Revolution In Property Industry Via Virtual Reality
Co-founder and CEO of VR Lab Bhd and Space Solutions Plt Datin Shireen Tan Chwee Wei, also dubbed the VR Queen specialises in Strategic Marketing and Brand Building for the virtual reality (VR) establishment.
VR deals with virtual gadgets for property developers and investors which enable them to actually experience a three-dimensional look and feel of upcoming new properties. This virtual reality tool can simulate presentations for property developers, architects and property investors to enable them to get a substantial outlook of what they are paying for or committing into.
“This platform would save time, money and energy for potential buyers as they would be able to visually experience the space virtually. They can even do their advance bookings of their units by way of using the virtual gadgets from anywhere in the world,” she says.
Besides running Space Solutions Plt for property and tenant management, Tan is also the founding member of Malaysian Proptech Association. This business model on the other hand, relates to creating exponential growth and exploring property technology (prop-tech) opportunities via also incorporating corporate, education and entertainment elements.
Working hand-in-hand with her husband Dato’ Jack Tang, Founder of Virtual Reality, Shared Hosting Services; Property & Tenant Management; Internet Services; F&B; Education and Electrical Consulting Works; together, they form a dynamic management team.
HOW IT ALL STARTED
Tan, well-versed in tenancy and property management matters, shares her experience, having started the business ventures with her husband in the year 2000. During this period, they went through a few property market downturns but survived.
Tan says every property market downturn face different challenges. Fortunately for them, when the whole market was facing a downturn as a direct effect of the the Asian Financial Crisis spillover in 1998, their company on the other hand, did considerably well. This was because their business revenue came from the US.
In 2012, Tan ventured into strategic investment planning via a Property Investors Network (PIN) attended by professionals like bankers, lawyers, valuers, architects and more.
“Our involvement in the Information Technology (IT) industry in the early days generated revenues that were derived from the US although the business was operating in Malaysia. We undertook our first property management project when we bought over 11 units for students’ stay in Lagoon View, Bandar Sunway,” says Tan.
The freehold condominium which she purchased at approximately RM250,000 per unit managed to fetch up to RM3,000 each for a five-room apartment which proved lucrative.
Speaking from experience, Tan, who lives by the saying, “home now or homeless” opines that the property market changes and gets tougher every 10 years.
She says people tend to wait for better times and miss the chance of making profitable investments. A mistake done once can take about a cycle of ten years’ to recover from,” opines Tan.
“It is all about buying without cash and playing up on the leveraging game. The strategy is to master market knowledge first,” says Tan who prefers to hold on to her properties which are mostly residential in nature.
Tan only owns a very small fraction of commercial properties as she feels that the monthy loan instalments payments for the units tend to be way higher than rent. She notes that there tends to be only an increase of 5% – 10% in the monthly rental yield although the commercial value could appreciate by some 10% – 20%. Therefore, Tan says it is more profitable to rent than buy.
If the location is strategic for commercial activities, she anticipates that it would take a ten- years cycle before booming with the first decade not being too stable in terms of rental yields. Tenant rotations could tend to be high so rental values could prove unstable.
The game plan for commercial investment she says revolves around building a strategy which also takes into account the age factor. Hence, she encourages investors to start their investments early so that they can stretch the period of loan payments longer.
The extra advantage Tan has lies in doing research on the student market beforehand. Having done her research, she would approach developers to discuss market movement and rental rates with them. Her strategy then is to discuss the entire floor plan with selected developers before buying those units to leverage on which would be the best way to get future rentals for the student market. She currently has units at Nadayu28 Residences developed by Nadayu Properties Bhd and Dk Senza Residence undertaken DK-MY Properties Sdn Bhd in Bandar Sunway, Selangor which she rents out to students.
Out of Nadayu28’s 400 units of condominiums, Tan who is part of the Joint Management Body (JMB) committee is managing 200 of the units and overseeing more than 1,000 rooms since each unit comes with five bedrooms.
Apart from that, Tan also owns and manages student units at Residensi Laguna in Subang Jaya, Lagoon View, Bandar Sunway and has also bought units at a new development in Subang Bestari, Subang Jaya. The latter development enables students to pay hostel rates while enjoying hotel room concepts.
Sharing a few investor tips, she says due-diligence is key. One should also accumulate market and property knowledge at all times. Tan says that a majority of people would just follow the herd mentality and fail to see the uptrend. However, the minority of smart investors or market leaders would go in early and exit before the property market starts to decline.
She says that her investment plan for next year would be to concentrate on business growth. Each property cycle has a cooling period so holding power is crucial for investors. If not, owners, for want of cash, would desperately hold on to the properties with no existing tenants to and would try to sell the unit fast – failing which, in a worst case scenario, would result in foreclosure.
The current downturn she says is a good time to get good deals and seek appropriate property buys. Banks have been conservative with only 30% approval for loans but they also have their business quota to achieve she adds. Thus, it would also be wise to survey the banks which are open to receive business.
In summary, Tan says it is wiser to start investing in properties as early as possible and to have a good amount of cash flow to support and sustain the investments.
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