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Do Your Research

conveyancing lawyer by profession, Azalea Chin has served in the legal line for 30 years, before she decided to join the property industry as a real estate negotiator recently. Investing in property came naturally to her as she was already involved in conveyancing for all the sub sale dealings during her days as a solicitor.

The first property Azalea purchased was located in Taman Sri Sinar, Segambut, Kuala Lumpur. It was around the time when she was planning for her wedding, that she bought the two and a half-storey town house which cost her RM39,900 back in 1989. Thanks to the good capital appreciation, Azalea sold the house three years ago for about RM300,000.

“Currently, I still have five other properties which included a factory, a shop office and the house where I am living,” says Azalea. Among the many challenges along the way, the toughest yet for Azalea was the lesson learnt from investing in the wrong property.

“The worst investment I made was in Bukit Beruntung. At that time when the developer first developed the township, they promised the buyers that it would be developed into a sustainable and modern township similar to other thriving new townships such as Petaling Jaya. However after we bought a factory and shop office there, the prices went down due to poor township planning by the developer. So if I want to sell these properties today, the market rate will be very low, thus this investment experience was truly a regrettable one for me,” Azalea shared.


As Azalea has accumulated more experience over the years, she is now quite confident even in this market slowdown, and advises those first time buyers to look for a completed building when they want to invest in real estates.

“When you buy a completed development, you will know more about the location and what facilities that are offered there. However the downside of buying such a property is that the buying price will be higher in comparison to those buying directly from the developer during the project launching. Still, an appreciation of 30 to 40% is still possible when you buy a completed project,” said Azalea.

She also shared that if one is considering to buy a property directly from a developer, he must first study the background of the developer to find out whether it is a branded or trustworthy developer, and how is their management style like. As a matter of fact, whether the building is well-maintained and well-managed, how much is the monthly maintenance, as well as the location of the development are all very important. Prudent investors might also want to find out what are the townships adjacent to the project, and what are the amenities provided there.

On property investment, Azalea prefers the “Flip and hold” strategy. “It is better to buy and flip units under construction and sell them off once completed. To achieve a positive cash flow, I will rent out the property. There are many homework to do before we buy, in order to ensure that it is a good ‘Income-generating asset’. We need to study the location first and see how is the accessibility like, whether there are any connecting highways or LRT stations nearby, and also whether there are any facilities in or nearby the development, for example a grocery store, restaurants, banks and so forth.”


Azalea usually seeks for good deals from matured townships. She notes that due to our current economic situation, many places are facing an oversupply of properties, therefore prices are suppressed, and presenting investors with ample cash a great opportunity for investment. “This is the time when the developer want to push up their sales by giving out a lot of attractive packages, for instance no down payment is needed for owning the house. With these, one can easily get a 90% loan, and the developer will also offer some additional rebates.

“If you are planning to buy any second hand property, you have to be prepared to invest a lot in it,” says Azalea. Initially you have to fork out a down payment of maybe 10 to 20%, because you have to sign the Sales and Purchase Agreement (SPA) first before one can apply for a loan.

As the market rate for sub sale properties vary a lot from one property to another, situations where the bank’s valuation is lower than the asking price may arise. For example, the seller is asking for RM500,000 yet the valuer tells the bank that the market rate of property is only RM450,000. As the banker thinks that the property is only worth RM450,000, the loan approve will be only 90% of this amount. In such a case, the buyer will have to pay for the gap not covered by the loan himself.

In addition, the buyer of a second hand property will still need to get ready another sum for renovation. If it is an old house, the renovation including repairs to the wiring and piping systems might easily set the buyer back by around RM50,000 or even RM100, 000. Thus the buyer would need to prepare a lot of money for all these purpose, on top of paying for the legal fee of the Sales and Purchase Agreement and the Loan Agreement.


According to Azalea, when you buy an auctioned property, there may be some unforeseen hidden costs to pay, so you must read the proclamation of sales carefully. In any auctioned property, the bank will not cover the outstanding utility bills such as water, electricity, broadband internet or any other rates unpaid by the previous owner, for example quit rent, assessment tax and so forth.

On top of that, if you buy an auction property, the bank will not deliver the vacant possession (VP) to you, you will have to get the VP on your own. This might pose an issue if the property is still occupied by the existing tenant or the owner, because then you will have to acquire a lawyer to serve them notices in order to evict them.

“I have not bought any auctioned property, but I have sold many auctioned properties to my customers and some of them do face this kind of problem. The situation arises when the buyers bought the property at a cheap price, yet they failed to visit the property which they bought prior to the purchase, so they were not aware that some of these auctioned properties are still occupied by the previous owner.


For serious investors, it is better to invest short term in properties. Azalea says, “Under the Real Property Gain Tax (RPGT) Act, you are entitled to pay RPGT if you sell your property within 5 years. But if you buy newly launched properties from a developer and you are given a rebate, the rebate given will not be shown in the agreement, therefore they will still use the purchase price announced originally as the selling price.

Let’s say the purchase price is RM800,000, after rebate maybe about RM700,000, but in the agreement the price is still stated at RM800,000. So after the completion, maybe there will be an appreciation of about 20%. When you sell the property, you have already earned the rebate of RM100,000; even after paying 30% of price difference as RPGT, perhaps you could make a profit of RM200,000. With such a profit, you can save the money or look for another property to invest in!”

Azalea also encourages her son to buy some properties, especially for retail outlets and agricultural land. “Whichever project we are investing in, we must study the details first; for retail outlets, we must make sure that they have a good location, with many facilities around, because we are aiming for a higher appreciation, and it will also fetch a higher rental too. I think for commercial properties, is best for it to be located near schools or colleges, because there will be where the consumers with higher spending power are,” Azalea shared. 


For the challenging year ahead, Azalea advises all investors to consider buying new properties directly from developers, as they offer many attractive packages to customers, such as lower booking fees, zero down payment and even special rebates. On top of that, some developers also offer free Sales and Purchase Agreement (SPA), and buyers may enjoy a loan tenure of up to 35 years.

“If you invest your money into the shares of a company, it does not guarantee you high returns but if you were to invest in properties, even with the shrinking exchange rate due to global economic slowdown, your investment in properties would have at least provided you some savings for the future, say for example RM500,000. Of course you will also have the option of putting your funds into a fixed deposit (FD) where the interest rate is between 3% to 3.5%, but I feel it is better to invest in properties as it will not face any depreciation, unlike branded cars which will depreciate the moment it leaves the dealer’s showroom, so it is better to invest in property,” concludes Azalea with a smile.

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