Following our previous real estate investment success story, let us introduce another individual who jumped into the property investment scene, saw a good opportunity, and grabbed it with both hands. The rest, as they say, is history, and it’s still in the making for this resourceful investor.
Playing With Numbers
Pang Hiok Boon came from a middle class family, and realized early on that he would not be able to save much on a monthly salary alone. After graduating from college at age 24, he started working as a computer programmer. After a period of saving and working overtime, he had accumulated enough and went searching for ways to invest his money.
An opportunity to purchase a shoplot in Johor Bahru at half its market price presented itself, and Pang together with his brother decided to combine their hard-earned money to buy it because of the attractive pricing. It was a case of ‘jump first, swim later’ for them, as they had entered into the property investment without any proper knowledge, plan or mission, but they were blessed with beginner’s luck. The commercial property yielded good rental returns, more than enough to cover the installments, and they brothers’ interest in real estate investment grew. 5 years later, they invested in another shoplot, this time in Happy Garden, Kuala Lumpur, and met with success again.
This prompted Pang to enroll in a property investment training course to hone his skills, but the brothers decided to part ways in their investment journey due to the distance between Johor Bahru and Kuala Lumpur. He then proceeded to buy his first property, a condo in USJ, which he rented out to students and quickly provided him with RM6,500 in rent. Using that as capital, he bought a high-end condo in Sri Hartamas at below market value. Even after renovation costs, the rental yield from that was still positive enough to encourage him to further invest in property.
In fact, Pang put his passion for interior design to good use by attending an interior design course. This not only let him design the interiors of his properties to his liking, but also made him connections with direct supplies, thus helping him save a substantial amount, lower his budget, and consequently lower his rent to compete for tenants.
Pang also capitalized on his background as a programmer. With his maths expertise and technological know-how, he created a worksheet that simplified the calculations required for his property investments and generated a complete list of figures: how much the down payment is, how much the rental returns, all the expenses, etc.
Pang says that despite the floating fuel price, softening market, GST implementation, or other government measure, he will continue investing in Malaysian real estate. He currently owns a number of properties in Johor Baru, Melaka, Kuala Lumpur, Petaling Jaya and Klang, while focusing more on the growing southern region, and has plans to eventually invest in foreign properties.
Pang has some experience in stocks investment before he started investing in real estate. Here are some useful bits of advice he has for new investors (and landlords):
- Be strict and firm with tenants – lay down the rules beforehand and enforce them.
- Stocks are high risk, so don’t simply believe in rumours.
- Properties appreciate over time, which is why they make good investments.
- Go for small developers who sell at reasonable prices and below market value.
- Start early – the earlier you start, the longer tenure you have, the smaller your installments in the long run.
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