Below is an abstract from a recent interview by BigFatPurse.com, a reputable Singapore financial website that provides sound stock investing advice to retail investors.
Why the name Property Soul? I wouldn’t expect “Soul” to be related to property.
I am an idealist. I wish all stakeholders in the property industry – including the developers, agents, marketers, lawyers, bankers, sellers and landlords – will ‘have a soul’ in their undertakings in property matters.
What got you started in property investing?
I am a property enthusiast. From a young age, I have been dreaming about owning my own place one day. I also enjoy doing research on the property market and going for flat or house viewings.
It was a natural thing for me to start investing in properties in 2002 when the market timing was right and I had saved enough for the downpayment.
When is the best time to buy a property?
The developer, agent and marketer will tell you that “any time is a good time to buy”. But I will only buy when no one shows any interest in properties, or things are so depressed you can see ‘blood all over the streets’.
What edge does the retail property investor have over others?
None. If you are buying at a new launch, you are only one out of a few hundred buyers. To the developer, your bargaining power is low. You have a better edge if you are buying a resale property. Because to the seller, you are the only buyer who submits an offer, provided that there are no other interested buyers in the background.
Do you observe any commonality among the property investors who have lost money?
People who follow the crowd blindly, buy out of impulse, believe that property prices will always go up, or want to get-rich-quick through buying properties.
What was the most memorable lesson in your property investment experience?
When the property market was at its doldrums between 2002 and 2005, I went for hundreds of flat viewings. Each time I would ask the reason why the owner was selling the property. Many gave the answer of downgrading, cutting loss, over-commitment, loss of employment or failing business.
Some planned to downgrade to an HDB flat. Although the market was bad at that time, prices of HDBs were still strong due to big demand from buyers downgrading from condominiums. For these downgrading sellers, they had suffered losses from selling their condominium units, yet still had to bear the high prices of HDB flats.
Frankly, the downgrading part was not too bad. The saddest part was viewing the flat of a bankrupt or a person close to bankruptcy.
I could never forget the miserable looks on the face of the owners and their families as I walked through the house with the agent, with the Official Assignee in the background at times. Obviously, these poor owners are forced to sell their homes at any price.
What do you think was the biggest factor that attributed to your success in property investments?
Hardwork, hardwork and hardwork (not location, location, location).
What was the motivation behind this book? What do you wish to achieve?
When I first started buying properties twelve years ago, there was a lack of public interest and media coverage of properties. It was difficult to find any good and updated book about investing in the property market.
When the property market picks up again, we hear people from the industry speaking in the media, almost always with an interest in their own business. But seldom do we have neutral advice from experts in the field who genuinely put the interests of buyers and investors over their self-interest.
I want to write a book with a neutral stance from a property investor’s point of view. I hope the book can provide a useful source of information for property buyers at different stages — be they potential buyers, people buying for the first time, aspiring property investors, or savvy investors with many years of experience.
What do your thoughts on investing in overseas properties (especially now with many promising more than 10 percent returns)?
My advice are:
- Only invest in what you are familiar with, not in markets that you know very little about.
- It is only justified to invest overseas when the cashflow and profit are much better than at home.
- Don’t just listen to the marketers. Do your own research.
(Read two articles in my book: ‘Four must-ask questions before you buy that overseas property’ and ‘Three biggest risks buying overseas properties’.)
What is your ideal property?
My ideal property is a high quality property situated in a good location bought at the bottom price that generates high rental return for me.
(Read this article in my book: ‘Four factors that make a good property’.)
Read the original interview here.
Note:
1. Watch the book trailer video at youtube.
2. Check out the free preview of the book.
3. Order the paperback here to enjoy free local shipping. Or you can order the ebook here for an instant PDF download.
“But I will only buy when no one shows any interest in properties, or things are so depressed you can see ‘blood all over the streets’.”
Do you think such time will come again? If it comes, I want to be ready.
Be patient. History often repeats itself.
I also agree that history often repeats itself. However, it really take lots of guts to be a contrarian to buy when the market is so depressed and we are not so sure very have the financial means to ride through the bad times…
That is why only few can really do it – make handsome profits by being able to buy at the bad times.
I am reader of BigFatPurse.com. Saw the post today, read the book preview & bought the book ! It is very rare to find successful investor like you sharing the experience & thought. Love your writing style too…simple, straight to the point & flows well! Thank you very much for writing this book & sharing in this blog!
Thank you very much for your encouraging remarks! You really keep me going in this blog.
Hi I enjoyed reading your blog and book preview. Thank you for the valuable insights. I find that as the market is heading down there seems to be more properties being put up for sale on the market – perhaps owners are trying to offload before prices fall further or interest rates rise? Some are selling at a discount to what they were asking for previously. In my limited experience sometimes these properties are withdrawn from the market when the market is very distressed. Do you think it is good to buy now when the market is less certain and sellers are willing to sell or wait longer?
Thank you and keep writing!
Don’t buy when the market is starting on its way down. You never know how low it can go. Be patient and wait for the dust to settle before going in.
HI,
I like all your writings and same as others I also want to buy my first property in singapore since im paying a high rent for a HDB room plus thinking that actually im paying the mortgage of my landlord. I went to view a few house and usually agents told me property price wont lower as what had before, so they said I should invest now, what do you think about it?
Propertysoul can start consultation firm soon, hehe. But i feel all questions are valid since we are layman who like to hear opinions from the different sources to make (hopefully) informed and very important choices in our lifes.
Yes I am receiving a lot of messages to ask me how to buy their first place. I feel like conducting a course on the subject with a step-by-step guide to help people make proper decisions along the way.
What can you expect property agents to say? Good or bad times they still have to make a living from the commission, right?
Sharing what I heard and read.
Singapore economy is good and job is stable, sellers can hold.
So when will sellers be forced to sell?
When interest rate increases beyond owners’ means.
When they bought bto/ec and must sell their current flats.
But if there is still demand from buyers at that point in time, prices may still hold.
Hi I will want to know how you finance your purchase? How do you go about obtaining your loan? Especially holding onto 4 properties at the same time?
I bought my properties between late 2002 to early 2007. I paid the 20 percent downpayment using cash or cash + CPF. Right from the beginning I could save 70 to 80 percent of my monthly salary. Then the rental return from my tenants added on to my savings that helped to speed up the purchase of the next property.
I borrowed 80 percent from the bank. Banks approved housing loans based on your credit history, annual income and rental return from your investment properties. In other words, they approve loans based on your ability to repay them.
Thank you for your reply. However, with this TDSR, I wonder how to apply. Presumably, it is time to buy because prices have gone down, I don’t think I can get multiple loans.
So would the advice not to buy now be more relevant for investors as opposed to those buying for self stay?
Investors can wait but if one needs to get a house to start a family now, would a hdb/ec/pc be better in the current climate?
Thanks!
I don’t go and ask people to buy/not to buy or buy what type of property. It depends on what kind of person you are. If you were a “value conscious” person like me who only go for value-for-money purchases, you would carefully study the historical prices of different types of Singapore properties and know when to wait and when to enter the market.