Original article by Daniel Sim (Property Insight magazine, June 2015 issue, pg 58-60)
How many little-known success stories are there in the real estate investment community here in Malaysia? With the constant growth of the property market in Malaysia, many individuals have forayed into real estate investment in an effort and improve their circumstances. The individuals featured in this series did just that, and through hard work, determination and optimism (plus maybe a pinch of good luck) saw their endeavours pay off in spades.
Starting Small & Dreaming Big
Mohd Salahuddin bin Shaari moved from Kota Bharu, Kelantan to the big city of Kuala Lumpur to find a job and make a living to support his family. Coming from a big family with 9 siblings, they did not have an easy life, especially because he suffered a life-threatening hole-in-the-heart medical condition. In addition, his father, a contractor, had to declare bankruptcy in 2000 due to the economy crisis, and their house was auctioned off. In the end, he and his siblings chipped in to pay the full installment for the house, but it made him realize there would be challenges in getting to buy property for himself in the future.
After graduating with a diploma in 2009, Mohd Salahuddin got a job working in a Japanese company. However, he felt suffocated and tired working there, as his long working hours lessened the time he had to spend with his family, and his salary did not increase much even with a promotion.
H
e then decided a change was needed, and took the first step by gaining knowledge about passive income and property investment by attending seminars. His first attempt to purchase a property failed, due to his eagerness to purchase a condominium priced at over RM1.4 million with his meager RM2,000 salary. He entered a joint venture with his siblings to apply a bank loan, but was unsuccessful. He felt disappointed, but a co-worker at the factory advised him to buy within his means.
His calculations showed him that he could only afford low- and medium-cost apartments, so he started doing research in Balakong. His efforts paid off – in 2012, he managed to buy 3 properties at one time, ranging from RM45,000 to RM65,000. All 3 properties were medium-cost houses, 2 being subsales and 1 from auction. He used all his savings to buy, and then renovated and refurbished the properties to rent out. The rentals of RM1,000 to RM1,300 were more than enough to cover his monthly installments of RM180-230, providing him with lucrative passive income each month. From there, he was further motivated to learn more about property investment, bought property-related books to read, and started expanding his portfolio by buying more properties in 2013 and 2014.
Mohd Salahuddin has a strategy that works for him, and he sticks carefully to it. He shared that he used a compression strategy whereby he leverages on his bank loan to buy many properties below market value. He also stressed that knowing and identifying a target market was important in order to make necessary improvements to attract renters, and equally essential to properly manage tenants. Another thing to take note wheninvesting in high-rise properties would be the utilities, maintenance, and rental rates, as these could affect rental yield.
His current achievements? Owning 23 properties (21 high-rise, 2 commercial) within 2 short years by entering a joint venture with his siblings. One can only imagine what his portfolio will be like in the future, which seems to be shining brightly.
His story tell us to believe nothing is impossible, and that success is gained through observation, hard work, willpower, and the determination to change your life for the better.
