With the indefinite suspension of the Real Property Gains Tax Act 1976 on 1st April this year, the Malaysian property market seems to be a good place for investment especially for those real estate flipper. Property flipping is a practice whereby a recently acquired property is resold for a considerable profit with an inflated value.
When market is hot, real estates prices are appreciating as much as 2% per month. All you need is to wake up early, and queue at the hottest property launch in town. Make sure you are on time to place a booking on the best unit available. Let’s say the developer just requires you to pay a booking fees of RM1,000 to have your name on the book. You will have a few weeks time before signing the Sale and Purchase Agreement (S&P) to get the other buyer.
Lucky enough, you get a desperate buyer who can’t wake up earlier than you to take up your offer. He pays RM10,000 to you for transfering the booking name, you earn RM9,000 in the process. This is a very simple and straight forward property flipping strategy.
How about the risk involved? If you can’t find a buyer within the time limit, you can withdraw from the deal and forfeit the RM1,000 booking fees. If you are cash rich, sign the S & P and pay the down payment. This will buy you a lot more time to get another potential buyer. Because there is no more capital gain tax, you can sell off the property anytime you like, without paying tax for the gain as long as there is a bigger fool.