Are shoebox apartments almost inhuman?

May 25, 2012 5 Comments

Yesterday, Mr. Liew Mun Leong, CapitaLand’s chief executive, urged the Singapore Government to intervene the building of shoebox apartments, on the reasons that these developers are wasting Singapore’s limited land and homes less than 50 sq m are ‘almost inhuman’.

“It’s almost inhuman. It’s not good for the welfare of the family to feel that constrained.”

The article says that Mr. Liew himself “grew up in a one-bedroom apartment with nine people and often slept along the corridor”.

I grew up in a family of six and we stayed in a less than 50 sq m home without any bedroom for more than 20 years.

When I finally moved out, and was the first in the family to do so, I wish I could tell my mother that what I did was “good for the welfare of the family” because the place was “constrained”.

How could I say so? All my childhood memories are there. It will always have a special place in my heart.

Then I moved to a unit less than 35 sq m for longer than a year. Sharing the tiny space with a sister, we enjoyed the new found freedom and never felt anything “inhuman”.

For almost five years in Singapore, I shared a 1,700 sq ft apartment with two flatmates. Till this day, I missed the fun we had when we stayed together … though I often found it a chore when it’s my turn to mop the floor!

My current residence is a terrace house with a floor area of 3,700 sq ft. For a long time, there are only three of us staying here. Honestly, there are many corners of the house that we seldom visit.

I often take photos of my daughter having fun in the house. When she grows up, the photos will remind her of the happy moments we shared here.

In the Chinatown Heritage Centre, it shows how the whole family slept in a tiny bed in a rented room and called the bed their home.

Not long ago in Singapore, it’s not uncommon for an extended family staying altogether in the same small kampong hut.

Likewise, the whole family took shelter in the same cave during the Stone Age.

I am not suggesting our next generation to go back to the old times and feel the space we used to have. I am also not in favor of shoebox apartments.

But I just want to tell Mr. Liew that

It’s not the space, but the people staying there and their relationship that define their welfare.

I hope you agree with me.

Filed under Experience Sharing, Personal Thoughts

Learning from the richest

May 14, 2012 4 Comments

Do you know that the concept of accumulating wealth is not the same in different continents?

Asians emphasize hard work, suffering and sacrifice to get what they want.

Americans talk about individuals ‘being different’ to achieve that American dream.

Europeans place ‘enjoying life’ above having lots of money.

Mind you,’enjoying life’ does not mean being lazy. In fact, there are many millionaires and billionaires in Europe (you will agree with me after paying a visit to Switzerland). And many of them are self-made.

For Europeans, one can aim to be rich, but not giving up passion, satisfaction and style along the way.

In the TV series ‘Europe’s Richest People’, the show features wealthy people with totally different background — a musician, a clown, a yacht builder, an airline founder, a nightclub owner, etc.

It’s interesting learning from the experiences of these very rich in Europe. They said a few things that left much fruit for thought.

Name: Luca Bassani
Occupation: Luxury Yacht Builder
Estimated worth: 20 million euros

“There are so many people who had a great deal of money but no imagination. They don’t know what to do with their money, and so things get bored. The most important thing in life is not to get bored.”

Name:Theo Paphitis
Occupation: Retail Entrepreneur
Estimated worth: 197 million euros

“It’s all about the chill, the chase, the challenge, the success and then the recognition.”

Name: Christian Jagodzinski
Occupation: Computer Entrepreneur
Estimated worth: 30 million euros

“Sometimes it’s great to be aware of the fact that really if you don’t want to work, you don’t have to work. And it’s very good to have that feeling to say that if tomorrow I want to stop doing what I’m doing I can afford to do it. That’s the freedom that money buys. That freedom is worth something.”

For me, the money from property investment has done at least two things for me:

1) Give me the sense of achievement and excitement when my investment decision proves to be correct.

2) Allow me to go where I want, to be with people I like, and to do things I enjoy (rather than tolling for money).

(Though these days my biggest spending and satisfaction come from buying food in the wet market to prepare for a sumptuous meal at home!)

Above all, I am now more mature to understand that success in life is more than money. And happiness almost always has nothing to do with money.

Investment guru Marc Faber said,

“I think in life success comes on many different levels, monetary success is just one of them, there are many other ways to be successful in life. If you have a happy family and are a good father, this is also a measure of success, if you can help other people this is also a measure of success.

I think our society over rates monetary success and associates success with having a big house, having 3 cars, being able to go on holidays and live the good life when in fact, these are all relatively superficial symptoms of success.”

Sadly, a lot of people are spending too much time and taking up too many mortgages to reach this ‘superficial success’, when they should have planned for financial freedom through consistent savings and careful investments.

Which path are you taking now?

Filed under Experience Sharing, Personal Thoughts Tagged with , , ,

No trust, no business

May 10, 2012 Leave a comment

One evening past 9 o’clock, I got a call from my home number. The caller read out my husband’s full name.

“Hey, it’s for you.”

“Who’s that?”

“No idea, probably an agent asking you to sell the house.” We get such calls at least once a week.

Hubby sat still, with a ‘you fix it, don’t bother me’ look on his face.

I didn’t press the ‘hold’ button so the caller overheard us and raised his voice from the receiver.

“No, no, I’m not asking him to sell his house. I am from Far East and we want to invite Mr. xxx to view some houses.”

Oops, sorry.

These days there’re more flyers than letters in our mailbox.

The flyers are all about property new launches, or requests from property agents to sell our house.

I believe most people prefer to engage property agents through acquaintances or referrals, especially when they’re selling their own residence.

I wonder how many people will give marketing efforts to a property agent whom they have never met before.

Can you imagine a stranger bringing potential buyers (more strangers) to see your place?

Will you suspect the agent hiding anything from you at times?

I had four properties sold by my own property agent in 18 months.

After I sold one of my properties, another property agent who used to lease that property for me learned about the sale and commented,

“What? Only $xxxK? I could have easily sold $30 to $50K higher for you!”

Of course I know how any sale can be pushed higher. There are many agents and sellers in this market who will do anything to sell properties at the top price.

But I am also aware that these transactions almost always come with special conditions — which I don’t think it worths to take the risk.

Even in nil of that, honestly, I am not very keen to pocket that extra tens of thousands somebody else offer.

For me, the peace of mind from engaging the service of someone I can truly trust is beyond money.

I tried to sell one of my properties in 2008 when the property market was overheated. Then came the financial crisis.

My property agent came back with an offer from a buyer. I was hesitating whether to take it or not.

She could simply say ‘take the offer now before the prices drop further’.

Instead, I remember she said this,

“Well, the choice is yours. But the market is going down now. If you can wait, I think you should withdraw the sale from the market.”

Obviously, she saw that things were only going to get worse. She knew that the days ahead would be tough for property agents. She understood that now it’s time she closed any deal possbile and pocketed the commission for the rainy days.

But she never did that. She’s aware that it’s not in the best of my interest to do so.

And over the years, she’s the one who liaised between my tenants and her contractors to get the repairs done. She could have easily added some ‘management fees’ or inflated the repair costs with the contractors.

But instead of doing so, she bargained to get the most reasonable prices, settled the bill on behalf of me first, and sent me the invoices later.

If she doesn’t mind forgoing those ‘money’, why do I need to chase that extra $30K?

When there’s trust, there’s business.

Filed under Experience Sharing, Personal Thoughts Tagged with ,

To let: by agent or by yourself? (part II)

April 12, 2012 Leave a comment

I would definitely engage the service of my property agent every time I rent out my properties, for the following reasons:

1) Why waste the time to advertise, to arrange viewings, and to take the risk of showing strangers around, when a professional can do it for you?

2) Your tenant (especially in a company lease) is mostly likely represented by his/her own agent. You need to pay your tenant’s agent commission anyway. So why not pay your own agent who represents ‘your’ interests?

(P.S. For rental above S$2,500 per month, the tenant is not obliged to pay his/her agent any commission. But the landlord has to do so.)

3) If your agent can advertise, screen tenants, arrange viewings, check tenant’s background, draft the TA for your approval, arrange the handover, collect the deposit, get TA stamped with tenant’s passport copy filed for you … why do you have to do all these by yourself?

4) After renting the place, if your agent can liaise with the tenant, arrange repairs, chase rental/late payment charges, arrange renewal/replacement before end of tenancy … all these services only cost one month’s rent for a 2-year lease, why save?

5) If your tenant asks for early termination, isn’t it more legitimate to ask your agent to chase the tenant for the return of the pro-rata agent’s commission?

In fact, for tenancy renewal, I also don’t mind paying commission to my agent if:

1) She is the one who helped to rent the flat in the current tenancy.

2) At least two months before the tenancy ends (to avoid my loss of rent if we need to find a new tenant), she initiates to contact the tenant for his/her intention for renewal and negotiate the new rent according to the market price.

3) She checks the condition of the place, prepare the tenancy renewal document for both parties to sign.

4) After renewal of the tenancy, she continues to be the main contact of the tenant. In case of any dispute (e.g. late payment, complaints from neighbors, etc.), she will
consult me before settling the matter on my behalf.

When I sell my properties, I also engaged my agent in the process. Honestly, she deserves the humble 1 to 2 percent commission (compared with my profit) for all her hard work.

The only exception was when the place was not rented by my regular agent. I would be there at the 1st appointment to inspect the place before handing over the renting/selling job to my agent.

Now it’s your turn to share with me your experiences or what you think about letting by agents versus by owners.

Filed under Buy-Fix-Lease, Experience Sharing Tagged with , , , , ,

To let: by agent or by yourself? (part I)

April 5, 2012 Leave a comment

A landlord posted a message in a property forum, asking whether it’s better to let the flat through an agent, a lawyer or by himself.

This post is most likely from a 1st time owner.

My two-cents: I don’t think it’s necessary to engage a lawyer, unless yours is a special lease that needs much customization in the contract.

Lawyers tend to give ‘safe advice’ in order to protect themselves (more than their clients). Going to and fro with unnecessary amendments often results in a waste of your time and money.

Agents from reputable property agencies all have a standard TA (Tenancy Agreement). That document has been used by countless landlords and tenants. You can bet that all parties will refer to it in case of disputes.

I tried to rent out my 1st property the 1st time on my own.

Without knowing any property agent, I could only post property ads in the Classified, the property websites, and even the noticeboards at Cold Storage.

I never wanted to do it again:

- I had to handle all the calls at different times of the day. It’s worse when I am traveling.

- I had to open the door for potential tenants or for tenants with their agents, all at their convenience.

- When it came to negotiations of the terms and conditions (namely the rent, furniture, appliances, diplomatic clause, etc.), I wish I had a middleman.

Imagine this: Once the tenancy starts, your tenant can call you in the wee hours of the night asking for help — to explain how to use the dryer, to fix the leaking ceiling, to arrange repair for a malfunctioned aircon, to borrow your spare key to enter the place after losing the original one …

As a landlord, I have experienced all of the above from my tenants. Fortunately, except the first incident, the others were all liaised and settled by my agent.

My agent would not give my handphone number to my tenants. If the tenant really insisted, she would do so but emphasized that she’s the main contact in any case.

Let me tell you a real-life story: I have an acquaintance who once decided to show her vacant condo unit to potential tenants in her free time.

A guy called and arranged for a viewing. He had good telephone manners and showed up decently-dressed just like any executive.

After they walked into the flat, he said the wind was too strong and closed the main door after him.

When she showed him one of the bedrooms, he suddenly said it’s a robbery. Like in a TV drama, her hands were tied and her mouth was taped.

Fortunately, the thief only told her valuables and left. She finally managed to break free after being alone for hours.

To all landlords leasing your place: If you’re not engaging any agent, here’s a kind reminder:

1) Arrange a few appointments at similar timing, or one after the other.

2) Let viewers know it’s an open house this morning/afternoon.

3) Always have the main door widely-opened under all circumstances.

Remember, your safety is your number one priority.

Filed under Buy-Fix-Lease, Experience Sharing Tagged with , , , ,

All property developers are liars?

February 28, 2012 4 Comments

I am reading Seth Godin‘s book ‘All Marketers are Liars‘.

Although I am a veteran marketer myself, being a liar has never crossed my mind.

In his book, Godin talks about “the power of telling authentic stories in a low-trust world”.

I know not everyone who read my posts agree with what I say.

But I’m not a property developer, real estate marketer, property agent, conveyancing lawyer or mortgage banker.

I’m not selling you a get-rich-quick book, or a property investment seminar.

And I don’t even bother about generating revenue from this blog.

That’s why I am free to say what I believe, without having to look at the bottom line or worrying too much about ‘being liked’.

Of course, I understand exactly what kind of messages can please the most audience, drive the most traffic and sign up the most followers.  Yes, those ‘conventional wisdoms’ that you always hear from people around:

- Buy HDB first, then upgrade to a condo, before settling in a landed home.

- Freehold is better than leasehold.

- Anytime is a good time to buy.

- Properties prices will always go up in the long-term.

- The market cannot collapse because of demand from foreigners.

- Mickey mouse units is the trend in the future.

They may not be the truth.  But they make up what an average Singaporean’s ‘view’ on properties.

Godin said in ‘All Marketers are Liars’,

Identify a population with a certain worldview, frame your story in terms of that worldview and you win.

A worldview is not what you are. It’s what you believe.  It’s your biases.

A worldview is not forever.  It’s what the consumer believes right now.

That’s why you see property ads in TV or local papers with images completely irrelevant to the development:

- A young family running at the beach;

- A sexy lady swimming or resting by the pool;

- A group of yuppies sipping wine in a bar; or

- Two well-dressed Caucasians overlooking the fantastic night view.

The reality is:

- The condo is most likely far from the beach, with a pool too small and frequented too often by too many noisy kids.

- Your unit most likely comes with a blocked view.  Its size makes it unrealistic to fit in a bar counter.

- Expatriates are most likely not interested to move into an area inhabited mostly by locals.

But developers are selling you a dream, not a commodity.

And because it’s a consumer’s fantasy, they are not obliged to tell just the boring facts, but inclined to expand your imagination with an ‘artist’s impression’ in an abstract wonderland.

As what Godin said,

Successful marketers are just the providers of stories that consumers choose to believe.

I would like to end this post with a comparison of property launch advertisements in the Singapore papers in 1985-6 versus 2012.

Come take a good look and let me know what you think.

 

Filed under New Launch, Personal Thoughts Tagged with , ,

How to make it in properties

February 13, 2012 8 Comments

I’m excited to see comments in my posts and messages in my mailbox.  They can cheer me up even on a bad day.

The traffic of my blog usually surges during public holidays.  Messages kept coming in during the recent Christmas, New Year and Chinese New Year breaks.

But I am still waiting for somebody who can drop me words like …

1) I also made my 1st pot of gold from properties!

2) Hey, I started buying from my younger days too.

3) I was (in a similar situation) before but I (used a different way) to deal with …

… but for some reasons, so far this doesn’t happen : (

Instead, I often get questions like …

1) When is the time to buy (again)?

2) Where to find a good buy?

3) How to (save to) buy the first one?

… that you would know the answers to all of the above if you’ve read my earlier posts.

Just in case you miss it.  I am repeating myself with some quick answers:

1) When?

- When you mention the word “Property”, people respond in pain or in contempt.

2) Where?

- Classified Post.

3) How?

- Like running a company, minimize unnecessary spending and maximize profitability.

And do you realize that …

When you lament that every month you just earn enough to get by, many earn less than you manage to save more?

When you think that it’s impossible to save the 20 percent down payment, many follow their plans diligently every day to reach the same goal?

When you wonder how you can be a successful property investor, many have already reached there after years of hard work?

If someone manages to make it, people like to believe that lady luck must be smiling at him, that he must come from a rich family …

For if this is true, they would feel much better.  They can sit back and don’t feel pressured to do anything.

I grew up in a flat with no bedroom.  I could choose to work hard to buy my own flat, or forever occupy the upper level of a double decker bed.

When there’s a will, there’s a way.

I remember those days when I spent almost all my weekends and some weekdays after work on flat viewings.

I won’t miss reading every single book title and article in the web about property investment.

I won’t go to bed until I crunched all the numbers and did all the title search.

I know I was too addictive when I found eating and sleeping a waste of time.

In Outliers: The Story of Success, Malcolm Gladwell pointed out that,

Success is a function of persistence and doggedness and the willingness to work hard for twenty-two minutes to make sense of something that people would give up after 30 seconds.

100 percent look like Mom. Yeah!

Tonight I look at my baby girl, who already got her own bed (I mean a baby cot) right after birth, and I wonder how I can motivate her to work hard and earn her own fortune in properties.

By the way, Happy Birthday sweetheart, on your sixth month birthday!

Filed under Experience Sharing, Getting Started, Personal Thoughts

Story of my third property (part II)

January 17, 2012 6 Comments

The one-bedroom unit near Clarke Quay was a good bargain. But it took months to close the deal.

Every time I had a request, offer or counter-offer, it took ages for the property agent to get back to me.

His excuses included (but not limited to) owner in different time zone, cannot get hold of owner, owner not replying e-mail, too expensive to use IDD, etc.

For instance, a simple task of getting a signature from the owner on the OTP (Offer to Purchase) could take weeks.

And his explanation was: Under heavy snow, the poor owner had to cycle to the post office to pick up the mail. Shouldn’t we be more patient?

It didn’t help that the property agent knew the owner personally. He insisted that we should respect the owner because the latter used to be a renowned person (in a respected profession).

Looking back, the teaming of a weird agent and a laid-back seller might be a blessing in disguise.

I bagged a good value property, not because I was lucky, but probably because the rest of the potential buyers were so frustrated that they could have backed off for long!

The OTP was finally signed by both parties on the last week of April 2004. I had waited four whole months to seal it!

But it’s all worth it.

The unit was originally rented out for $2,500. That’s a net return of close to 7 percent. Above all, this was the lowest rent I received for this property.

It provided me every month with a satisfactory rental return for 5 1/2 years. The rent did surge to $5,000 at one time in 2007. My net rental return was an impressive 26 percent!

I figured out that the tenant was paying $167 a day, similar to the daily rate of a five-star hotel at that time.

And for the number of days he was out of the country, it’s actually more cost-effective to stay in a hotel. At least he could enjoy housekeeping and other hotel services, minus paying the utility bills and servicing the aircon!

The condo was once popular among Caucasian expatriates. Over time, it was attracting Japanese and Korean tenants. The majority were company lease.

I also learned that for properties that can fetch a rental over $2,500 (or $3,500 during good times), the profile of the tenants is very different from those who have a lower budget.

I am also grateful to meet my property agent during one of the changes of tenancy in this property. She became my sole agent and provided me with invaluable advice and great support over the years.

I refinanced the property with another bank on the second year. The new mortgage charged only 0.98 percent interest for the first year. It also gave me 5 percent cash on the loan amount (i.e. $21,000), to be refundable pro-rata if property was sold/refinanced in 15 years.

When I decided to sell the unit, I received several offers that came at different times.

It was finally sold for $980,000.

I know similar units are sold slightly higher than $1 million subsequently. But I am still happy with my 87 percent profit.

I guess I am the type of investor who are most willing (and only comfortable with) making money by “selling too early”.

Filed under Buy-Fix-Lease, Experience Sharing Tagged with , ,

Story of my third property (part I)

January 12, 2012 3 Comments

Hi, I’m back with sharing my property buying stories.

Right after the completion of my 2nd purchase, I resumed my flat viewing routine.

Again my criteria of purchase were:

1) Good location and layout;

2) Minimum 5% net rental return; and

3) At least 15% below last transacted price.

I remember it was Christmas in 2003.

The property market was very quiet. Bad market sentiment was a major reason. Above all, everybody was simply too busy preparing for parties and vacations that no one bothered about properties.

(Lesson learnt: Festive seasons like Christmas and Chinese New Year are perfect times to look for good deals.)

A one-bedroom unit in a prestigious condo near Clarke Quay was going for sale.

It was TOP in 2000 and launched during the time when Far East Organization wanted to clean up its poor image by building a series of high quality condos.

(By the way, my 4th purchase is also one of these FEO products. I’ll tell you more next time.)

The development came with a resort feel — low rise, few blocks, green landscaping and tranquil environment.

The fittings were nice, with excellent carpentry work for wardrobes and cabinets; high-tech security cards to access main/side gate and your unit’s door …

The place was rented to a Caucasian lady for a year and had been left vacant since.

Honestly, it looked brand-new to me.

The owner had financial difficulties and decided to sell the flat to raise money.

In fact, she had migrated overseas for years. Relatives bought the property on her behalf.

She had never seen the unit before. I assumed that she would be unlikely to be emotionally attached to the property — a good sign for potential buyers.

It was bought at close to $800,000 but now asking for $560,000 only. The last transacted price of a similar unit was $625,000.

After some bargaining, my last offer of $525,000 was finally accepted by the owner (by the way, I am a terrific negotiator!).

It’s easier said than done.

As people say, “true love never runs smooth”. The same also applies to a real good deal.

Let me share the hiccups with you in my next post.

Filed under Buy-Fix-Lease, Experience Sharing Tagged with ,

What will happen next

December 12, 2011 9 Comments

Take a look at other countries in this region that are star performers in properties not long ago. That may give us a glimpse of what’s going to happen in the Singapore property market.

In China, since the introduction of government cooling measures, property developers have cut prices up to 15 to 20 percent.

Second hand property owners can easily offer 30 percent discount for flats they purchased just months ago at the launch.

Property agencies are the ones that take the biggest blunt. Thousands of agents have been laid off and hundreds of offices are closed.

In Hong Kong, there are rounds of layoff by big property agencies. The smaller ones are closing one after the other.

The industry estimated that close to 100 agencies have gone, affecting 20 percent of 37,400 agents.

It is reported that some agents who previously market luxurious condos at prime districts are now renovation contractors.

Last Friday, there’s another piece of news from Hong Kong that shows how difficult the market is.

At a new launch, property agents from two different agencies were waiting for clients in front of the showflat. As expected, potential buyers were rare.

What’s meant to be a peaceful distribution of leaflets somehow turned into a street fight with 10 to 20 agents involved. It all started with throwing of a lighter, followed by an exchange of fists and kicks.

When the police came, the agents there simply said “we didn’t see anything”.

Time is tough.

Filed under Market Updates

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