Lowyat.NET: Latest topics by Hofmann33

STRA Regulations

Hofmann33 — Sat, 21 Jan 2023 16:15:02 +0800

Looks like MyBHA wanna kpkb again about STRA regulations - https://www.msn.com/en-my/news/national/imp...els/ar-AA16xJMn

The association is also concerned about Airbnb’s impact on the budget hospitality industry. One of the main concerns is that they say, Airbnbs are not subject to the same regulations and taxes as hotels, giving them an unfair advantage. This can make it difficult for budget hotels to compete with the low rates offered by Airbnb hosts. Furthermore, many Airbnb hosts are not registered or licensed as hotels and have the same safety and quality standards as hotels. The association argues that it is not a target for tourists and may cause concern for travelers.
Another concern of the association is that Airbnb could contribute to an oversupply of accommodations in some areas, leading to lower room rates and lower occupancy rates for budget hotels. This can make it difficult for budget hotels to operate profitably and reduce the quality of service they provide.

Have we not heard these same cries before however?

It sounds so reminiscent of the early days of Grab and the taxi driver crying foul.

The same rhetoric is being applied here.

The question is why?

It is a concern of services by the customer on where they can get their best value for their money and if it is shifting away from budget hotels because there is a better alternative providing more value, the market is telling us all something – one option is failing to adapt and rise to meet the changes taking place in the industry.

Isn’t this the same reason Taxi services are now so much better than they were before? I’m sure we all don’t miss pulling a taxi over to tell them your location and then see them drive off because you didn’t agree to their off-meter rate or you didn’t happen to be going where they wanted to.

If you think about your last budget hotel experience and your last Airbnb experience, which one was better? Was it like your last taxi ride before Grab came into the picture?

I’m sure majority of us would have far better memories at our Airbnb, I certainly do.

If the rise of Airbnb and Grab are paving the way for better customer experiences another option for inbound travelers into the country, it needs to be seen as something that is good. Old ways of business need to evolve and adapt to meet these new challenges in everyone’s favourite new-normal.

Why not say, “What can we do better?”, “Why are more young people keen on Airbnbs instead?”, “What can we offer to be more competitive?”. “What have guests been saying about my hotel?”

Stop thinking like a dinosaur and remember how it was when you were the radical, fighting to build your business. Look within and let the answers reveal themselves to you. Evolve and bring something new to the table. Budget hotels still do exist around the world just like Taxis. There’s enough market share for us all so long as we just keep striving to all do better for our guests.

https://blog.rentandreturns.com/question-to...evolve-instead/

Save Money on Furnishing Tips

Hofmann33 — Sun, 14 Apr 2019 15:51:33 +0800

Hi all, just made a post on some great things to look out for when furnishing your new apartment to save some money.

And also some things to ask these furnishing companies to see how legit they are - Ask them questions like:

Do they have a portfolio?
How long will it take?
Do they have a registered company?
What are the payment terms?
Do they charge for conceptualisation?
Can you include your own furniture?
Are there any hidden costs?

You can check out the full post here - https://blog.rentandreturns.com/how-to-avoi...and-renovation/

Budget 2019 Property Related Items

Hofmann33 — Wed, 14 Nov 2018 23:37:29 +0800

Would like to give everyone my take on the 2019 Budget for property related items and help give a clear and detailed understanding of all of the property related items included in the budget and what i feel we can expect with the upcoming changes mentioned in the budget.

In order to try to slow or prevent a property market crash the new Malaysian government Pakatan Harapan has decided to make a variety of amendments to existing housing policy.

According to the latest 2019 budget:

1.Companies, non-citizens and non-PR holders, real property gains tax will be increased from 5% to 10%. While for citizens and those with PR, real property gains tax will be increased from 0% to 5% even after the first 5 years.
2.Stamp duties for property transfers worth more than RM1mil will be raised by 1 percentage point from 3% to 4%.
3.Real Estate and Housing Developers’ Association Malaysia (Rehda) agrees to reduce house prices as much as 10% for houses which are not subject to price control for new projects.
4.Fall between 5% and 10% following the Sales and Services tax (SST) exemption on construction services and building materials.
5.First-time homebuyers get an exemption on stamp duty for properties priced between RM300,000 and RM1 million, for a limited period of six months starting Jan 1, 2019.
6.First-time homebuyers will get a stamp duty exemption on sale and purchase agreements as well as loan agreements of up to RM300,000 for a period of two years until December 2020.
7.Bank Negara will be setting up an RM1 billion fund to finance the first house purchase for those with a monthly income not exceeding RM2,300.
8.Introduction of FundMyHome Crowdfunding Scheme

What does all this mean for property investors?

Let’s take a look at the changes one by one and see what the possible implications are for the property sector in 2019.

RPGT Increase

Firstly, let’s tackle the elephant in the room – The increase in RPGT.

Well, it isn’t the best news, it means that it’s going to be significantly hamper profits from selling properties. Prior to Malaysia’s Budget 2019, it was possible to avoid your property sale profits getting smashed by RPGT by simply holding on to the property for at least 5 years before selling it off.

This meant that only ‘flippers’ were affected by this policy. The new ruling however changes this.

Property sale profits will now be slashed by 5% across the board regardless of whether you keep it for 5, 10 or even 20 years – At least for the moment anyway.

This means that if you experience gains from your property sale of RM100,000, you will have to pay the government a relatively small sum of just RM5000. It’s not all that bad until you make considerably larger gains on your property sale – a profit of RM500,000 would see you having to cough up RM25,000.

In all honesty, this isn’t as big a deal as people are making it out to be and really only affects those making huge gains on their property sale. A 5% reduction in the profits is not life changing.

Another thing to remember is that the Malaysian Budget is a yearly change and that means that even though the new RPGT is fixed at 5% indefinitely, it will also be subject to review each and every year depending on how the property market is going.

The new Pakatan Harapan Government seems to be very focused on assisting the B40 group (Bottom 40% of income earners) in the country. This is a good thing. There are still many opportunities to be had for those outside this group and by improving the lives of the nation as a whole will only be more beneficial to everyone in the long run.

Stamp Duty Increase

Of the 2 increments in property taxes (RPGT and Stamp Duty) described in the Malaysian Budget 2019, increasing the Stamp Duty price for properties over a million ringgit is probably the more painful of the two.

A 1% increase in Stamp Duty for a RM1,000,000 property will work out to another RM5,000 if they still keep the tiered tax system that they have in place.

Based on a RM1,500,000 Property:

Stamp duty Fee 1% : For First RM100,000 = RM1000

Stamp duty Fee 2% : RM100,001 To RM500,000 = RM8000

Stamp duty Fee 3% : RM500,001 to RM1 million = RM15,000
Stamp duty Fee 4%: RM1 million to RM1.5 million = RM20,000

Total: RM44,000

Compared to this being pre-budget:

Stamp duty Fee 1% : For First RM100,000 = RM1000

Stamp duty Fee 2% : RM100,001 To RM500,000 = RM8000

Stamp duty Fee 3% : RM500,001 to RM1.5 million = RM30,000

Total: RM39,000

I am not sure if this will be the structure moving forward but as you can see, it is also not a very extreme measure. Property buyers will definitely feel a slight burn here, but I am certain that average purchasers buying property over a million ringgit will be able to bear these costs without too much concern.

Those who will feel the brunt of the burn are those buying luxury properties above RM3 million ringgit.

First Time Home Buyers Stamp Duty Exemption

This is the best thing about the Budget 2019 for property related items. A waiver for property stamp duty for first time buyers on properties priced between RM300,000 and RM1 Million is huge! It’s so much better than even their My Deposit Scheme which ran earlier in the year.

Taking the median property price in this range at RM650,000, let’s see how much savings a first time home buyer will actually be getting:

Stamp duty Fee 1% : For First RM100,000 = RM1000

Stamp duty Fee 2% : RM100,001 To RM500,000 = RM8000

Stamp duty Fee 3% : RM500,001 to RM650,000 = RM4500

Total = RM13,500

That’s a total of a whopping RM13,500 of savings! As property stamp duty is normally the main upfront cost for property purchases, this exemption makes buying a new house amazingly affordable to first time buyers.

The government has also said that it is going to waive loan agreement stamp duty and property stamp duty for properties below RM300,000 up to December 2020! So, this bargain will really help those buying affordable homes prices below RM300,000.

As Property Stamp Duty is normally paid in cash, it’s true out of pocket savings. This will definitely give the housing market some much needed CPR and breathe some new life into purchases to eat up that current oversupply.

The government has even given it a timed lifespan of just 6 months! This will make for an exciting first half of 2019 in the Malaysian property market. I foresee there to be a lot of property purchases in the first half of the year simply due to this policy.

REHDA 10% Reduction in Housing Prices & SST Exemption

REHDA has said that they will reduce new housing development prices by 10%. It has been mentioned in various news sources that they will be able to achieve this by working with developers to bring down the prices due to the SST exemption given to many building materials.

This will be only for new developments that have not begun construction yet. The reduction in price has only been made possible through the reduction in the cost of building materials.

Whether or not developers will be on board or if they will simply mark up their prices before reducing them is not known. I find it hard to see developer’s dropping their prices by 10% solely off the SST exemption in building materials.

As these will be prices on future developments which are normally already priced at future prices, there will really be no way to say for sure if the prices (once they are made known to the public) for these projects have been actually reduced.

RM1 Billion Financing Fund for Low End Income Earners

Finance Minister, Lim Guan Eng has shared along with the 2019 budget that a new fund will now be set up to help low income earners with monthly income less than RM2,300 to be able to purchase homes priced up to RM150,000.

The new fund will be available from Ambank, CIMB, Maybank, RHB and Bank Simpanan Nasional at the amazingly low rate of just 3.5%.

Considering everyone else who is buying their homes is getting their loans at abut 4.45%, this is almost a whole percentage point less and when it’s almost a quarter off the average interest rate, it’s basically a 25% discount on your home loan interest!

Lim Guan Eng has said that the fund will last for a period of 2 years or up until the fund runs out. It’s most likely to run out way before the 2 years as there’s so much affordable housing still available from the current property oversupply and many will be looking to use the opportunity to get their first home.

FundMyHome Crowdfunding Scheme

The new FundMyHome scheme owned by Edgeprop has been touted as the solution for those who are having a difficult time keeping up with property loan repayments, thereby giving them the option of ‘simply’ coming up with 20% of the value of the home and have the remaining 80% paid off by investors.

Something about this scheme right off the bat doesn’t seem to make much sense.

As a property investor myself, I find it difficult to come up with even 10% for a sub-sale down payment and am always looking for delicious rebates from developers to help me build my property portfolio instead of coughing up such a large chunk of cash.

If I did have that much capital to spare, I honestly don’t think I’d have any problem paying off my monthly instalments.

Diving deeper into the scheme, you’ll soon find out that if you were having problems keeping up with your loan repayments and somehow managed to get 20% cash to pay for your down payment, this is definitely not something that’s for you.

Fintechnews.my wrote up a brilliant article – here - https://fintechnews.my/18957/fintech-lendin...t2019-edgeprop/, that goes over all the nitty gritty details of the scheme showing that it is actually more of a high-end investor scheme rather than a home ownership scheme.

Here’s an excerpt from the article:

“The scheme will put your 20% into a trust account that will be used to pay off the annual 5% investment return to the investors for five years.

During those five years, you’ll be able to live in the house without the need for rentals or repayments. After five years, you’ll have the option of either divesting your share of the home or getting a mortgage to own the rest of it.

But here are some things to note:

If you choose to go the mortgage route in 5 years, the prices are based on the current value of the house. If it has appreciated, you’ll be looking at paying much higher for the 80% of the house you don’t yet own, at least according to the below figure provided by FundMyHome in their FAQ.

Similarly, if you choose to divest, it will be at the price of the property at the time. So, if the property has appreciated, you’ll have made a profit on the home but if it has depreciated, you will have made a loss. The same risk is borne by your investor.”

As you can see, you’re hardly the home owner through this scheme, it simply didn’t make sense to me the first time I read it and after finding out more, it has become clearer on what it’s actually intended to do.

The article also did mention that it is quite likely that there will be changes made to the scheme considering all the scrutiny and bad press from their initial poor marketing of the scheme.

A Thriving Property Market in 2019

Pakatan Harapan has come up with some clever ways to breathe new life into the property market next year by keeping investors and first time home owners interested in the market with some very attractive deals.

They have structured their policies in a way to discourage flipping of sub-sale properties and encourage property buyers to look to absorb the balance properties from the current oversupply instead.

It’s very interesting to see how things will play out and if the market will truly be receptive of their new policies and attempts to solve the property oversupply issue. We hope my Malaysia Budget 2019: Property Sector Review has enlightened you on all upcoming investor property matters mentioned in the budget. As to what exactly the impact will be in the market, my guess is as good as yours, but I have a inkling feeling that it will make for a very exciting and vibrant property market in the coming years.

Let me know if I've got anything wrong or if you guys have anything to add.

The Malaysian Property Market Under Pakatan

Hofmann33 — Thu, 31 May 2018 11:19:02 +0800

Hi all,

Had a look at the property related items in Pakatan's manifesto and dived a little deeper into them.

Let me know if you guys agree or disagree with me or what other thoughts you guys have!

https://blog.rentandreturns.com/malaysian-p...akatan-harapan/

Dual-Key Condo Units in KL

Hofmann33 — Sun, 15 Apr 2018 11:04:02 +0800

Hi All,

Am looking for dual key condos in KL as the title suggests.

Wondering if anyone knows of any completed projects which have dual key units available or projects that will be completed soon.

Best Area for Property Investment in Malaysia?

Hofmann33 — Fri, 23 Mar 2018 13:22:43 +0800

Hi all!

Interested to find out what you guys think about the future of the Genting Highlands developments as property investment gems.

Here's my analysis and take on the area and why I think it has so much potential.

https://blog.rentandreturns.com/best-area-f...aysia-for-2018/

Let me know what you guys think! Curious to hear your opinions.

The 5 Property Taxes in Malaysia

Hofmann33 — Thu, 15 Mar 2018 21:21:36 +0800

Hi everyone!

Been working on creating a wholly inclusive Malaysian Property Tax Guide.

Let me know if i've missed anything out or if any of you have info to add so I can improve it!

https://blog.rentandreturns.com/property-ta...complete-guide/

Hope you guys find it useful!

Airbnb Earnings in Malaysia

Hofmann33 — Tue, 20 Feb 2018 15:59:53 +0800

Hi All, did a writeup on Airbnb earnings in a few of the popular locations in Malaysia here - Airbnb in Malaysia : From a Property Investors Point of View

Let me know if there's any discrepancy with your own earnings compared to the data.

Would like to see if there's any variation from the information provided from actual accounts of you guys here.

Any other comments also are welcome.