Invested in one of the SOHO unit in Metro Center at Old Klang Road (OKR) today. It will be my 1st property investment. My wife and I feel it’s a good investment as we believe the place will be an upcoming area. Look around OKR and its surrounding area and you will notice new condos are coming up, some high-end (one at Taman Desa and the other at Kuchai Lama) and some medium-end. The way I see it, soon the whole OKR will transform to new town and the old building will give way to the new ones. More new shops and new condos will be built say 10 years down the road (it’s just my feel).
The unit design is quite modern. 775 sq. ft. separated into 2 floors. 1st floor come with toilet and kitchen about 555 sq. ft. while the upper floor is a one bedroom size of 200 sq. ft. The design can either be a studio apartment or an office unit. It has the facilities of a service apartment, i.e. swimming pool, bbq area and etc.
Some interesting facts:
Discount: 8%
Downpayment: 2%
Free gift: 2 aircons, kitchen cabinets and 1 car park
Land type: Commercial and Freehold
Title: Strata title
Maintenance fee: Range from RM0.20 to RM0.25 per sq. ft. (yet to confirm)
Long-term tenant: Tesco (signed 30 years of tenant agreement)
Total car park: 3,000 lots
Total SOHO unit: 1,080 units with 3 blocks (currently launch 1st block to test the market I presume)
I’m going to turn my unit into office unit, heard can rent at RM2.5 per sq. ft. Not bad if it is true, about 7.3% returns before maintenance fees.
The only issue is it has 1,080 units with only 3,000 lots of car park. It’s going to be pack and tough competition between owners to rent out their unit. But don’t think all will turn to office unit, like I mentioned it can also be a studio apartment. Anyhow, at least I got the 1st block which normally the cheapest.
Showing posts with label Investment. Show all posts
Showing posts with label Investment. Show all posts
Wednesday, April 21, 2010
Monday, March 22, 2010
HLA - Cash Builder: Clause 12
iLast month I bought the HLA cash builder and was hoping all the guarantees will be captured in the policy. In my opinion this is the best deal, so far, in the market. See here for more detail HLA - cash builder/retirement plan. HLA took more than a month to deliver the policy to me because of CNY break.
First of all, the policy did include all the guarantees that my agent briefed me before I sign up. Second it also include the spreadsheet (where it shows how much guaranteed interest, minimum/maximum dividend/surrender value for each year until 35 years) that my agent shows me before I sign up (first time in my experience in buying insurance where it include such spreadsheet in the policy). Furthermore the policy does not have any fine print line.
Looks good right? Well, there is one setback, clause 12. This is what clause 12 says:
“No alteration or waiver of any provision in the Policy shall be valid unless such variation or waiver is made by a Policy endorsement and signed by the Company’s authorised officer. The Company may request for the Policy to be sent to the Company to effect the Policy endorsement. No Company’s agent has the authority to make any alteration to or to waive any of the terms and conditions in the Policy.”
At first glace, it doesn’t sound much but look again. First line it read:
“No alteration or waiver of any provision in the Policy shall be valid unless such variation or waiver is made by a Policy endorsement and signed by the Company’s authorised officer”
This is how I interpret, as long as the Company’s authorised officer signed on the variation or waiver then it is consider a valid deal. So is that mean HLA can change the benefits and guarantee in the policy anytime they want to?
Second line:
“The Company may request for the Policy to be sent to the Company to effect the Policy endorsement”
This is how I interpret, when HLA change the policy, it may or may not request the original Policy to effect the new terms. Is that mean they do not need the policy owner consent to effect the change?
I have asked my agent to get a confirmation letter from HLA to reassure me that HLA will not use clause 12 to change the benefits and guarantees currently stated in the policy. All I want is to lock down the benefits and guarantees. But instead what I received is a letter explaining the intention of the clause.
Their explanation is that clause 12 is to use in situation where the policy owner wish to request for alteration or waiver of any provision in the policy. So I tell my agent that I am exercising my rights in clause 12 to change the provision in such a way that the benefits and guarantees will be locked down. And you know what? My agent told me is not that easy!
So think about it, clause 12 is meant to protect the policy owner but at the same time make it difficult for the owner to exercise it. So what is the true intention of clause 12 then? An escape clause for HLA?
My agent tried very hard to convince me that I do not have to be worried about the clause, how Bank Negara approved the policy (since when Bank Negara disallow escape clause?) and how strong is HL group. Well, all I know is no one can tell the future. Look at Enron, Lehman Brothers and AIA (in USA). If it can happen in other countries do you think it will happen here, back in Malaysia?
Seriously all I request for is just a reassurance from them, and it has been more than a week and yet a simple request like this can’t be delivered. I am tired of all their self- reassurance and excuses and decided to return the policy before the cooling off period.
Disclaimer: Above is solely based on my own interpretation, assumption and understanding. I might be entirely inaccurate and wrong on the interpretation. For those that are worried please get your own lawyer to interpret the clause and please DO NOT rely on my interpretation to make decision as I am NOT a lawyer.
First of all, the policy did include all the guarantees that my agent briefed me before I sign up. Second it also include the spreadsheet (where it shows how much guaranteed interest, minimum/maximum dividend/surrender value for each year until 35 years) that my agent shows me before I sign up (first time in my experience in buying insurance where it include such spreadsheet in the policy). Furthermore the policy does not have any fine print line.
Looks good right? Well, there is one setback, clause 12. This is what clause 12 says:
“No alteration or waiver of any provision in the Policy shall be valid unless such variation or waiver is made by a Policy endorsement and signed by the Company’s authorised officer. The Company may request for the Policy to be sent to the Company to effect the Policy endorsement. No Company’s agent has the authority to make any alteration to or to waive any of the terms and conditions in the Policy.”
At first glace, it doesn’t sound much but look again. First line it read:
“No alteration or waiver of any provision in the Policy shall be valid unless such variation or waiver is made by a Policy endorsement and signed by the Company’s authorised officer”
This is how I interpret, as long as the Company’s authorised officer signed on the variation or waiver then it is consider a valid deal. So is that mean HLA can change the benefits and guarantee in the policy anytime they want to?
Second line:
“The Company may request for the Policy to be sent to the Company to effect the Policy endorsement”
This is how I interpret, when HLA change the policy, it may or may not request the original Policy to effect the new terms. Is that mean they do not need the policy owner consent to effect the change?
I have asked my agent to get a confirmation letter from HLA to reassure me that HLA will not use clause 12 to change the benefits and guarantees currently stated in the policy. All I want is to lock down the benefits and guarantees. But instead what I received is a letter explaining the intention of the clause.
Their explanation is that clause 12 is to use in situation where the policy owner wish to request for alteration or waiver of any provision in the policy. So I tell my agent that I am exercising my rights in clause 12 to change the provision in such a way that the benefits and guarantees will be locked down. And you know what? My agent told me is not that easy!
So think about it, clause 12 is meant to protect the policy owner but at the same time make it difficult for the owner to exercise it. So what is the true intention of clause 12 then? An escape clause for HLA?
My agent tried very hard to convince me that I do not have to be worried about the clause, how Bank Negara approved the policy (since when Bank Negara disallow escape clause?) and how strong is HL group. Well, all I know is no one can tell the future. Look at Enron, Lehman Brothers and AIA (in USA). If it can happen in other countries do you think it will happen here, back in Malaysia?
Seriously all I request for is just a reassurance from them, and it has been more than a week and yet a simple request like this can’t be delivered. I am tired of all their self- reassurance and excuses and decided to return the policy before the cooling off period.
Disclaimer: Above is solely based on my own interpretation, assumption and understanding. I might be entirely inaccurate and wrong on the interpretation. For those that are worried please get your own lawyer to interpret the clause and please DO NOT rely on my interpretation to make decision as I am NOT a lawyer.
Sunday, February 28, 2010
Property investment in Australia
Went to Eastin Hotel last Sunday to have a look at the investment of properties in Melbourne (Australia). Here is what I managed to compile:
Cheapest studio apartment is around A$180k-190k (lets take A$190k for calculation purpose).
Total cost for 1st time payment:
1. Downpayment of 30% = A$57,000
2. Stamp duty (one off) = A$8,000
3. Legal fee (one off) = A$2,000
Total = A$67,000
(Roughly RM3:A$1 RM201,000)
4. Malaysia agent fee (one off) RM5,000
Total payment in RM is RM207,000!!!
Ok fine, if say you got the spare cash and you don’t mind. You may get a yearly return of 6%. Wow better than bank interest ya? Well, think again, here’s why.
Bank loan (Australia bank) interest is about 5.6%. So 70% of A$190k = A$140k, take 5.6% annual interest = A$7,840. Assume you can really get annual return of 6% (note: 6% is on A$190k - the cost of the apartment), so:
Annual return A$11,400
Cost
Bank interest A$7,840
Maintenance A$1,800
Commission for rental (7%) A$798
Total cost A$10,438
Net annual return A$962
Your net annual return is only A$962, that’s 0.5%!!!! On top of that you have not even pay the principle to the bank!!!
Seriously, with that type of money that I have to put in I can buy a condo (with all fees included) in Malaysia with CASH. I can rent out for say RM1k per month, minus off maintenance fees with say RM200 I still left with RM800 per month net return. RM800 x 12 = RM9,600, which give me 4.8% net annual return!!!
Want some more bad news? Real Property Gain Tax in Australia is 20% vs Malaysia is only 5%!!!
Cheapest studio apartment is around A$180k-190k (lets take A$190k for calculation purpose).
Total cost for 1st time payment:
1. Downpayment of 30% = A$57,000
2. Stamp duty (one off) = A$8,000
3. Legal fee (one off) = A$2,000
Total = A$67,000
(Roughly RM3:A$1 RM201,000)
4. Malaysia agent fee (one off) RM5,000
Total payment in RM is RM207,000!!!
Ok fine, if say you got the spare cash and you don’t mind. You may get a yearly return of 6%. Wow better than bank interest ya? Well, think again, here’s why.
Bank loan (Australia bank) interest is about 5.6%. So 70% of A$190k = A$140k, take 5.6% annual interest = A$7,840. Assume you can really get annual return of 6% (note: 6% is on A$190k - the cost of the apartment), so:
Annual return A$11,400
Cost
Bank interest A$7,840
Maintenance A$1,800
Commission for rental (7%) A$798
Total cost A$10,438
Net annual return A$962
Your net annual return is only A$962, that’s 0.5%!!!! On top of that you have not even pay the principle to the bank!!!
Seriously, with that type of money that I have to put in I can buy a condo (with all fees included) in Malaysia with CASH. I can rent out for say RM1k per month, minus off maintenance fees with say RM200 I still left with RM800 per month net return. RM800 x 12 = RM9,600, which give me 4.8% net annual return!!!
Want some more bad news? Real Property Gain Tax in Australia is 20% vs Malaysia is only 5%!!!
Tuesday, February 23, 2010
HLA - Cash Builder/Retirement Plan
I have applied for Hong Leong Assurance – Cash Builder/Retirement plan and now waiting for its policies to arrive. Got to check if all the so call “guarantees” items that the agents said HLA will guarantee is stated inside the policies. I hope it does.
Some bloggers say this is just another endowment plans (not very sure how this works, my knowledge in this area is quite limited), others say no insurance guarantee so much return but if it does then it is worth the investment but 35 years is just too long. Well, if you ask me, if the policies mention all the guarantees then I say it is worth the risk. I did the calculation of up to 20 years of putting the same amount of money in bank with 2.5% interest vs the most conservative guarantee return from HLA and yet HLA provide slightly higher returns. Of course the longer you invest the higher the return, for 35 years I am not investing for myself but for my children. But then again, like I said, I am still waiting for the policies. If any of the guarantees is not mention in the policies then I’ll forget about it (including the spreadsheet calculation that they show to me – hey, the agents said the spreadsheet is part of the agreement so it got to be in or else).
The truth, I don’t trust insurance companies. All making tons of bucks by tricking people like us investing in it. They always have some very cleaver people who are very good with playing with figures and make us believe it is better than putting your hard earn income in bank, and when we do cash out we will never, never ever have the amount that they mentioned. Therefore, I see these type of products as to protect the beneficially and not for investment purposes.
Some bloggers say this is just another endowment plans (not very sure how this works, my knowledge in this area is quite limited), others say no insurance guarantee so much return but if it does then it is worth the investment but 35 years is just too long. Well, if you ask me, if the policies mention all the guarantees then I say it is worth the risk. I did the calculation of up to 20 years of putting the same amount of money in bank with 2.5% interest vs the most conservative guarantee return from HLA and yet HLA provide slightly higher returns. Of course the longer you invest the higher the return, for 35 years I am not investing for myself but for my children. But then again, like I said, I am still waiting for the policies. If any of the guarantees is not mention in the policies then I’ll forget about it (including the spreadsheet calculation that they show to me – hey, the agents said the spreadsheet is part of the agreement so it got to be in or else).
The truth, I don’t trust insurance companies. All making tons of bucks by tricking people like us investing in it. They always have some very cleaver people who are very good with playing with figures and make us believe it is better than putting your hard earn income in bank, and when we do cash out we will never, never ever have the amount that they mentioned. Therefore, I see these type of products as to protect the beneficially and not for investment purposes.
Friday, February 5, 2010
Etiqa Maybank Takaful
I wanted to do some low risk investment and was shopping around for a good one. I sat down and listen when I was approached by the Etiqa Takaful agents and this is what I was informed on their latest product:
1. Principle investment is guaranteed by PIDM (I found out later this is a big bullshit!)
2. It’s a saving plan (hmmm…so it is not an insurance plan?)
3. Maturity is 30 years
4. Free insurance coverage
5. interest can earn up to 8% (not guaranteed)
Right, after some thoughts I asked what are the risks and any hidden cost (I was preparing to invest, with my IC on hand). The agent simply said there are no hidden cost and no risks since principle investment are guaranteed. Worst case scenario, I will get back my investments in full.
The thing is, after the Lehman Brothers’ issue which has stirred the world by surprise, I will ensure every guarantee provides in an investment is recorded in black and white. The agent said he will email me one, which after a month now and I have yet to receive any.
I have also found out that I cannot withdraw in full amount (principle plus interest) before the maturity date or I’ll lose some of my investments. I was surprise as this sound like an insurance plan, insurance supposed to be free! This is supposed to be a saving plan! Mind you I do know that Takaful is an insurance company and not a bank but then why say it’s a saving plan in the first place?
This is not fine since I need the money for my sons’ education and so I ask the agent to calculate how much I can earn in a worst case scenario should I withdraw (be it in partial or I surrender the value) in say after 15 years. Well, I can’t say I am happy with the result but then again this is base on worst case scenario and this is the risk that I have to take. HA funny at first they said there is no risks.
Two days later (and while I’m still waiting for the black and white from the agent saying my investments will be guaranteed) I was withdrawing money in Maybank, another agent approached me. I was furious seeing another Etiqa Takaful agent, how they say there are no risks, how my investments are guaranteed, how there are no hidden cost, how this is supposed to be a saving plan. The agent then explained to me that I must have got it wrong. First of all, there is no guarantee in this investment. NO GUARANTEE. Secondly, there will be cost for admin fees and so on, that is why I will never get back my investment in full. Thirdly, even if I do not withdraw any money and waited until maturity date I will still not receive my investment in full because Takaful is base on profit sharing and on maturity date, depending on the amount of money in the pool, Takaful will calculate how much I will get.
Holy Cow!!!!! No risks and no hidden cost? In my opinion this is an insurance plan plus investment, just that they twist it in such a way that sounds like a saving plan. For 30 years and with such risks involved, I would rather put my money in EPF. Now at least that is guaranteed.
Disclaimer: This is base on my understanding and may not be the facts on Etiqa Takaful Maybank (hack, not even the agents can get it right, how can I?? Two agents telling me two different stories) If you have any questions on the investment product please seek an agent yourself and don’t rely on what I have written above.
1. Principle investment is guaranteed by PIDM (I found out later this is a big bullshit!)
2. It’s a saving plan (hmmm…so it is not an insurance plan?)
3. Maturity is 30 years
4. Free insurance coverage
5. interest can earn up to 8% (not guaranteed)
Right, after some thoughts I asked what are the risks and any hidden cost (I was preparing to invest, with my IC on hand). The agent simply said there are no hidden cost and no risks since principle investment are guaranteed. Worst case scenario, I will get back my investments in full.
The thing is, after the Lehman Brothers’ issue which has stirred the world by surprise, I will ensure every guarantee provides in an investment is recorded in black and white. The agent said he will email me one, which after a month now and I have yet to receive any.
I have also found out that I cannot withdraw in full amount (principle plus interest) before the maturity date or I’ll lose some of my investments. I was surprise as this sound like an insurance plan, insurance supposed to be free! This is supposed to be a saving plan! Mind you I do know that Takaful is an insurance company and not a bank but then why say it’s a saving plan in the first place?
This is not fine since I need the money for my sons’ education and so I ask the agent to calculate how much I can earn in a worst case scenario should I withdraw (be it in partial or I surrender the value) in say after 15 years. Well, I can’t say I am happy with the result but then again this is base on worst case scenario and this is the risk that I have to take. HA funny at first they said there is no risks.
Two days later (and while I’m still waiting for the black and white from the agent saying my investments will be guaranteed) I was withdrawing money in Maybank, another agent approached me. I was furious seeing another Etiqa Takaful agent, how they say there are no risks, how my investments are guaranteed, how there are no hidden cost, how this is supposed to be a saving plan. The agent then explained to me that I must have got it wrong. First of all, there is no guarantee in this investment. NO GUARANTEE. Secondly, there will be cost for admin fees and so on, that is why I will never get back my investment in full. Thirdly, even if I do not withdraw any money and waited until maturity date I will still not receive my investment in full because Takaful is base on profit sharing and on maturity date, depending on the amount of money in the pool, Takaful will calculate how much I will get.
Holy Cow!!!!! No risks and no hidden cost? In my opinion this is an insurance plan plus investment, just that they twist it in such a way that sounds like a saving plan. For 30 years and with such risks involved, I would rather put my money in EPF. Now at least that is guaranteed.
Disclaimer: This is base on my understanding and may not be the facts on Etiqa Takaful Maybank (hack, not even the agents can get it right, how can I?? Two agents telling me two different stories) If you have any questions on the investment product please seek an agent yourself and don’t rely on what I have written above.
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