Why invest in Real Estate?

Real estate investments are one of the most secure types of investing nowadays. We all know that stocks and bonds can be badly affected by recessions, as we had experienced during 2008. Real estate on the other hand, has the capacity to increase in value as time passes even as an effect of economic fluctuation. If you are thinking of the costs of investing in real estate, you should not worry as we will show you how to make that purchase without taking too much from your own money savings.

Real Estate Never Depreciate in the Long Term

Real estate never depreciates in value. Of course this may sound unbelievable because several years after the sub-prime crisis, the property prices in USA had gone down up 30-50% at some places. But in the long term of 10-20 years, properties only appreciate.

This is one of the most important characteristics, which are the main reason why you should opt for this type of investment. Since no new land is created on earth every single year either through the creation of man or by nature, the demand for this limited supply of this property increases as the population of the earth also increases. The higher the demand, the higher will be its resulting market value.

You can earn profit in real estate in either of three methods: acquiring, selling, and renting it out.

There are some tips and several different methods through which you can earn a profit or income from real estate. First is by giving you better leverage hence making it desirable collateral for loans. The earning capacity for these types of properties makes it an attractive mortgage subject for banks and other financial institutions.

Secondly, this type of investment appreciates over time or increases its net worth through the years.

Thirdly, it has the ability to generate cash flow which is mainly that part of the income profit which you can spend after you have paid for your loans and other expenses necessary for the maintaining of the property.

And lastly, it is a type of investment where you can have a “say” on what happens to it. You can decide what to do with the investment and not just let others do the thinking for you as what happens with investments on stocks where a board of directors generally does the overall decisions for your investments.

Real Estate is not “mobile”, so its location matters.

With regards to “where” your properties should be located, there are some factors to consider. Both the short and longer distances from where you reside have their own pros and cons and it is up to you to decide which to choose. Basically what you have to consider about it would be the type of property that you have, its size and how much you manage the property.
If you have a property which is nearer to you, you may have your tenants at your house almost all of the time. They will be there to field their corresponding interests and problems that they may be experiencing at your property. This can be quite bothersome as you really do not want to hear every trivial thing that may be happening in the place but has no significant relation with you as the owner.

Ideally, smaller properties should be located close to home as it only requires lesser management and hence can be constantly checked for any problem that it may be having such as minor repairs and vacancies. These can all be managed single-handedly by the owner himself and does not require the help of professionals. Also, if a prospective tenant would come by, he will be able to show him or her the property without taking much of the time in travelling. Such a small property should not take hours to reach.

In direct contrast, larger properties can be had even if it is located outside one’s own country. They will require the handling of experienced professionals which shall be composed of the management. With the property in their hands, the owner can take as much time off without the property in sight and still be assured that it is being run by capable men. This is why such properties can be located at farther places.

What Type of Properties to Invest in?

So what type of property should you put your investment on? Commercial leasing spaces such as office and warehouse units, or should you choose to buy an apartment? As far as cash flow is concerned the best property to buy would be apartment buildings. There are several factors which makes it the best property to acquire and not something else.
First, apartments can be bought cheaper than other types of real estate such as houses. They have a lower premium compared with other real estate investments.

Secondly, apartment rental incomes are not affected by business cycles that can be in season or out of season. Having a shelter above your head is one of the most basic needs of human beings hence the demands for it will never go out. You may lose a tenant today, but tomorrow there will be another looking for it. Thirdly, an apartment will provide you with a regular source of income, which you can increase depending on the prevailing market price.

Since apartments are rented out for shorter durations such as 6-12 months at a time, the owner will be able to change the rental fee if there is any fluctuation in the market. Apartment complexes also have an edge over other types of real estate in that they provide additional facilities to tenants such as recreational facilities that make them more attractive for potential occupants.

How to Evaluate and Estimate a Property Value

The first thing that you would need to know when choosing a property to buy is its value. So how do you determine a property’s value?

First, you need to know that a property’s value largely depends on how much income it is able to generate for the whole year which is called its annual rental income. There is a formula which is used in order to determine the value of a property which is:

Property Value = Annual Rental Income/ Capital Rate

A property’s capital rate will depend on its location and also in its type. To get the current rate, you should know the prevailing market rental income for the type of property that you have and also the selling rate of the property. Through this method, you will be able to know if the property is just the right amount or is overpriced.

In order to know if it is worth your money to invest on, you should also compute if it will be able to provide you with a fair amount of income that will give you extra cash after you have deducted mortgage payments and also other expenses for the property’s operations.

Finding good real estate agents

One of the best ways to find a property that will be worth buying would be by hiring the services of a real estate agent. Real estate agents know the ins and outs of buying real estate and they may know a property or two that they know would be a good buy. They know the current trends in the market regarding real estate prices and also they will know how to go through the whole process of buying the property that they can get you the best price that you can pay for such a property. They can also help speed up the negotiation process by knowing how to ask for the right deductions on what things. They also know better about government taxation regarding such acquisitions, the amount of rent that you can expect from such a property, the type of financing that it would require and how to manage the property too.

When choosing a proper real estate agent for you, you should ask him certain things and see if he will be able to answer them correctly and promptly for you. Things such as the amount of income from the property, what age it is, and how much the maintenance costs would be if you buy that property.

He should be able to know what these things are if he is a good real estate agent. Also, he must be able to answer your inquiries promptly to see that he is very much interested in working for your interests. He may even offer some of his services for free if he is really one of those fine agents that seek their employer’s good and not make profit out of them by conniving with the agent of the seller of the property. He should be able to get in touch with at regular intervals in order to update you with how the negotiations with the seller are going and if there are any new developments with the sale.
Real estate agents are usually hired only by sellers and not by potential buyers but if you really want to get the best deal out of the property, having your own real estate agent to assess the property value would be a good step.

Finding Cheaper Properties

If you wish to buy a property but do not have that much budget to do that, then you should turn your sight on buying cheaper properties. These properties may mean poorer conditions but with the proper management, you will be able to turn it into a high-income generating property. There are various reasons why properties go out for a lower price than that of the market and these should make you wary about the chances of buying one.

First there is the problem with finances which is one of the major reasons why an owner will agree to settle for a lower rate. If he cannot keep up with the maintenance costs and other operational expenses, he will be forced to sell the property.

Second is the death of the previous owner and the court is settling his properties. The need to speedily dispense of his properties makes it one of the reasons why it will be put up for sale at a cheaper price.

Third is the dissolution of partnerships due to irreconcilable differences between the owners.

Another reason also is the poor condition of the property which has been mentioned earlier due to perhaps the increase in vacancies in the property and the poor type of management that it is under. If the owner or manager has been secretly taking funds from maintenance costs then the property will definitely be neglected.

There is also the issue with foreclosed properties, which are auctioned at lower prices and also the length of ownership that may be taking quite a toll on the owner. He may find it better to sell the property and may be thinking of retiring.

Financing: Loans vs. Cash

So how do you finance your acquisition? Should you buy the property completely out of your own money or will i t be a better option to put up a loan from the bank?

Experts in the field of real estate investment advice that you should make the acquisition with as much as 90% of the money from bank loan. It is not considered to be a wise move to buy the property with all of your savings especially if you are thinking of renting the property out for tenancy. You only need to think about how much you will need to borrow from the bank, what would be the ideal time-frame for the loan and at what rate should you make the loan.

Experienced real estate investors know that there will be greater returns and advantage if you borrow your capital from the bank. It may not seem so to you at first glance but if you think about it carefully you will be able to realize how much better it is to do so.

But a note of caution here: you should not loan money from a bank if the amount of net income which you can get from the property does not exceed the amount of payment that you have for the bank loan. The loan should at least be 60% lower than the amount of rent income that you can get from the property.

How much loans should you take up when financing a property purchase?

Taking up loans from the bank may not seem to be a wise idea at all but investors advise that you should even make 90% of your investment capital come from a bank loan! Why should this be so? Isn’t it suicide to do that?

No, actually it can generate you with additional funds and lesser interest rates to pay hence making it the best move that you can make for a real estate investment. Loans are like one of those questions from the Sphinx which some do not comprehend at all but with the correct knowledge, you will be able to navigate through the maze easily and acquire benefits for yourself along the way.

First, you should understand the different factors that come into play when you make a loan

  • the principal, or the amount of money that you are going to borrow;
  • the length of time where you will be obliged to pay for the loan; and
  • the interest rate which the bank will charge upon the loan in order for them to generate income.

So here is how you do it:
– go for the largest amount of money that you can borrow,
– the longest period of time for you to pay for it,
which will result into lower amounts of interest on your loan making it easier for you to repay them back.

You may think that it is a crazy idea as you may get worried about how you are going to pay for it back. What you need to know is that at this setting, the amount of payments that you need to make each month or year gradually lessens as the interests lessen and the period lengthens. This makes it all easier for you to pay them contrary to what you may be thinking as an additional problem to your property business. It is exactly the opposite.

With the income from the rental of the property being able to cover for the expenses in the property and with the small amount of payment that you need to give to the bank, you will surely have an extra profit wherewith you can gain additional funding if you know where to put that money.

You can either put it in a savings account where it can earn interest, invest it in another real estate property, which can both provide additional income for you. Or, if you wish to cut down your loan, you can use them to pay for it which will lessen your outstanding principal which in turn will lessen the amount that you would need to pay to the bank. If you do this, you may have to give an additional fee for the early payment that you make but it is not that much though.

Mortgage Refinancing

One of the ways, which can also help augment your financial situation and pay for the investment loan, is by getting a mortgage refinance, on your existing properties. This method allows you to increase the value of your property and also to provide you with additional funds to help pay for the loan.

Since property appreciates in value or increases its market price as time goes by, you can apply for mortgage refinancing say perhaps after four or five years. This will not hurt as the additional money that you can get will help pay for your past loan and also give you an extra allowance which you can use for another real estate property also. Through that property, you can get additional income which will help pay for the other property.

You should not worry about banks interests on your loans. They do not act as a liability if you are investing that money on a money-making property such as properties for rent which includes apartments and condominium units. The income which these properties generate will cover more than the payments that you would need to do and also the maintenance and operational costs.

Do not think of making investment loans as you would with house loans. Houses do not generate income and so the least amount of interest should be taken into consideration when planning to acquire a home. But if you are investing on a real estate property which is able provide you with cash flow, what you would need to consider would be the amount of return on investment that you can get from it and how fast you will be able to get back your capital. You will be able to get maximum returns only if you put less money from your own savings and larger amounts from a loan.

Acquisition of Properties Through Auctions

There are several things that one has to know and think carefully over before buying properties that are auctioned in the market. Firstly, you should know that there are two different types of property auctions: those done by banks and those that are done by the courts. Mostly, properties are auctioned to the public due to being foreclosed either by the bank or by the court.

These two also have distinguishing characteristics between them that you should know in order to be able to go through the process more carefully. Those done by banks are called Loan Agreements cum Assignment or LACA; these types usually go on auction without the necessary titles hence you should be ready to have some budget for the processing of the title.

Those coming from the courts are called non-Loan Agreements cum Assignment or non-LACA and properties auctioned do have titles to them. LACA requires lesser amounts of deposits than those of the non-LACA. And aside from that, auctions of the court come less frequently as properties still have to go through a long process in order to be legally available for auction.

After winning an auction for a particular property, you should check the conditions of the property and see whoever the owner might be. You can do these by going to the appropriate government agency which deals with real estate ownerships. See if the property needs a lot or minimal amount of repairing to be done so you can make some arrangements if that can be deducted from what you have to pay.

The property should also not contain any stray occupants or any occupants at all. It will be your property now and you will have the legal right to eject anyone who is occupying your property illegally. You may need to consult with your lawyer regarding this procedure but the sooner that you can get them out, the better will it be for you. You will also need to be ready to settle any payments or fees that may still need to be paid such as assessment fees, unpaid utility bills and quit rent.

You can get some help about acquiring real estate properties by contacting the Malaysia National House Buyer’s Association. They will be able to provide you with necessary details that you need to know about buying properties especially if you are a first-time buyer. But in the meantime, you can get help from different agents, real estate help centers and government agencies which deal with buying real estate.

Study also the various difficulties or problems which you may encounter on the process of buying real estate such as missing titles, poor conditions of the property and the awarding of ownership to winning bidders. Being in the know before these things happen to you will greatly help you to find a solution for them in case they come your way.

Property Holding Company Vs. Individual Investor

You can also choose to invest in real estate through a company, which deals with buying, and selling real estates. This is a good option too since the government allows deductions on company taxes, payrolls for employees, operating and management expenses and also on the depreciation of machineries. This can serve as a plus for your investment since it cuts out a lot from your income tax which cannot be said to be the same if you are working as an individual real estate investor.

Checklist before taking up a Property

Before buying a property, you should also do some checking about certain things about it. Here is a checklist of what you would need to assess in a property before choosing to buy it.

• What is the physical condition of the property? Is it in a good, habitable condition or is it nearly falling apart? Would you consider buying it at this state even though you can get deductions due to the damages or repairs that need to be done on the property?

• What type of setting does it have surrounding the property? Is the area where it is located a place which has shown much improvement over the years or is it in a place that is gradually being abandoned due to the worsening conditions surrounding the area? If so, you need to know beforehand that it may not appeal to prospective occupants and you may experience losses from it.

• What type of additional facilities does it have? Do they have amenities which will serve to attract good tenants such as enough recreational facilities like a basketball court and a swimming pool, sufficient security measures and sufficient parking areas for the occupants? These are all factors which can make or break your real estate rental business.

• Is the property partially or fully furnished or does it not contain any furnishings at all? Furnishings help increase the rental income that you can get from the property hence seeing if it has or has not any of them will also determine your future income from the property.

• How old is the property? Has it been built recently or has it been in existence for quite a long time already? You need to know that the older a facility gets, the more repairs would be needed to help refurbish it. Minor repairs such as repainting and fixing of broken water and electrical systems can be quite costly so you should be taking age as a consideration.

• Has the property been able to attract a lot of occupants for the past few years? Does it have a lot of occupants at the moment? To be able to know about these, you should do your own ocular inspection but not flagrantly. You can simply pass by at the property when the occupants would be more likely to be at home and you will be able to know that and also the type of occupants that it possesses.

The location of the property can also be a major concern for the buyer but what you should always think about is if the property would be able to command a good return on investment. A property can be in a high, inaccessible place but if there are people, who would be willing to pay highly just to have it, why not buy it? Your property can be in a highly-accessible area but if no one is willing to put up occupancy there due to other competition and bad conditions, then it is just as bad as having a rental property up in the mountains.

You should also drop by the city planning agency in order to see if there are any planned changes in the area such as the building of roads to see if the place would be viable for future rental business.

So as you can see, sometimes location is not a major factor at all when trying to decide whether to buy or not a property. If after you have answered these questions and has seen that the property will be a good investment, then there is no reason why you should not buy it.

What to do with your property: Sell and Rent out?

For you to decide on whether you should let your property be rented or sold out in the market, you should carefully think over some factors which can directly affect on how your property will perform in the market in the near future. You should also think about the monetary considerations regarding the expenses that you would have to make such as maintenance and operational costs that will form part of the money that you would have to do away with on that property.

First, you should consider if the property will be able to cover for the expenses of long-term ownership which is required for leasing out rental properties such as maintenance of the building, the fixing of any damaged or worn out facilities such as rotting ceilings and woodworks which may be attacked by termites which will cause tenants to move out if left untreated.

Aside from that, you will also have to pay for the initial payment for the acquisition of the property that will also include the fees for your agent, legal fees and other documentary stamps that will be needed for the transfer of ownership. Know beforehand what would be the income capacity of the property once you are done with the repairs and furnishings that you will do on it. Will it be able to cover the costs of maintenance and other expenses such as payroll for employees that you may have just in case?

If you are thinking of making profits by selling, you should think about making more than what your purchase price has been. Is the market selling properties of the same type at a higher price than what you have originally paid for it? Or will the difference be only a small margin? Do not be hasty in making decisions over selling a property. Make sure that you will not be making any profits from it through rental if the current selling price does not give you that much profit from it. The fluctuations in the market price will vary almost daily so you should be careful with the timing of the sale.

If you choose to rent the property out, think of the monthly cash flow and the monthly payments that you would need to do for the investment loan that you have made. If there is also only a small amount of margin between the extra profit that you can get out of these deductions then you should think twice about renting the property out. Selling it might be a better option.

Think also in terms of the equity that you will get out of such rental income. Will you have an increasing owner’s equity as time passes by or will you be losing out a lot more?

Also try to think about the future of the area where it is located. Will it be a good commercial area or residential area? Will it attract future tenants to the place or would it be better off as a private property? These are things that you would have to consider before choosing to rent or sell your property out.

Beware of the Signs that you should sell your properties

There are certain signs that will tell you if you already need to sell your property in the market. You should be wary of them in order to avoid overburdening yourself with things to think about when you have really no other choice but to let the property go from your hands.

First, there is the gradual lessening of the amount of equity that you are getting from the property. Is there a lot more repairs that you spend on which takes up much of the income that you are getting even getting to the point where your capital is being used for the maintenance costs? If so, then you probably should be thinking about selling the property.
Second, are there problems that your property might be facing and you can’t find any other solution? Such problems might be disagreements between the owners, the increasing deterioration of the property and the increasing competitions from other rental properties? Are you experiencing a lot of losses due to these factors? Then you should put up your property for sale.

Third, are you thinking of taking another direction in your life in which the ownership of the property would not be quite in line with what you have in mind such as retirement? Old age and a change of residence or occupation can all lead to a different path.

And last, but the most important of all, is if your property can now command a good price compared to your original purchase? If the property is at a good selling position then you should think about selling it out since buyers may get harder to find as competition increases. These are all signs that your property can now be put up on sale.

How to sell a property?

If you finally decide that your property is at the right moment to be sold in the market, you should do some things that may be necessary for you as the seller.

First and foremost, you should think about the person to whom you will hand the ownership of your property to: what type of owner should possess your property? Should he deserve to own the property so much so that he should possess the right skills for management and should have enough wisdom with handling rental property estates? In order to have a buyer, you should post an advertisement for your property or you can get them through a reliable agent who will find the right buyer for you – one who has the finances and will agree at a price that you will most likely settle for.

In your advertisement, it is not necessary to include the address or location of your property. Doing so may harm your bargaining interests as the buyer may set up his own price which may be a lower than what you have in mind or what your agent has found your property to be worth. Also, you should not place the final value of your property on the advertisement. This can turn off some potential buyers who may later agree with you at the price set once they see the property for themselves.

The advertisement should contain an appealing and attractive description of what the property is and its advantages. A simple and bland style of advertising will definitely not do your selling strategies any good if you fail to catch the attention of prospective buyers. List down the various advantages that one can get by buying the property such as low mortgage payments and low interests but do not include the amount of the actual payment itself.

You can choose to sell directly to the buyer and not through agents. This will help attract them as they know that the price would not be padded with additional fees for the real estate agent. Who would like to pay for a higher price if he can also acquire the property at a lesser rate if they buy through the seller himself?

Lastly, do not let your occupants get a hint that you are selling out the property. It may alarm them and send them packing which may not be good for the next owner of the property.

Renting out

When a property is rented out, it generates income for you and you should really treat this as a business.

First, you should know what type of tenants you would like to have. Do you want students, families or bachelors? Do you want a people with stable jobs or are you fine with those who do not have one as long as they can pay the rent on time? Think also about the type of unit that you will be renting out. Will it be for commercial purposes such as offices spaces and warehouse units or would you like to rent it out as an apartment?

Advertise your property in order to attract potential tenants. You can also do this by word of mouth through your friends or relatives.

You should also ask for a deposit of two-month rental and an advance payment for one month. This is in order to secure your finances if ever the worst comes and they fail to pay you for other expenses. Also, you should ask for some legal advice as to what your rights are as an owner which you can impose upon occupants and also their rights too. This will help you avoid any unnecessary problems that you may have concerning legal issues.

You should also know that you can take advantage of the government’s tax deductions for owners of rental properties. Such things will ease you some of the financial burdens of having a property and give you additional money to invest in other ventures.


All of the options that you have for real estate buying or acquiring, selling or renting it out for occupancy will provide you with sufficient profits that make it one of the best investments to buy. You don’t want to lose and gamble your finances into an unsure future. So place some of your money in a real estate property. It is a better investment compared to many other kinds of investments that are out there.

Real estate presents you with an opportunity to have a secure investment portfolio. It is a type of investment that is not affected negatively by fluctuations in the market and appreciates over the longer term. Properties allow you with a lot of ways with which to earn profits and they are seldom out of demand. With these characteristics, it is definitely one of the most important assets that you can have in your portfolio.

If you are interested to get educated on how to make consistent passive income from real estate investment, head over to our first ever online course designed for Malaysian real estate investor: www.PropertyMethod.com

Yours sincerely,
KCLau and OngKL

    94 replies to "Generating Profits in Properties Investment: A-Z Guide"

    • Kyong Reinoso

      Useful piece – I learned a lot from the analysis ! Does anyone know if my company might get ahold of a blank 3-Day Notice to Pay Rent or Quit version to fill in ?

    • Kelvin

      Hi Mr.KC,

      I really enjoyed your articles and did purchase your book and yet still download the ebook to read. It’s very informative and eye opening. Thanks for sharing.

      I have a question here. The current property price out there currently beyond my imagination to invest in one. But if I’m looking at second hand apartment (let’s say 10years apartment) then it will be possible as it’s price could be around RM 200K+-.

      As said, I ever thought of it also, getting a cheaper property for rent out is more easier as there will be more market and lesser risk when renting out.

      The thing now is, these apartment and condo is Old. If I am going to sell it 5-10years later, they may have many problems. For an example we facing everyday, The lifts. There’s lots more if we are talking about an apartment or condo.

      Could that happen that there is very less or no buyer for old properties expecially condos and Appartment? I’m worry about the selling part coz that property age will be like nearly 20year old. This I wonder.

      • KCLau

        Your worry is valid. To mitigate this risk, look at the management. If management is good and well run, the property will be well maintained and value will popularity follows.

        • Kelvin

          That makes sense also. But sometimes alot of things can change as nowadays condo management are manage by the JMC. Once JMC got changed then either it will improve or the otherwise. Will need to monitor closely on the well being of our investment.

    • Eunice

      Is it still possible to acquire a property, let say a condo and rent it out whereby the rental able to cover at least 60% of the monthly installment. Hope I didn’t understand wrongly from the article.

      • KCLau

        you can definitely check the rental yield of a property – by finding out the market rate for the rental there, and divide it by the property value – then you can calculate the rental yield. The mortgage installment will depend on how much you borrow (margin of finance) and how long is your loan.

    • mike teo

      Dear KC,
      Your articles above is no doubt a very informative, useful and practical.
      I have passed it to my sons for their knowledge and information.

      Thanks and syabas

    • Koh Winston

      Thank you for the easy to read and understand article. Will passed it to my children to read. Am retired but a lifelong learner.

    • Matthew

      Dear KC,

      You have 23 properties ? That’s amazing!! I just had 9 properties.
      But I failed some of the investment, I bought a retail shop rm1.2million in mall. I been advertise a year at cheap rental price at rm2000/month. But still yet rent out,
      How to solve it? Can I cheap Sell or cheap rent rm1000 or 500 ? Which will destroy the market price. Kindly advice..

      • KCLau

        HI Matthew, I’ve replied your email personally.

    • Christine Yong

      A very good article
      Would be useful for those first time buyer

    • mike

      Great article. Very detailed and informative blog post. Great job KC. I think this is good for those who are new to the industry. Lifelong learning.

    • […] Generating Profits in Properties Investment: A-Z Guide […]

    • Johari

      Hi, property investment books/articles mention a lot about getting properties at lower than market price – i.e. second hand properties. Any downside to investing in newly launched properties? – apart from the non-negotiability of the price which tends to be quite on the high side.

    • […] I explained in the article Why Should You Invest in Real Estate, property investment suits extroverts, who love going out to look at properties, meet people, and negotiate the deals. […]

    • Stefan

      Partly influenced by yr blog and other Malaysian finance blogger i took the plunge and booked a Malaysian apartment. I am a Singaporean thinking of retiring in JB in the future. Instead of Nusajaya region, i chose Pandan city because of its centralised location, near commercial activity and soon MRT will be build near there. i decided on the spot two weeks ago as it was an opportunity i cant miss

      • KCLau

        @Stefan, great to hear that.

    • Kathleen Tang

      Property investment, if done correctly, can be financially rewarding without a doubt but if we look at how
      America’s property investors are being scalped right now, you will learn that whatever is posted about property is theory after all. For example,what do you do when a tenant misses on his rental payment and that is your only source of mortgage repayment? You think the bank will understand and say, Hi kiddo, it is ok, we understand…we can wait.

      • Altisan

        Dear Kathleen Tang,


        Just to share my opinion,
        We live in Malaysia (Malaysia is truly Asia ;)…
        There is no “Theory without Practical”… Interesting subject… on what to do if tenant
        Misses on his rental payment and that is your only source of mortgage repayment?

        I do believe property investment is an education just begins…. As a small or big investor, they should well plan and well educates themselves to overcome tenant problem mortgage and etc… I do face a problem with my tenant and etc… From my opinion, there is no tenant will last long at landlord…every “Starts there is End”… so tenant keep on changing good for landlord. There is lot of people to seen and experience in your life… you will have great chance! To meet a lot of people….You don’t believe? One of my apartment rental collections comes from Saudi Arabia. Actually this apartment rented to student studying in Malaysia, his parent bank in to me from Saudi Arabia every month… Seriously, I’m happy with gaining profit of RM$ rental every month, but will be happier to gives something that I own… that’s really satisfied me…I collect rental income from oversea… that’s makes me happy too… I just apprentice in here….Just to share my life experience….

        “Learning is Our Life Long Process”


        • KCLau

          @Altisan, good sharing from you. In fact, we should always have a contingency plan and should allow the worst case that we can’t handle to happen.

    • Altisan

      Dear Mr. KC,

      I want to share here….Sometime, is not easy to get good tenant as we tough…. but time answer for
      everything… I want to share here…. I getting 40% income from my rent… from tenant as
      Pasif income… this calculation after I paid off to my property loan mortgage…

      Just consider, how far this market and rental income can go???…. and future & time rules
      everything…. Base on my calculation it’s should be increasing, after 2~3years or more…

      sometime it’s depend… Owner and Loyal Tenant…

      “Learning is Our Life Long Process”

      • KCLau

        Hi Altisan, thanks for sharing your experience here. Rental income derived from good location will always go up in the long term.

        I totally agree with you.

    • Altisan

      Mr. KC,
      Thank you, on your very good information…. I like portion of (Renting Out).
      Gives you freedom to choose your tenant… 100% agree with you…

      Sometime, we could do a mistakes… but we learn from that…

      “Good tenant comes with Good Owner”
      (Correct me if mistaken)

      “Learning is Our Life Long Process”

    • Kenny Ng

      An awesome and great article for investors. Excellent job …KC.

      Kenny Ng

    • Wen Huey

      Kudos for the informative article. Property investment is something I am looking into and this article has highlighted the important issues to look out for to get the maximum yield from the investment. Thanks KC!

    • Celine Loo

      If you are investing on a real estate property which is able provide you with cash flow, what you would need to consider would be the amount of return on investment and how fast you will be able to get back your capital. You will be able to get maximum returns only if you put less money from your own savings and larger amounts from a loan.

    • Howie Phang

      Hi KC,

      First, and foremost, thank you for bringing such good article.

      Secondly, Property investment is one of the many investment opportunities that we all should consider.

      finally, looking for more great stuff from you. 🙂

      Btw, i’m also a member of the course already. ^_^

      • KCLau

        @Howie, thanks for posting here. You are one of my best supporters. Thanks for enrolling in Property Method and I wish you benefit tremendously from it.

    • Pan

      A very informative article!

      When investing in properties, some investors prefer to purchase new properties and some prefer 2nd hand properties. I’m sure both has its advantages an disadvantages. It definitely help if you could cover this aspect in more details.
      Questions like:
      – Investor will make money immediately if property is sold upon completion as the price increase is easily around 20-30% higher than purchase price??
      – When buying new properties, is it always better to opt for DIBS or to get a discount of the purchase price?
      – New launches are very high price, a 900sf apartment/condo in Klang Valley will easily cost RM500k or above. How can a person with income of RM6k per month can afford to buy these new properties??
      – Is it always safer to buy “used properties”, is the risk always lower??
      – When buying used properties, one of the concern is the process of getting the title change to the new owner’s name. A detail explanation on each various type of properties and the required procedure/process to change title name will be very helpful. Eg. leasehold/freehold, low cost houses, state government consent etc.

    • Lee Yun Kiew

      This is really a good article, long but not lengthy, detailed but not boring. Everyone thought they know property investing, but everyone seems don’t know as well …. or at least, that applied to me, i bought a house, so i invest in property, but i bought it for my own stay, so, i am not investing …. so confusing, and i notice many still go for property as popular investment channel in Malaysia, but i am so scared of the big amount needed and locked down for property …

    • Andson Lim

      Hi KC Lau,

      Thanks for your passionate willing to share with us so many info of the investment. The most impressive me that ” bought 23 Properties By age 30″ inspiring me and make me become more confident of properties investment. Online webinar is good platform to sharing idea and marketing for all parties.

      Salute to your good work and creativity…

      Thanks and Regards
      Andson Lim

    • Prem Kumar

      Hi KCLau,

      First of all, thank you for all these great postings about property investments. I got really started with the thoughts after going through some of your great articles. Not to mention this one as it carries abundance of information and easy to understand. I am also learning from other fellow members who has been commenting.

      Seriously, great stuff and keep up the good job.


    • Teoh Giap Seng

      Interesting article.
      Looking forward for something like no money down payment also, and how to have enough margin of safety in case the bank start raising the interest rate.

    • Petre

      the government and banks should publish property transaction data to curb speculation. also, the increase of RPGT looks like only worsen the problem of speculation since investors are now raising their prices as costs that should be born by buyers.

    • Michael Tan

      Very informative, especially for novice investor like myself. TQ.

    • ML POON

      Great article – Buying a property, be it for own stay or investment will always be a wise move. However, with all investments, there are also risks involved which can be mitigated through research and education as choosing the right location and tenants is paramount to success in property investments.

      The benefits of real estate investments are many as pointed out by KC Lau and several of
      the readers. We can take advantage of the current low interest rate and there are plenty
      of ways to finance the acquisition of a good piece of property i.e. maximising the financing
      tenor and even through second-generation financing. What better legacy to leave to our
      children when we pass on than a property that can provide them a consistent income
      or a roof over their heads?

      • KCLau

        @ML Poon, it would be an awesome feeling if our parents had a lot of properties. Thanks for commenting here with your insightful thoughts.

    • Lek

      Thanks for the information, exactly what I need start the property ball rolling! Wish to read more on property investment, especially on high price houses.

    • wing

      Hi KC, thanks for sharing the article, it really helps as i’m in the learning curve on property investment. i would like to know more about the insurance required for getting the housing loan, like MRTA, is it compulsory? how should i deal with it with the bank?

    • Esa Rosdi

      A good piece of article for newbie as well as experienced property investor. However, from my experience, having attended may real estate seminars and doing my own seminar / workshop, I found that a lot of people actually admitted they have attended several seminars, read many books/websites/blogs on real estate investment but yet to invest in it or just bought one or two properties. Sometimes all it need was just a little nudge or some persuasion or convincing for them to start buying an income generating assets.

      Others thing they’re not ‘smart’ enough to invest in properties. To me, even if you’re not the smartest student in your class, don’t worry. Get the right type of education, especially financial education, from the right people. Then take actions to achieve your goal(s). Yes, not just take action but massive actions. Be the opposite of N.A.T.O person

      • KCLau

        Dear Esa Rosdi, as you said, many people learn the knowledge but never take action. Most of us know which kind of deals are good deal. The problem is not many people are putting in the effort to find those deal and negotiate for the best terms. Thanks for your constructive comment.

    • Rashid

      I love to read a lot properties. I’m not an inestor. A good knowlwge on property for beginner like me. Thanks.

    • Ctyap

      As a fresh graduate, I’m in the progress to save the initial capital required to pay the down payment for a property. At the same time, glad that I can learn a lot about property investment and financial management from your website before I going to invest in property. The fear of not getting a tenant to help to pay for my monthly installment for the property I purchased always in my mind. Property area, population and throughout studies are really important to make sure the debt is really a good debt.

      • KCLau

        @CTYap, nice to see you here. Before you buy a property, you can research the area to see if there are people seeking to rent a property there. Normally, a high occupancy rate means it is easier to find tenant on that area. Good luck to you!


      Yes, real estate is a time-proven profitable investment. However problems from tenants are often not fully highlighted. It is also not easy to get good tenants.

      • KCLau

        Hi Boey, you might have heard a lot of scary stories about tenants breaking the properties they rented. The key to avoid this is to interview the potential tenants properly. Of course it might not be zero-risk, but the problem can be reduced if you require the tenant to go through some important interview questions.

    • Raj

      A most illuminating and educational article that should be read by all real estate investors.

    • Wilson Tan

      We all know that your topics are all investing in houses,Condo and Industrial or commercial shop lots.Why isn’t any topics to encourage the young generations to invest in land properties. Is it not a good investment in land or difficult to get bank loan? Buildings or concrete can be extended toward the sky. But can we extend a square foot of land on this planet ? Land investment is long term but the profit is much greater than other properties.

    • bob

      To the thousands, you are our property investment guide, a source of inspiration . For many, it is a check & balance whether you do it right now, or you will loose later. You will find guidance where you will never go wrong to put you on the right track to have an opportunity to property investment. As concise but clear and straightforward.Mr.KC Lau addresses the problems and complexities that will confront us. Thank you for you for your wisdom.

    • Property Hunter

      Great Article on Property Investment!!!

      Good Job…….

    • Dr. SYToh

      Dear KC, as a retiree now, I look back with regrets at all the missed oportunities while working in Govt. service as well as in private practice. This was largely due to lack of information and knowledge.Your article is informative and I wish I had that knowledge then. Dr.SYToh

      • KCLau

        Dear Dr. SYToh, thanks for your feedback. As Warren Buffett once said, if one owns good business, own farms, or income producing properties, he/she will be doing okay in the future. Your wisdom shared with us here is highly appreciated.

    • Winson Chai

      Think big, start small and go deep. Very helpful and informative article, especially to those beginner.

    • Dillon

      Hi KC,

      This is a concise summary of the important points in property investment. Very informative. I have been thinking long and delaying about refinancing my property. Now i have got a bit of idea. Its a good idea to refinance your “investment property” and use the extra funds to buy a new one or refurbished the unit so as to command higher rental. The locked in period is over, bank interest rate is tax exempted and the good part is, the rental value has also appreciated in that area. Thank you for your generous advice.

      • KCLau

        @Dillon, good advice from you. If we buy income producing properties, we can keep on buying since the net income increase.

    • Raymond

      Thanks for your informative article! Just like Gold and Silver, real property investment will appreciate in the long term and apartment rooms will be the best investment. Bank loan should occupy only 40% of the rental income. But accessing the potential value of the property would be difficult because you never know the mindsets of the buyers. Anyways, thanks for your guide in property investment!

      • KCLau

        @Raymond. Thanks for commenting here. The property value now is high and the rental rate is yet to catch up. In the long run, properties do appreciate like you said.

    • IVan Ho

      Hi KC – this is a simple but yet thorough piece of info. great for beginner. looking forward for a more “technical” or advance piece. thanks. iVan

      • KCLau

        @Ivan, thanks for commenting.

    • Johnson

      I always a fan of your website and how I can learn a thing or two in my journey to financial freedom (read early retirement).
      Investing in properties always my cup of tea. One suggestion is to have 2-way communications forum with the experts. This will be more effective in gaining understanding on the subject matters.
      Lastly, keep up the good work.

      • KCLau

        @Johnson, thanks for commenting here. I have had a forum before but it was way under utilized and due to much spam, I close it down.
        There is a forum that I recommend for property investor: http://www.propertywtf.com.my/

    • heng

      price of house manipulated by rich ppl.

      REAL PROPERTY GAINS TAX 5% compare to 30% 1st year
      Prime Minister Datuk Seri Najib Tun Razak announced a Real Property Gains Tax effective from 1 Jan 2010. The real property gains tax is five percent irrespective of tosal year.

      Previously, the real property gains tax are progressive from zero to 30 percent, depending on the holding period of the property. This tax was put on hold from 1 April 2007.

      Exemption to the real property gains tax is given to the sale of a residential property for the first time and transfer of properties among family members.

      • KCLau

        Hi Heng,

        Thanks for your great comment.
        In fact, many rules are made by the rich to benefit the rich.
        It is the same in the USA that sparks the Occupy Movement.

    • […] from all over the world. With the housing market there down lower than it ever has been, purchasing real estate there would probably be a wise investment. With a population of more than three-hundred million […]

    • Tega Manap

      An informative write up that’s useful for someone like me and other young people who are looking to get into the real estate market. I am planning to buy property in the near future and have looked at sites like homeguru which I find really helpful as there is everything on the Malaysia property market (http://www.homeguru.com.my/) there. Continue the good work and I’m looking forward to more such write-ups.

    • Jepp

      Over the long run, property is one of the best investment available either for one off capital gain or recurring income. However, investors need to understand the power of location, location, and location (which creates demand) and their own financial strength (which is their ability to meet payment obligation). Timing is also equally important judging from the current environment (buy low, sell high). Based on the current over-inflated property prices and rental yield, newbies in property investment have to be very cautious and selective in making their decision. This comment does not apply to those buying 1st house for own stay cause you still need a roof above your head.

    • David Goh

      Certainly a long article packed with lots of information from KCLau. Bravo to KCLau again!

      The thing about reading KCLau’s writing versus reading some other articles covering similar topic has a lot of significant differences. In this Internet era, we don’t lack information and there are so many ways to learn new knowledges. However that have not succeeded in helping us gain any wisdom. We have learned a fair bit but not becoming wiser…

      The top reason that keep me coming back for more with KCLau’s work is his writing style makes me think and reflect, hence in return gain wisdom to make judgement for myself. This is very important as any other method out there would not be suitable for just every individual. Ultimately, what we want is to be wiser when we learn, and this is exactly one of the few places we can get that.

    • Elvin Liew

      Over the weekend, I’ve got this really informative article published in your blog – https://kclau.com/investment/property-investing-guide/
      and cannot hold myself to make a simple comment as I normally don’t interact in the past. I must admit that it is a great article – informative, comprehensive and full of insider’s secrets and tips for anyone interested to invest in real estate on wealth accumulation with little or no money.

      My better advice for auctioned properties, whether foreclosure by the bank or the court, you should check the conditions of the property and other encumbrances BEFORE the auction, and not AFTER winning the auction as stated in the article. Although the article is very lengthy, but justify the time spending to read through the whole article. Notwithstanding and without prejudice, I seek your consent to copy, paste, edit and transform this article into ebook for my easy reference and sharing, and serve as a plan to improve my skill and knowledge on property investment.

      KC, it is really awesome for your sharing,

      Thank you
      Elvin Liew

    • Tee Wei Boon

      Hi, KC
      Thank you for your tips and very useful information. I find out some of the coaching company for property investment tell people to invest without come out own pocket money. How do you think. Please give some sharing about this matter??

    • Tan Sue Chein

      It is a pretty good article which include the mortgage and financing strategy as well.
      It is helpful for me to start my properties investment.

    • Elaine

      Impressive and good article. Hope to learn and educate myself more related to this real estate subject. It is not easy to get a cheap property even lelong property with better location sell above market price. Cheaper property hard to find within KL vicinity. There are some risk when buying those expensive property esp after few years there are disaster happening like land slide etc causing the price went down. While buying cheaper property ( of course far from KL area) there are no taker when try to sell out even more than 5 years and no vacant to that property likely attract robbery and drug addict. They are reality now. Thus more research,investigation and proper planning in real estate investment are needed.

    • goh siew kee

      It’s amazing how concisely you have put forth those tips. Although I have never invested in propeerties, I feel that I would like to begin in property investment in the near future.
      Thank you for the tips. I am sure i have more to learn from experts and seasoned investors inorder to avoid pitfalls.
      Truly the book holds alot of essence in successfull property investment techniques.
      felicity Goh SK

    • Teo Teck Guan

      Pretty good and informative article. It’s also quite different from the other author as the article does not encourage the readers to only invest in properties, it also teaches people on selling the properties. The idea of individual investor and property holding company is a good idea for entry investor.

    • Sufian

      Very comprehensive & informative just need to add sample of calculation table and few charts and it will be a good property handbook

    • nurhidayah

      this article came at the right time. My husband and i are looking for a house to buy however quite disappointed as the price is really high unless we opt to stay away from KL area. Maybe we should invest more as we have bought an aprt already and then later maybe buying a decent house around kl would be possible?

    • rashidi

      Interesting entry. However, you should include winning strategies for those who are forced to fork out downpayment of 30% from the sale’s price. This obviously will reduce the cash-on-cash profit margin. There must be some loopholes in the system that we can manipulate.

      • KCLau

        Hi Rashidi,

        We do talk about this in the course. There are several ways but we feel that it is not wise to discuss this openly on the internet.

    • Netmask8


      Interesting + Informative on Real Estate Property.. I’m keen on learning it.

      1. Why not put your money in Real Estate Investment Trust (REIT) stock ?
      You may put lump sum or partially money into it.. No “monthly mortgage / maintenance fee” commitment. Monthly mortgages loan is long-term commitment, unless you can offset/par it with monthly rental collection.
      2. Buying Real Estate Property need MONTHLY commitment. If bad recession/depression strikes, no tenants / no / lower rental collection, how are we going “survive” to pay the monthly bank mortgages loans, monthly maintenance fee(if any), quit rental? If the recession/depression is short( 1- 2 years) it is fine, what will happen if the deep recession/depression is took much longer bad times like Japan era in 1990s whereby Asset Price Bubble and Slow Growth(Lost Decade) GDP ..etc..etc
      3. To be honest.. Nowadays, many future/new couples intend to buy own a property to stay instead of pay rental. They want to become the “homeowner” instead of become a “tenants”. Why pay monthly rental while you can own a “”smaller property”” with low interest mortgages, withdrawn KWSP/EPF Scheme Acct 2 to reduce your mortgage loan?

      Just a thoughts. Your articles are informative and I’m happy + appreciated your time to compile + post it here..Lastly, imagine when 2 or more properties are still not yet finish bank mortgages loan, lower/no rental fee and recession is coming ? Bank may put yr property to auction if you can’t pay for few continuous loans. Thks

      • KCLau

        Hi Netmask8

        Thanks for your great input.
        Regarding your question:
        1. It gives you more control over your investment when you invest directly to purchase a property, compared to REIT.

        2. Economic cycles are happening and repeating itself. In order not to be caught in the worst case scenario, we do provide some strategies to manage the risk in the course.

        3. There are all sort of reasons when people prefer to rent e.g. new to town, not ready yet to buy, hopping workers etc.

        You do give us a lot of ideas to discuss in the members area. Thanks a lot.

    • Richard L


      Simple & very informative. Good knowledge for new investors who keen on real estate & properties investments.


    • fk wong

      apartments will give a better yield than other class of properties but do you agree that generally it will appreciate in the first 15 to 20 yrs but will depreciate after that ?

      • KCLau

        it very much depends on the management and the development on the surrounding area.

    • William C


      Great article! Very honest, informative, helpful, succinct and above all…. well written in a conversational speech, very much like a conversation between a mentor and disciple.

      I once read somewhere… that one the reason why successful people can become even more successful, is that they surround themselves with great coaches or mentors. They don’t mind paying for these coaches’ or mentors’ guidance and advice….they consider these not as expenses, but investments in themselves and their future.

      Your online real estate investment course is going to be great – i just have a strong feeling on that! All the best wishes….and keep up the good work in learning and sharing!


      • KCLau

        Hi William,

        Thanks a lot for your kind words. I do hope to see you in the members area soon.

    • Ahmad Rizudin b. Izzudin

      Pretty interesting article. Only question is this: aside from taking loans, is there any other way of raising cash to buy real estate when your finances are very low, e.g. when your salary is minimal, and more than 75% of it goes towards bills and repayments, as well as some insurance?

      Let’s say….RM 2K? Banks may be more reluctant to lend out money if you don’t have at least RM 2.5K in terms of earnings, so….what alternatives are possible? I could be wrong if the banks will still lend out money, but let’s say that option is unavailable for the time. If so, what can you count on?


      A. Rizudin.

      • KCLau

        This problem is in fact very real. That’s why more people is going to be left out when they just sit there, doing nothing to change. In the course, we had a real case example how to convince bank to loan more money to one of our property investment. When you can prove that you actually make more money if they lend you more, you are going to be granted the loan.

    • KarSheng

      Agreed that this is a great article. It is informative, comprehensive, easy to follow and easy to understand. Thanks for sharing, KC.

      • galvin526

        totally agreed…..especially for the beginner ..

    • Alex Choo

      I find this a good article. All aspects covered for most property investors.

    • matjoe

      i wonder if someone copy paste edit and transform this into an e-book and sold it for rm80. anyway good info though, thank you for sharing

    • Esa Rosdi

      Very informative and beneficial posting. Thanks.

      I personally like & passionate about real estate investment as it has several advantages over other investments viz:

      1- ability to make money buying, keeping and selling, with correct and proper techniques & strategies
      2-generates passive income if done correctly
      3- don’t have to sell it to take out the equity
      4- hedge against inflation
      5- financial institutions are ever willing to provide financing (most if not all properties)
      6- good collateral
      7- were, the owner, are in control. We are able increase the value (do minor renovation or re-paint) or the rental (add furnitures & fittings etc)

      and many more

      • KCLau

        Hi Esa Rosdi,

        You definitely know quite a lot about property investment. You hit right on about point 7 – real estate gives a lot of control to the investor.

    • Johnson

      Dear KC, Your acrticle on Generating Profits in Properties Investment: A-Z Guide, is amazing, its straight to the point, easy to understand, and most of the question any new property investor would have is all answered.
      I can see for a start this new course about real estate investment, is going to be awesome.

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