SELECT RIGHT PROPERTIES FOR INVESTMENT

Every property investor hopes to generate good profit from his real estate investment. Therefore, whether it is for personal use or for investment, selecting the right type of property is important. While there are many views on this subject, here are some basic principles and guidelines that can help investors:

1 LOCATION

Selecting a good location is critical; it can include an area which has a high demand for rental, an area that is self sustaining in terms of shopping convenience, availability of schools/colleges,proximity to towns and cities, whether it is self-contained, etc, A location that is established and matured has a record of good yields and returns

2 ACCESSIBILITY AND TRANSPORTATION SYSTEM

Accessibility and transportation is another key factor for growth of all townships, as it contributes to the development of surrounding areas. Roads, railways and LRT accessibility not only add value to the property but also the convenience of travel

3 SELLING PRICE

When selecting the property, it is advisable to compare the selling price of similar properties in the neighboring areas. This is to determine whether the property you are planning to invest in is overpriced and under priced.These records can be obtained from estate agents and this information can guide you to really understand price movements over a period of time. There are many properties that are under priced and it takes time to search for them.

4 BRAND

In considering investment in new developments, the reputation and success of the developer is important. Developers with a good track record deliver properties as promised with good quality finishes and as scheduled.

5 TIMING

It is important to note that timing does help when the property market is in an overheated situation. Since the real estate industry has its own economic cycle, we must try to understand which cycle we are in, However, in any market properties worth investing in, it is a general rule not to invest in overpriced properties at any point in the cycle.

6 THE AMENITIES

The surrounding amenities are an added advantages to the residents as they will give much convenience and result in a comfortable lifestyle. The nearby commercial area and facilities provided by the property itself are among the factors to be considered in real estate selection.

7 RESTRICTION AND CONDITION

When investing in real estate. We must make sure it is not bound by too many restrictions and purchase conditions and this can be reflected in the title. Otherwise, one might face a lot of difficulties or trouble by the time we want to sell off the real estate. The restrictions include land usage, private caveats and transfer restrictions which will affect the selling price of the property.

8 OTHER CONSIDERATIONS

We should also think about our own financial constraints to avoid excessive debt, the returns on investment, cash flow consideration, etc. In addition when calculating the returns, we should also consider our ability to pay for the loan instalment. We should never overlook other hidden costs such as legal fees, security charges, service fees, maintenance fees, assessment quit rent, etc.

In conclusion, property acquisition planning is important before we decide to acquire property. We should choose properties which are cost effective and have potential for high return on investment. One should consider wisely from the the various angles provided above. In all situation visit and inspect the property before u make decisions. In some small degree non-financial factors such as feng shui and geographical directions also affect the value of your investment.

Contributed by: Tan Kang Yap

WHO ARE ESTATE AGENT?

In the past, due to the lucrative nature of the business, many people got involved in the real estate transactions to make quick monetary gains. This rampant and unregulated practice led to many problems of fraud, which led to its regulation. BOARD OF VALUERS, APPRAISERS and ESTATE AGENTS There are approximately 1,900 agents registered with the Board of Valuers, Appraisers and Estate Agents. The Board is the regulatory body of the estate agency profession. It comes under the purview of the Ministry of Finance and is governed by the Valuers, Appraisers and Estate Agents Act 1981. Its primary function is to regulate the valuers, appraisers and estate agents practising in Malaysia, Presently, all practising estate agents must be approved and registered with the board. The boards function are to keep and maintain the Register of Valuers and Probationary Valuers and Probationary Estate Agents and firms of Valuers, Appraisers and Estate Agents. Its tasks include: *Approving and rejecting applications for registration *Holding disciplinary proceedings against members *Prescribing a scale of fees *Regulating the professional conduct and ethics of valuers, appraisers and estate agents *Awarding scholarships As a regulatory body, the board helps ensure that the profession adheres to a general code of conduct and ethics to protect the interest of the property buyers. This code of conduct and ethics includes the following points: *A registered valuer of appraiser who acts as an estate agent for a transaction should not subsequently value the same property for the same purchaser. * a registered estate agent has a duty to protect the public against fraud, misrepresentation and unethical practices in respect of all real estate transactions. *A registered estate agent shall not accept fees from more than one client in any one transactions. *A registered estate agent's name and signature must appear on all proposals, reports and other documentations prepared by him/her, indicating his status as a registered estate agent. For more on the code of conduct and ethics, please go to: http:/www.lppeh.gov.my/codeofconduct.html MALAYSIAN INSTITUTE OF ESTATE AGENTS The malaysian Institute of Estate Agents(MIEA) is the recognized body representing all registered estate agents in the country. Formerly known as the Malaysian Association of Real Estate Agents(MAREC), it was formed in 1977 with the registrar of Societies. The name was changed on May 3,1989 to reflect a more professional image of the organization. The MIEA's vision is to unite all registered estate agents in Malaysia under an independent body to promote greater excellence and professionalism in the real estate industry, so that it achieves higher ideals and creates more profitability. Among its objectives are to; *Address critical issues that affect the industry *Cultivates a positive public perception of the profession *Safeguard and protect the interests of its members and general public *Uphold high professional standards, ethics and integrity among its members *Commit to continuous education to keep its members progressive and up-to-date to remain competitive *Raise public awareness and encourage them to only use the service of registered estate agents. Titles ESTATE AGENTS are simply registered agents with the board. They provide a service in buying, selling and leasing properties for clients so that optimum returns can be achieved. A Negotiator is a salesperson employed by a real estate firms.The real estate agents is responsible and accountable for all the actions of the negotiator. A negotiator is trained managed and supervised at all times by the real estate agent. As defined under Section 22C of the Valuers, Appraisers and Estate agents Act 1981, only registered estate agents can practice, carry on business Ar take up employment as an estate agent. They can prevail on the the court to recover any fees, charges or remuneration for their professional advice or services rendered as an estate agent. Non-registered agents cannot display any signboards or circulate any cards, letters, pamphlets, notices or advertisements that imply they are registered estate agents, nor can they undertake any work that involves real estate transactions. He/She can be punished by law, under Section 30 of the Act. On conviction of an offense under the act, he/she is liable to a fine not exceeding RM25,000 or imprisonment for term not exceeding three years, or both. He/She shall also liable to a penalty of RM500 for each day during the continuance of such offense. To avoid getting scammed, the general public can verify the authenticity of the agent by his/her registration number. Each registered agent is given a number with the prefix "E" e.g E 1719. A real estate firm also has an E number e.g E(3)0294, which is the registration number of the firm with the board. This number must appear in all forms of communication from the firm. This article is contributed by: Chan Ai Cheng *The Board of Valuers, Appraisers and Estate Agents Malaysia Suite 3B-10-3A, Level 10 Block 3B Plaza Sentral Jln Stesen Sentral 5, Kuala Lumpur Sentral, 50470 KL. Tel 03-22737839/ 7862/5584. Fax 03-22731808 Website: http://www.ippeh.gov.my/index.htm *The Malaysian Institute of Estate Agents (MIEA),88 Jln SS21/39 Damansara Utama,47400 PJ. Tel 03-77277477. Fax 03-77293693. Website: http://www.miea.com.my

YOUR PROPERTY PARTNER

Last year, about 270,000 transactions took place in the property market. It is estimated that real estate agents handled approximately 30% to 40% of these transactions, which is about 100,000 transactions. With estates agents having such a stronghold in the property market, you my need to appoint one who can effectively represent you in achieving the following objectives.. 1. To sell the property as fast as possible and 2. To get the best value with the right terms and conditions Selecting the right real estate firm to help you buy and sell your home is essential for a smoother and speedier transactions. If you're planning to buy, sell or lease your property, it is vital to know how to appoint an estate agent who will be able to assist you achieve the objectives above. 1. AGENT SEARCH *Check whether the agent/negotiator is active in you area and whether he is registered with the Board *Ask around and get referrals from sellers who have had experience with them *Get referrals from family friends, associates and even solicitor or financial advisor *Look out for agents who have the most signboards in your area; they may be focused or specialized in your area and that gives them depth and good knowledge *Also look at newspaper advertisement for agents with most listings in your area Agents/Negotiators who focus on one area may be in contact with buyers looking in that area. Naturally, you want to engage someone you are comfortable with and who can do his best to assist you. 2. EVALUATION These are some of the qualities that a good negotiator must have; *Makes you comfortable *Promptly returns your call *Is punctual for appointments *Can advise you, as a seller, on pricing, improvements that need to be made and ways to market your property *Can advise you, as a buyer , of properties that suit you in terms of location and budget *Is knowledgeable and knows comparative values *Knows property law *Conversant with the market and the developments in the country that affect real estate transactions It is important for you to develop a good relationship with your agent. It should be a two-way communication where the agent reciprocates to find out what you really want. It is the agent's responsibility to understand the owner or buyer's needs and demands and find a way to address them. Good agents will have ready information regarding the property market to answer any queries. At the initial stage, get feel of the agent's style of communication and see if you are at ease. If you are a seller., the agent should be able to recommend the best way to sell your property quickly. 3 QUALITIES The agent you choose should * Have good track record, especially in the particular area * Have a marketing plan * Update you on the progress of your property transaction including marketing activities and offers made by potential buyers * Know what strategy would work and what wouldn't * Know the target market for your property and how to reach them * Work with the financial adviser and solicitor to smooth en the transaction The majority of agents are well versed in areas they are familiar with. They should know of the supply and demand and the transacted prices of properties in their area to better advise the house owner on suitable asking price for the property. The asking price will not be the selling price ; it serves as a guide for the agent to negotiate the price. A competent agent must be able to advise the owner, especially if the property he is selling is overpriced. Demanding a price above the market value may harm the transaction. An agent should also be able to convey and negotiate any offer that is put across by a buyer. 4 SUPPORTING AN AGENT There are several ways you can help your agent/negotiator to help you effectively; * Have the paperwork ready e.g S&P agreement,titles, quit rent assessment receipts, etc * Make sure appointment is in writing * Encourage exclusive listing as it is an easy way to monitor performance * Do touch ups and improvement to your property * Keep the property clean and presentable * Allow the agent to place 'For Sale' or "for Rent signboards * Agree on the selling price and keep to your promise * Always believe in a win-win situation in negotiations If you are the buyer, be clear of what you want so that the agent can search for the listing clearly and quickly for a match. nothing is more frustrating to an agent than a vague property requirement or one that is too general. Be clear about your timeline to purchase. This will help the agent priorities based on urgency A well-presented house would reflect happy occupants and allay fears of problems attached to the home. Touch ups may cost a little but the upside is, it can boost your chances of concluding the sale. A well-maintained house gives a first good impression and has a magnetic effect on potential buyers. In every trade and profession,there will always be bad apples. Such cases are few and far between, Getting the right agent to work for you is just the first step of the process. the good relationship you develop with your agent will make the rest of the course far smoother, as many happy clients can attest. Contributed by: Chan Ai Cheng * An article at real estate education programme by the Malaysian Institute of Estate Agents (MIEA),88-B, Jln SS21/39 Damansara Utama,47400 PJ Tel: 03-7727477 Fax: 03-77293693. E-mail: secretariat@miea .com.my. Website: http://www.miea.com.my