Take Penang Island for example, how do we find great investment grade properties?
We should not find the whole Penang in order to find the GEM. because not every place in penang can invest!

1. Looks for location with Centre of gravity (Highway, LRT, MRT, BRT)
Highway or expressway are the centre of gravity
When we travel from mainland to Penang Island, after crossing the Penang Bridge, we will reach Lim Chong Eu expressway. From here we either travel South to Bayan lepas or North to Georgetown area
Before the existance of Lim Chong Ue expressay, travel form Georgetown to Bayan Lepas will easily take one hour, with expressway, it takes around 15 minutes only.

Because of this expressway, property along the expressway all booming.
For example: Mutiara Height apartment
Purchased in 2010: RM180K
Sold in 2012: RM290k
This is due to the
– Location is very strategic, besides expressway and in between Georgetwon and Bayan Lepas
– Affordable price

2. Looks of location with Golden Triangle (live – learn – work – play)

FYI, if you are not from Penang Island, Bayan Lepas has the most job opportunity in Penang island and Georgetwon is where we can eat and play.

Majority (30-40%) of Penang Island people are working in bayan lepas area.

Thus, Mutiara Height is considered in the location of Golden Triangle.

3. Mass market property – affordable house for that area demography

How much they earn? Average RM5k
After minus all expenses, left RM950 in bank.
As couple, the house hold income is RM10k, thus they can have RM1900 savings
Thus, based on the available savings for instalment, RM380k is what we called affordable house.

Thus property that more than RM500k in area like Bayan Lepas, Jelutong is not worth to invest
However property in area like Gurney, Tangjung Tokong, though more than RM1 mil, still investable, due to the exit plan is different, as we target expat or MM2H buyer.

Different area demography will have different household income needed to own house in these area:
1. Klang Valley (average): RM14,580
2. Kajang RM12,300
3. USJ: 13,200
4. Ara Damansara: RM15,660
5. Subang Jaya: RM15,660
6. Mont Kiara: RM20,160
With Centre of Gravity, you wont know where you need to invest, and also know where you no need to invest.
Just cancel the area that not worth to invest.

Nowadays, freehold or leasehold is not that important any more especially in places like Penang or KL due to the available land for house development getting scarce and high demand with population growth.

If it is 10 or 20 years ago, we will prefer prefer freehold property.
Now, freehold or leasehold also same, as long as it is in the investable locations!

If our investment don’t have the above 3 elements, price won’t go up so fast
1. Location with Centre of gravity (Highway, LRT, MRT, BRT)
2. Location with Golden Triangle (live – learn – work – play)
3. Mass market property (local household income)

Eg: Paya terubong in Penang
1. Centre of gravity (Highway, LRT, MRT, BRT)
Not easily accessible, deep inside

2. Golden Triangle (live – learn – work – play)
No shopping mall
Less job opportunity working
No entertainment
No colleges

3. Mass market property (local household income)
Yes

With 2 BIG no and one yes, the property price in Paya Terubong hardly appreciate as compared to other areas.

As oppose to Bamdar Kinrara in Puchong, The double storey terrace house has appreciated from RM400k @ 2010 to RM600k at 2013

1. Centre of gravity (Highway, LRT, MRT, BRT)
Accessible via Bukit Jalil highway and LDP
LRT station is located at Kinrara BK5 (under construction)

2. Golden Triangle (live – learn – work – play)
Gaint, Chinese primary school, secondary school
7-15km to Subang, Sunway, PJ and KL.

3. Mass market property (local household income)
Household income RM10k and above consider affordable for RM600 – RM700k landed properties

After we had found the an area which fullfil all the success factors, for example Bandar Kinrara 5. That is still not enough.

There is one more step we need to further survey and research, ie the ChatPropertyMalaysia.com criteria.

It will be shared in the next session.