Avoid 3 Expensive Errors In Property Investment -By Azizi Ali

Sumber:Azizi Ali
Property investment has been a long and experienced wealth builder. Folks had built fortunes throughout the centuries by owning real estate. If it was true then, it is even more so today.

Yet at the same time, there are far too many people who fall into financial difficulties because they invested in real estate. I personally know of one of my own colleague who is up to his neck with debts because of property investment. When you sit down to think about it, isn’t it odd? The same investment that is making some folks rich is sending others to their doom! Although there are obviously many reasons leading to this situation, one glaring point is that the people who are making money know something that the others don’t. Now, while one do not have to have a PhD in properties to make money from it, it is also obvious that the more you know about it, the more money you will have.

Properties are also straight forward. The more properties you own, the wealthier you will be. As to why this is so, the reason is simple: a person who has financial difficulties will never come to the situation of owning five or more properties; he has enough problems even to own one! For a guy to own five or more properties, he has to know what he is doing and should be a master of his finances already. While there are always exceptions, that is the rule of thumb when it comes to properties.

Now, the three common errors folks make in property investment are (1) buying in the wrong location, (2) buying the wrong type of property, and (3) making decisions based on what happened in recent history. Unfortunately, all three errors are very costly, very expensive and also very demoralizing.

Buying in the wrong location

This is the fatal and yet, the most common error. Folks keep on buying properties in the wrong locations (for their purpose). The solution to this is simple – if you are buying for your own use and intend to stay there forever (or close to forever), then you can buy a property in a location where you like. This may be in your own kampong, town or orchard. But if you are buying a property for investment purposes, you have to buy where ‘others’ like. And the ‘others’ here have to be in the thousands, not one or ten or twenty individuals. You realize that you may be buying in a place where even you do not personally like. But as ‘personally liking’ is not a criteria for making money here, it should not be in the equation at all.

Buying the wrong type of property

This is the second most common error – buying the wrong type of property. They want rental income but they buy houses. They want capital gain but they buy apartments. In this case, the answer is the opposite. For example, if you are buying for rental purpose, there is only one answer – apartments. If you are buying for capital gain, then the answer is houses. In other words, buy the right property for the right reason of investing.

Making decisions based on what happened in recent years

The third and most common mistake is making decisions based on what happened in recent years. A lot of people think: prices have increased in the last three years so the trend will continue for the next three. This is a very dangerous type of thinking, especially in the rapidly changing environment of this new decade. What happened in the past five, ten or even twenty years may not be repeated in this decade. So, anyone who had based their investment decisions on recent history may soon be licking their wounds. There is a very real threat of prices going down in the near future. Add the very real possibility of interest rates shooting up, and you can see that it is a whole new ball game altogether. These latest challenges call for new and innovative answers.

Now that you know the three common errors folks make in property investment, you will be happy to know that I will be conducting my popular and #1 property seminar in Malaysia where I will elaborate on more errors that investors make and of course, their solutions. Further, I will also share strategies that will protect you from possible downturns in the market so you will sail on through smoothly regardless of the economy. For those who are unprepared, naive or greedy, they will suffer much pain when the upheaval begins. A lot of people will be unable to repay their mortgages and many of them will lose their money and also properties. I will guide you on what to do to protect yourself and yes, on how you can benefit and make huge gains from the fall.

As mentioned earlier, the more you know about property investment, the higher are your chances of making money from the investment. You will increase your profits, reduce your work and more importantly, reduce your errors drastically. When you consider that the cheapest property in Malaysia now is RM100,000, isn’t it worth investing a little bit of money to learn how to do it right? Remember that the knowledge will stay with you for life!

If you have not attended the program before, log on to our web-site, sign up for the program NOW and take advantage of the early bird offer.

Copyright © Azizi Ali 2010

Buying Cash or Taking Loan

Sumber:http://fortunesense.blogspot.com/2008/10/buying-cash-or-taking-loan.html
Imagine if you have cash to buy a property, will you buy it by cash or you will buy it using the banking property loan facility ?

Example: If you have RM 200000 cash on hand and is able to generate 4% return rate yearly, after 20 years you will have RM 438224.66.

If you take a loan with RM 200000 and loan interest rate is
– 7%, after 20 years the total payment is 372143.49,
– 8%, after 20 years the total payment is 401491.23
– 9%, after 20 years the total payment is 431868.46

From the calculation, it seems that it is wiser to put your cash in the investment tool that can generate 4% if your loan interest is 9% and below.

Updated section:

Part of the reader’s comment,

If i have RM 200k Cash earning 4% a year, and i have to pay monthly installment of RM 1,550.60 for 20 years for my housing loan (which charges me 7% interest a year), how much will i have afte 20 years?
What if my monthly installment is RM 1672.88 instead (at 8% rate, 20 years) ?

Lastly, what if my monthly installment is RM 1,799.45 instead (at 9% rate, 20 years) ?

The answer for all 3 questions above, is that your money won’t even last for 20 years!. Meaning, once your lump sum finishes, you still owe money to the bank!.

Conclusion: You’ll be better off paying off the bank if your investment rate is lesser than the interest charged by your loan. Simple as that!.

COMMENTS

U Lian // June 20, 2009 10:00 AM
Is the amt of return of 4% taken into consideration of inflation? What is the actual value of the money after 20 years?

Fortune Sense // June 20, 2009 12:54 PM
The 4 percent return rate does not consider the inflation rate but the total amount of investment after 20 years do consider the compound interest factor.

For both the total amount of investment and the total payment to the bank in this calculation do not take into the inflation factor.

The conclusion is judged by the face value after 20 years.

Do share your opinion on this.

cheongpeng // August 19, 2009 7:22 PM
The calculation is just theoretical. In practical, when purchasing property, u need to pay lawyer fees, stamp duty, maintenance fees, repair fees and others. This is just a rough guide.

For the example, the interest u earn if put in 4% investment is used to pay for bank interest. So…u r still the same. Unless the property increase in value. What happen if u made the wrong decision?

Fortune Sense // August 19, 2009 11:07 PM
Thanks for the input.

The calculation method is based on the assumption that the interest earned is being reinvested back into the investment that can generate the same 4% interest.

If the property value decrease or increase at the end of the loan period, the total payment at the end and the total investment value should be still the same as the amount being calculated.

Welcome to share your opinion on this.

Peter Lim Cheng Teik and Tan Shu-Yin // October 23, 2009 1:28 AM
I disagree with the calculation. When you take a loan, you have to pay monthly installments.

The monthly installments that you paid lost its opportunity to earn interest.

Thus, when you use a comparison of “total” interest you paid over a certain period of time, you’re assuming that there’s no opportunity cost during this period.

Infact, whether cash or loan is better simply depends on your inveestment return vs the interest charged. If your investment return is 4%, and loan is charging you 9%, then you’re better to pay off the loan.

Fortune Sense // October 24, 2009 1:23 AM
Hi Peter and Shu Yin

The calculation does not include the “opportunity cost” investment return rate :P.

It is good if a person is determined and self disciplined to invest consistently the amount as the housing loan installment amount into an investment product that can generate positive return rate for the housing loan period.

Another perspective is that with the cash on hand (example 200K in this case), when the “opportunity” comes the money could be invested into it in order to generate a better return rate.

Hopefully by knowing the risks associated with the strategy that we use and understanding what we are doing, it will minimize the probability of losing and increase the probability of winning in the investment strategy plan.

Welcome to share your opinion on this.

Peter Lim Cheng Teik and Tan Shu-Yin // October 27, 2009 12:19 AM
Let’s make a fairer comparison by assuming that the person does not use other “savings” to pay for his monthly installments, since i’m sure nobody is so dumb not to earn interest with their money.

If that person pays cash for his purchase, he won’t have a monthly installment. Fullstop!

However, if that person takes 200k loan, he have to pay monthly installment. Although he have RM 200k CASH in hand, how about the installments?.

Let’s be fair, in this case, and assume that he withdraws his “lump sum” of RM 200k to pay for his installments monthly.

The loan interest at 7% (yearly) translates to an interest payment of RM 1,167 on the 1st month. However, the interest you earned on your RM 200k at 4%, is only RM 667 on the 1st month!. That translates to a deficit. As time goes by, the deficit will be more.

Of course, you could assume that the person have “money” elsewhere to pay for the monthly installments (thus leaving the RM 200k intact to earn 4% compounding). If that is so, we could also do some funny assumption, like:

Take RM 200k loan, for 1 year, at 100% interest (super Ah Long). With this assumption, the total payment is only RM 323,989.85.

This being the case, does it mean that the above loan is better than 7% for 20 years?.

If it is so, let’s get “funnier” again.

This time, we’ll take RM 200k loan, for 200 years, at 1% interest per year.

With such loan, the total payment (over 200 years) is RM 462,667.40, which is the more “expensive” than the above 100% interest at 1 year, or even 9% interest at 20 years.

Obviously something is flawed, which is “Time Value of Money”.

Yet your calculation never factor in opportunity cost, which will lead this kind of “funny” decision making.

Fortune Sense // October 27, 2009 7:25 PM
Hi Peter and Shu Yin

Thanks for the input.

The calculation does not include the “opportunity cost” investment return rate :P.

The calculation method will be different if take into the consideration of the interest earned when use the monthly installment amount to invest.

Do take into the factors (time value of money, opportunity cost, consistent investment method, positive retun rate, risks and etc) that are relevant to the individual while making the decision in order for him/her to have the most benefit.

Happy Investing.

Peter Lim Cheng Teik and Tan Shu-Yin // October 27, 2009 11:46 PM
I think a better comparison is this:

If i have RM 200k Cash earning 4% a year, and i have to pay monthly installment of RM 1,550.60 for 20 years for my housing loan (which charges me 7% interest a year), how much will i have afte 20 years?

What if my monthly installment is RM 1672.88 instead (at 8% rate, 20 years) ?

Lastly, what if my monthly installment is RM 1,799.45 instead (at 9% rate, 20 years) ?

The answer for all 3 questions above, is that your money won’t even last for 20 years!. Meaning, once your lump sum finishes, you still owe money to the bank!.

Conclusion: You’ll be better off paying off the bank if your investment rate is lesser than the interest charged by your loan. Simple as that!.

People who knows a bit, try to complicate matters to the public. People who knows a lot, try to simplify the complicate stuff. Housing loan vs investment return is as simple as it can get.

I would appreciate if the matter is not to confuse or misleading people.

I believe many people read your blog, and from your “article”, people might get a misleading conclusion.

While i truly advocate taking housing loan instead of paying cash, i’m very clear of the reason (which is OBVIOUSLY my investment return is better than the housing loan rate, by a wide margin!).

Fortune Sense // October 28, 2009 8:38 PM
Thanks for the input. 😛

Agreed with investment return rate needs to be higher than the loan rate and keep it simple.

Glad to know that your investment return is better than the housing loan rate and by a wide margin.

Wish you achieved your financial goal as soon as possible. 😛

Happy Investing!

Keperluan Wasiat Menurut Undang-Undang Malaysia

.Apa perlunya wasiat sedangkan faraid telah ditetapkan oleh al-Quran. Adakah berdosa jika tidak mematuhi faraid. Ramai orang Islam yang mempunyai tanggapan sedemikian. Keadaan ini berlaku kerana kurangnya kesedaran dan pengetahuan orang ramai tentang keperluan dan kebaikan menulis wasiat.
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Wasiat bukan setakat merancang pembahagian harta pusaka kepada benefisiari tertentu malah ia lebih daripada itu. Dengan adanya wasiat anda boleh melantik seorang wasi yang anda yakin dan percaya untuk mentadbir harta pusaka anda setelah anda meninggal dunia, demi kemudahan orang-orang yang anda sayangi. Disamping itu bagi pewasiat lelaki anda boleh melantik penjaga bagi harta anak-anak anda dikalangan orang yang anda percaya.
Faraid telah menetapkan bahagian waris masing-masing. Tetapi di Malaysia undang-undang yang terpakai dalam urusan harta pusaka sam ada orang Islam atau bukan Islam tertakluk kepada Akta Probate dan Pentadbiran 1959 dan Akta Pusaka Kecil (Pembahagian 1955). Dengan kata lain walaupun waris anda telah berhak mewarisi harta si mati di bawah hukum Faraid atau pun sijil Faraid telah diperolehi daripada Mahkamah Syariah, tetapi harta tersebut hanya boleh diwarisi oleh waris setelah surat kuasa di keluarkan oleh mahkamah. Sementara itu Harta Pusaka si mati akan dibekukan sehinggalah surat kuasa tersebut di perolehi.
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Menurut Akta tersebut jika seseorang yang meninggal dunia dan meninggalkan wasiat yang lengkap dengan melantik wasi yang berwibawa untuk mentadbir hartanya, Probate akan dikeluarkan, manakala bagi kes seseorang meningal dunia tanpa meninggalkan wasiat Surat kuasa mentadbir akan dikeluarkan oleh makamah.
Apabila seseorang meninggal dunia tanpa meninggalkan Wasiat, maka seorang pentadbir yang bertanggungjawab diperlukan untuk memohon Surat kuasa mentadbir dari mahkamah dan menguruskan penyerahan harta kepada waris sehingga selesai. Pentadbir mestilah dipilih dikalangan waris. Ini akan menimbulkan kekecohan atau pertelingkahan sekiranya tiada kata sepakat dalam menentukan siapa yang layak untuk mentadbir (pentabdir adalah orang yang pertama sekali akan memegang harta simati). Tambahan pula dua orang penjamin yang mempunyai sekurang-kurangnya nilai harta yang sama dengan simati dikehendaki dalam proses mendapatkan surat kuasa mentadbir dari mahkamah. Penjamin ini diperlukan untuk menjamin Bon Pentadbiran (bagi nilaian harta RM50,000 dan ke bawah atau melantik syarikat amanah sebagai pentadbir terkecuali daripada syarat ini). Proses mendapatkan surat kuasa mentadbir adalah diantara 2-5 tahun. Kesukaran mendapatkan kata sepakat dalam memilih pentadbir serta mendapatkan penjamin melewatkan proses pengeluaran surat kuasa mentadbir. Sebaliknya bagi seseorang yang meninggal dunia dan meninggalkan Wasiat yang lengkap prosesnya adalah lebih cepat di antara 6 bulan-1 tahun sahaja kerana wasi telah sedia dipilih oleh si mati semasa hidup malah tidak perlu membayar bon pentadbiran jika wasi yang lantik berkemampuan melaksanakan tugas.
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Wasiat Menurut Islam

Orang Islam digalakkan menulis wasiat.
Diriwayatkan Talha bin Musharrif Saya bertanya Abdulah bin Abu Aufa, “adakah Rasulullah S.A.W membuat Wasiat? Dia menjawab tidak”, saya bertanya beliau “bagaimanakah umat Islam difardukan supaya berwasiat (atau diperintahkan supaya berwasiat? Ia menjawab: Raslullah berwasiat dengan kitab Allah (al-Quran).
.Dipetik daripada Sahih Al Bukhari (jilid IV m/s 1).
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Hukum menulis wasiat ke atas orang Islam adalah sunnat kerana terdapat hadis yag menyuruhnya serta perbuatan sahabat-sahabat besar yang hampir keseluruhanya meninggalkan wasiat. Ibn Umar meriwayatkan Rasullulah s.a.w bersabda bermaksud: “Tidak wajar kepada seseorang Islam apabila terdapat sesuatu yang hendak ia wasiatkan maka ia tidur dari dua malam melainksn wasiatnya itu tertulis disisinya (riwayat Muttafaq Alaih).
Hadis riwayat Jabir menerangkan kelebihan orang berwasiat di mana Rasulullah s.a.w bersabda: “sesiapa yang mati meninggalkan wasiat maka ia mati atas jalan Islam, mati dalam keadaan mengikuti sunnah, mati dalam ketaqwaan, mati dalam syahadah, dan matinya diampuni”(riwayat Ibn Majah).
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Sebagaimana dinyatakan, kebanyakkan para sahabat Rasulullah s.a.w berwasiat. Al Qurtubi menceritakan di dalam tafsirnya bahawa saidina Abu Bakar dan Saidina Ali mewasiatkan satu perlima dari hartanya, saidina Umar mewasiatkan satu perempat, manakala Sa’ad ibn Waqas mewasiatkan satu pertiga.Manakala Saidatina Aisyah pula mewasiat barangan rumahnya kepada bekas-bekas hambanya. Ibn Umar pula mewasiatkan kepada bekas-bekas isterinya setiap seorang 4,000 dirham. Contoh-contoh ini menunjukkan para sahabat faham berwasiat adalah satu kewajiban agama yang dituntut walaupun ia bukan sesuatu yang difardukan (diwajibkan).
Kadar harta yang boleh di wasiatkan adalah setakat satu pertiga dan kepada bukan waris.
Namun Islam membenarkan berwasiat lebih daripada satu pertiga atau kepada waris dengan syarat mestilah mendapat persetujuaan waris-waris lain selepas kematian pewasiat. Terdapat pengecualian di Selangor, menurut Seksyen Enakmen Wasiat Orang Islam (Selangor) 1999 dibenarkan berwasiat satu pertiga kepada waris tanpa perlu persetujuan waris lain.
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Faraid menjaga hak waris manakala wasiat pula memberi hak dan ruang kepada bukan waris untuk turut menikmati harta, seperti anak atau ibu bapa angkat, ahli keluarga bukan Islam, cucu atau ahli keluarga yang tidak mendapat bahagian dalam Faraid ataupun untuk apa-apa tujuan kebajikan.
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Kesedaran Tentang Faraid
Ramai yang salah faham tentang konsep Faraid. Sebenarnya harus difahami bahawa Faraid hanya menetapkan nilai saham atau bahagian yang khusus untuk waris-waris tertentu bukannya menentukan bentuk pembahagian. Pembahagian yang dibuat sewajarnya perlu munasabah mengikut kesesuaian dan mestilah mendatangkan keuntungan dari segi ekonomi dan mampu meningkatkan kualiti hidup dan pembangunan ekonomi waris. Salah tanggapan ini menyebabkan banyak kes yang berlaku dimana satu harta dikongsi oleh ramai waris dan ini tentunya mendatangkan kerugian dari segi ekonomi. Keadaan ini menyebabkan nilai komersial hilang dan hartanah sukar untuk dimajukan kerana pewaris gagal mendapat kata sepakat dalam usaha memajukan tanah tersebut. Contoh terdekat dapat dilihat di Kg. Baru satu lot tanah yang hanya seluas 1.8kaki persegi dikongsi seramai 90 orang. Walaupun waris berhak ke atas lot tanah tersebut tetapi dari segi nilai tiada harga. Malah untuk memajukannya juga banyak kekangan kerana perlukan persetujuan semua pihak terbabit.
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Kesimpulan
Dalam menangani masalah ini wasiat boleh memainkan peranan. Orang ramai digalakkan membuat wasiat dan melantik wasi untuk mentadbir hartanya apabila meninggal dunia. Dan di dalam Wasiat tersebut anda tetapkan bahawa pembahagian harta tersebut adalah mengikut Faraid dari segi saham/ bahagian tetapi anda boleh menentukan secara khusus harta –harta tertentu kepada waris-waris tertentu berdasarkan saham mereka menurut Faraid. Contohnya anak lelaki anda beri rumah A manakala tanah B anda beri kepada anak perempuan. Dengan berbuat demikian masalah perkongsian satu harta dengan ramai waris dapat dielakan. Sekiranya harta yang anda tinggalkan tidak banyak adalah lebih baik anda memberi kuasa kepada wasi untuk membahagikan harta menurut saham faraid dan pada masa yang sama memberi kuasa kepada wasi untuk bertindak dengan budi bicaranya membahagikan harta tersebut dengan mengambil kira aspek ekonomi.

Sumber:http://warisanharta.blogspot.com/2008/07/keperluan-wasiat-menurut-undang-undang.html

3 Reasons Why You Should Never Co-Sign a Loan For Someone Else

If a family member, friend or spouse wants to take out a loan, you might assume that you’d be doing them a favor by agreeing to have your name on the loan as a co-signer. If you’re a parent whose child asks you to co-sign a loan for them, it can be difficult to refuse. It may be hard to say “no”, but you need to think about your own financial situation, because you could find yourself in a lot of trouble if the primary signer has trouble making the payments. Here are 3 reasons why agreeing to co-sign a loan is a bad idea.

1. It becomes your responsibility if repayments are’t kept up. When you co-sign a loan, you’re agreeing to pay the loan on primary signer’s behalf if they fall behind on payments. Having a co-signer wouldn’t be necessary in the first place if the primary signer was capable of getting a loan by themselves and this alone makes it likely that you’ll be the one who pays off the loan in the long term. Don’t be surprised if creditors come after you if they can’t get the payment from the primary signer, especially if your track record with credit is much better. If the debt goes to collection, you’ll be the target for repayments. They don’t care who comes up with the payments just as long as someone does. If you don’t want to be stuck paying for their debt, don’t even consider becoming a co-signer.
2. Your credit rating is affected. Even though it’s not your debt, missed or late payments are included on your credit report as though you’d missed them yourself. If the primary signer defaults on the loan, it could do untold damage to your credit rating.
3. It can stop you from getting future credit. You may not be the person who actually applied for the loan, but becoming a co-signer means that it is taken into account when you try to get credit of your own. This impacts how much you can borrow, which can vary significantly if you want to be approved for a mortgage further down the line.
It’s tempting to agree to co-sign for a loan if someone close to you is doing the asking, but before you jump in, think about the damage it could do to your finances. Remember that as a co-signer, you’d be agreeing to take on the full loan if the primary signer finds that it’s more than they can handle. This could happen out of the blue with little or no prior warning and it would then become your debt. Even if the primary signer is responsible with credit and money in general, financial troubles can suddenly occur due to things like unemployment and medical expenses and as a co-signer, you would have to be prepared to deal with the aftermath.
Even if the primary signer never actually passes the loan onto you, the very fact that you’ve co-signed can mean that you’re refused credit for yourself. Co-signing a loan is incredibly risky and it’s not something that we advocate at Money Crashers because of the potential to end up in big debt that you’ve not personally racked up and the emotional distress it can cause between you and your friend or family member.
What are your thoughts on co-signing a loan for someone else?

Sumber:http://www.moneycrashers.com/never-co-sign-loan-for-someone-else/