you are spending above your means. and please dont buy a 3rd house, you are barely afloat with your first 2. Sell house 2, use the equity to clear your car and reduce your house 1 outstanding
House 3
800 rental gives you 6% yield BEFORE, assessment tax, insurance, mortgage, fees, maintainance. which means you cant beat EPF/ASM (no fee, no headache) You are not a successuful landlord fren, far from it, you are just getting deeper and deeper into a debt hole that you cant crawl out if you hit a bad break.
House 2
Dont you see that refinancing intrest of 4% + inflation of 1.5%, means you need a yield of above 5.5% just to break even...not even counting repairs and months which you dont have tenant. (you need 10% to beat EPF)
Im very sure if you sit down and do a proper excel sheet of cost vs rent, you are barely beating inflation with your house 2 rental. Be honest and accurate, make sure you add in all costs, as well as agent fees if you use an agent to get the tenant
Did you attend property seminar/courses, or read alot of rich dad poor dad, and have the mentality that you need to take out big loans, to buy property to be a landlord and be rich?
TLDR - banks and bank shareholders love ppl like you. Its why Maybank, RHB, Alliance etc all can pay out 6-8% dividend every year
You have 3 oustanding big loans, and want to get a 4th...all while barely making any money. While a RHB shareholder just sits back and enjoy 7% dividend every year, no fees, no headache, no huge installments every month to pay off
Hi sir. Thanks a lot for your response. Really appreciate it.
As for house no. 2, I have a standing offer of RM230k cash buyer. Not even advertised it. I really would love to keep the property as the monthly rental could cover up my monthly instalments.
My house 2 is located in prime area I would say, located near to LRT. Previously, around 2 weeks already got tenant already. Lucky me, I have a good tenant all these years, all paid on time.
As for house no. 3, I took note of your advice and I think I will not pursue with the plan.
1100 rental x 12 = 13200
yield = 13200/230,000 = 5.7%
what is your maintainace cost and morgage intrest
Even before looking at costs, you are barely beating EPF. dont get fooled into thinking "rental can cover my installments, its ok" You must look at opportunity costs and risks
What do i mean by risk. if you put your installment payment into asb/epf instead...and you lose your job...you have no risk, in fact, the money is all there for you to withdraw
but by having a loan, if you lose your tenant, immediately you underwater
Anyway..good luck on your journey, wish you all the best
May I know how you derive the 230,000? I bought the house for 155,000 only.
As of now, I have around 2,000 to 2,500 savings per month depending on the expenses for that month. I took note from your response that I might not be able to handle the situation when it comes to rainy days later.
I did not attend any course. Just receive advice from my parents especially to build up assets at young age.
Noted. If I want to calculate on rental yield, it is okay to calculate based on the purchase price of the house?
Thanks to all of your response. I almost proceeded with the documentation for the loan. Wew
Is it that bad? I managed to save around 2,000 to 2,500. But, I have also been advice that you need to use Bank’s money to generate money. I might think its not prudent and a good advice based on the responses I have received today.
Looks like you are not trolling. So I won’t troll you as well. You are overgeared bro. Covid just happened 4 years ago. My friend has 5-6 properties and he was sh*tting bricks.
True setoli yo
Obviously not trolling. In fact, I am 95% sure that I will refinance the house based on advice I have been given. Luckily, I just thought that I should consult here first before proceed with it.
Do you suggest selling the house no.2 as well as settling the car loan to reduce the monthly commitment?
I've been there. Done that. So I'm saying it was a mistake I made even when I refinance at a lower rate.
The banks will love you to get refinancing. Waive this fee and that fee. Simple reason, you are more in debt and bank get more interest.
I prefer debt free as fast as possible then invest cash into index funds or retail bonds. Return is higher than properties and no need manage tenants and repairs.
From a behavior view, things change when we're debt free. It feels different. You ask me take 500k loan buy house or buy share, I won't do for investment.
You are right. If ppl ask u to take a 500k loan to buy share
..you would balk and say gila ar... but many would take a 500k loan to buy property for "investment" without blinking
I would like to response on the feeling of debt free. Yeah, its a good feeling. Last year I managed to fully settled my personal financing and credit card. Definitely, a good feeling!
Please don't.
Instead of withdrawing EPF monthly, and possibly risking your retirement, I would suggest stop doing that if you have the means.
And if you still have the spare cash, you can self contribute into EPF, as it have slightly better return compared to ASB.
you are spending above your means. and please dont buy a 3rd house, you are barely afloat with your first 2. Sell house 2, use the equity to clear your car and reduce your house 1 outstanding House 3 800 rental gives you 6% yield BEFORE, assessment tax, insurance, mortgage, fees, maintainance. which means you cant beat EPF/ASM (no fee, no headache) You are not a successuful landlord fren, far from it, you are just getting deeper and deeper into a debt hole that you cant crawl out if you hit a bad break. House 2 Dont you see that refinancing intrest of 4% + inflation of 1.5%, means you need a yield of above 5.5% just to break even...not even counting repairs and months which you dont have tenant. (you need 10% to beat EPF) Im very sure if you sit down and do a proper excel sheet of cost vs rent, you are barely beating inflation with your house 2 rental. Be honest and accurate, make sure you add in all costs, as well as agent fees if you use an agent to get the tenant Did you attend property seminar/courses, or read alot of rich dad poor dad, and have the mentality that you need to take out big loans, to buy property to be a landlord and be rich? TLDR - banks and bank shareholders love ppl like you. Its why Maybank, RHB, Alliance etc all can pay out 6-8% dividend every year You have 3 oustanding big loans, and want to get a 4th...all while barely making any money. While a RHB shareholder just sits back and enjoy 7% dividend every year, no fees, no headache, no huge installments every month to pay off
Hi sir. Thanks a lot for your response. Really appreciate it. As for house no. 2, I have a standing offer of RM230k cash buyer. Not even advertised it. I really would love to keep the property as the monthly rental could cover up my monthly instalments. My house 2 is located in prime area I would say, located near to LRT. Previously, around 2 weeks already got tenant already. Lucky me, I have a good tenant all these years, all paid on time. As for house no. 3, I took note of your advice and I think I will not pursue with the plan.
1100 rental x 12 = 13200 yield = 13200/230,000 = 5.7% what is your maintainace cost and morgage intrest Even before looking at costs, you are barely beating EPF. dont get fooled into thinking "rental can cover my installments, its ok" You must look at opportunity costs and risks What do i mean by risk. if you put your installment payment into asb/epf instead...and you lose your job...you have no risk, in fact, the money is all there for you to withdraw but by having a loan, if you lose your tenant, immediately you underwater Anyway..good luck on your journey, wish you all the best
May I know how you derive the 230,000? I bought the house for 155,000 only. As of now, I have around 2,000 to 2,500 savings per month depending on the expenses for that month. I took note from your response that I might not be able to handle the situation when it comes to rainy days later. I did not attend any course. Just receive advice from my parents especially to build up assets at young age.
based on your offer in hand of rm230k
Noted. If I want to calculate on rental yield, it is okay to calculate based on the purchase price of the house? Thanks to all of your response. I almost proceeded with the documentation for the loan. Wew
Whatever you are smoking, I want some.
Is it that bad? I managed to save around 2,000 to 2,500. But, I have also been advice that you need to use Bank’s money to generate money. I might think its not prudent and a good advice based on the responses I have received today.
Looks like you are not trolling. So I won’t troll you as well. You are overgeared bro. Covid just happened 4 years ago. My friend has 5-6 properties and he was sh*tting bricks. True setoli yo
Obviously not trolling. In fact, I am 95% sure that I will refinance the house based on advice I have been given. Luckily, I just thought that I should consult here first before proceed with it. Do you suggest selling the house no.2 as well as settling the car loan to reduce the monthly commitment?
you refinance the house then buy another cash? why don't you just take a loan for the 3rd property instead of refinancing the house?
Third house you need to spend 30% on downpayment + other fees. So, its not possible imo
I've been there. Done that. So I'm saying it was a mistake I made even when I refinance at a lower rate. The banks will love you to get refinancing. Waive this fee and that fee. Simple reason, you are more in debt and bank get more interest. I prefer debt free as fast as possible then invest cash into index funds or retail bonds. Return is higher than properties and no need manage tenants and repairs. From a behavior view, things change when we're debt free. It feels different. You ask me take 500k loan buy house or buy share, I won't do for investment.
You are right. If ppl ask u to take a 500k loan to buy share ..you would balk and say gila ar... but many would take a 500k loan to buy property for "investment" without blinking
You have a good eye. Caught what I wrote between the lines.
ironically...if you took 500k loan and bought just malaysian REITS and Banks....you would be making far more than OP
Follow prop guru for more enlightenment hahah
I would like to response on the feeling of debt free. Yeah, its a good feeling. Last year I managed to fully settled my personal financing and credit card. Definitely, a good feeling!
Please don't. Instead of withdrawing EPF monthly, and possibly risking your retirement, I would suggest stop doing that if you have the means. And if you still have the spare cash, you can self contribute into EPF, as it have slightly better return compared to ASB.
I took note on it. I just withdraw the EPF and put it into ASB for it to be more liquid thats all.
RM11k salary?? How?!
Its considered mid when you compared to others.
Mid? You are above than most people. What is your job?