower down my monthly installment whilst being just enough to settle my balance of loan with the said cooperative loan. I thank Bank Rakyat for giving me a good start in life but it was not a good way to start off with such loan. Especially at a place where the price of the house does not rise like in my housing area. As Malaysia still has not suffered any sub-prime crisis or I am a person who shouldn't be given a loan as I am not capable of paying the loan (never miss my monthlies, yet), I think the problem is more in the lack of infrastructure within my housing area. If the developer of my housing estate, which I can talk about in a whole different posting altogether, would just build the infrastructure like school and shops faster, maybe we can experience the spillover effect.

To be continued...(this time on how I made my first good investment)


adahlan said...

where do u live kruel?

kruel74 said...

Adahlan - I live in a place call Bukit Bandaraya, just beside Taman Pertanian, Shah Alam

adahlan said...

What a coincidence! I have been to that housing area but it looks pretty new. There's so much greenery around that area.

It's rather unfortunate that Management of Bkt Cerakah doesnt allow ppl to bring their bicycle in the park.

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