SIX RULES IN PROPERTY INVESTMENT - Rule No 4

Rule No .4: Understand the Rules of the Game

To be successful in property investment, an investor needs to know the rules in property investment. Generally, there are five main items that the investor must be aware of: -

a. Major Property Legislations that Govern Property Investment/Development in Malaysia

b. Entry and Exit Procedure
Pre-Contract Stage
• Agency appointment
• Advertisement
• Enquiries
• Viewing and negotiation
• Preliminary agreement
• Preparation of contract/option
• Signing of option and payment of option

Contract Stage
• Financing arrangements
• Investigations and title searches
• Signing of contract and payment of deposit
• Signing of transfer instrument subject to undertaking

Post-Contract/Pre Completion Stage
• Purchaser’s solicitor send transfer for stamping
• Lodge caveat
• Repeat Searches
• Prepare completion statement (by Vendor’s Solicitors)

Completion Stage
• Final settlement of outstanding balance and handing over of keys/vacant possession
• Vendor’s solicitors hand over documents
• Registration of transfer
• Real Property Gains Tax Notifications

c. Technical Analysis
Analyzing Investment Environment
• Market conditions, legal and political constraints

Analyzing Investment Returns
• Initial Yield
• Payback Period
• Equity dividend rate
• NPV
• IRR

d. Property Taxation System

e. Financing
• Term loan
• Bridging loan
• Interest rate
• Etc….