Secrets of Singapore Property Gurus.pdf

8/18/2019 Secrets of Singapore Property Gurus.pdf

1/205


2/205

Secrets of SingaporeProperty Gurus

Finally… the Experts Reveal Their Top Tips

to Making Millions in Property Investing

Mr. Propwise, Propwise.sg


3/205

Aktive Learning

10 Anson Road #21-02

International Plaza

Singapore 079903

E-mail: [email protected]

Web site: http://www.aktive.com.sg

Copyright © 2011 by Aktive Learning

All rights reserved. No part of this publication may be reproduced,

stored in a retrieval system, or transmitted, in any form or by

any means, electronic, mechanical, photocopying, recording or

otherwise, without the prior permission of the publisher.

ISBN (Paperback) 978-981-08-7891-7

ISBN (E-book) 978-981-08-7892-4

National Library Board, Singapore Cataloguing-in-

Publication Data

Propwise, Mr., 1980-

Secrets of Singapore property gurus / Mr. Propwise. – Singapore :

Aktive Learning, c2011.

p. cm.

ISBN : 978-981-08-7891-7 (pbk.)

1. Real estate investment – Singapore. I. Title.

HD890.67

332.6324095957 -- dc22 OCN696694642

Printed in Singapore


4/205

ContentsIntroduction x

PROFITABLE INVESTMENT STRATEGIES

FOR TODAY’S MARKET

Rayney Wong

Lawyer, Property Investor and Bestseller Author 2

Investment strategies for the current environment 4

How to time your entry in the property market 4

The benets of forming a company as an

investment vehicle 6

Reasons to enter into a property sharing agreement 7

“Must do” property buying due diligence 8

The biggest mistake property investors make 9

Do residential or non-residential properties make better

investments? 10

How to ip a property for a quick prot 11

My personal investment philosophy 12

My worst property investment 13

Getty Goh

Director, Ascendant Assets Pte Ltd 15

Two key trends that will drive the property market 18

Is property investment a good idea in today’s market? 19

Whether new or resale properties are better investments 20

Is there a right way to structure a property deal? 23


5/205


6/205

Trends we are seeing in the market 51

Online tools to help investors search for properties 52

The best way to nd an attractive property to buy 52The most promising projects and areas 53

Two golden tips for mortgage loans 54

Asian commercial property market outlook 55

Finding a reliable property agent 55

How PropertyGuru ensures the reliability of its site 56


My property investment stories 57

Kelvin Fong

Team Leader, Powerful Negotiators 59

Impact of the fourth round of measures and

prperty price forecasts 62

Should buyers go ahead with their purchase

despite the measures? 64

Should sellers sell their property now or

keep holding on? 65

How to nd the right agent for you 66

How to make money in Singapore property 68

The best time to buy and sell property 70

Mistakes novice investors make 73

Promising areas and projects buyers should focus on 74

Negotiating tactics for buyers 75

How owners can maximize their selling price 76

Do residential or commercial properties make

better investments? 77


7/205


My experience investing in property 80

SMART PROPERTY FINANCING

Dennis Ng

Director, Leverage Holdings Pte Ltd 83

Are banks still willing to do property lending? 85

Is it easier to get rich investing in stocks or properties? 85

When an opportunity presents itself… 90

My top property nancing (and renancing) tips 90

How to maximize your chances of getting a loan 95

How quickly should property owners pay off their loans? 95

Should you get mortgage insurance? 100

Why is Money Always Not Enough? 101


The worst and greatest property investments

I have heard of 102

Alfred Chia

CEO of SingCapital Pte Ltd 105

My biggest concern on the property market 107

Long term outlook on property in Singapore 107

The importance of proper asset allocation 108

Finding a protable property 109

Top tips for nancing your investment property 110

How to maximize your chances of getting a loan 111

When should you take a home equity loan? 111

Is home insurance necessary? 112


8/205


The promise (and pitfalls) of property investing 114

AVOIDING LEGAL PITFALLS AND

OTHER MISTAKES

Amolat Singh

Partner, Amolat & Partners 117

The role of a conveyancing lawyer for the seller

and buyer 120

Does it matter which conveyancing lawyer you use? 125

The advantages of forming a company as a property

investment vehicle 125

Potential pitfalls of entering into a propertysharing agreement 126

Due diligence for the smart property investor 127

What a landlord should do to protect his interests 128

The biggest mistakes property investors make 129

Singapore property horror stories I have come across 130


Success in property investing – luck or timing? 133

Mark Chua

Partner and Head, Property Law Department,

Tito Isaac & Co LLP 135

How to nd a good conveyancing lawyer 138

Does the purchase process differ for residential,

retail, ofce and industrial properties? 139


9/205

The different ways property investment deals can

be structured 140

When should you set up a company to investin property? 140

What an investor should check before committing

to a property purchase 141

What landlords should check before renting to a tenant 142

How the recent government measures have

affected property nancing 143

The biggest mistakes I see property investors making 145

When the IRAS label may label you as a

“property trader” 146


HOW TO MAKE MILLIONS FROM

EN BLOC SALES

Karamjit Singh

Managing Director of Credo Real Estate

(Singapore) Pte Ltd 149Outlook for en bloc sales in Singapore 152

How the en bloc process starts 153

The common characteristics of en bloc properties 153

The top reason why an en bloc sale fails 153

The key factor developers need to have to buy

en bloc projects 154

The impact of changes in the en bloc legislation 154

How a property consultant such as Credo helps in

the en bloc process 155


10/205


11/205

x

Introduction

Introduction

If you look at the list of the Forbes 40 richest people in

Singapore, you will see many who made their fortunes

developing and investing in real estate. Or just look

around you – the average Singaporean’s wealth probably

comes more from the appreciation of his HDB at or

private property than from any other asset.

My point? Based on my experience and what I haveobserved, investing in property is the most common way

for the average person to build up a signicant amount

of wealth.

But if you want to invest you will constantly have to

grapple with the twin animals of greed and fear. Greed

and the desire to accumulate wealth drives us to takerisks in order to achieve a higher return, but fear of loss

holds us back from doing so.

It is perfectly understandable to be scared about

investing in property. You are making the biggest

purchase of your life, and are borrowing a large amount

of money to make this purchase.

And especially in the current environment where the

government has announced multiple rounds of measures

to control the market and prevent rapid price increases,

it might feel like a very risky thing to buy a property.

Wise investors will look at this situation from a different

perspective: For long term investors, the next one to two

years is likely to present you with a golden opportunity

to pick up a good property at a low price and make a lot

of money.


12/205

xi

Secrets of Singapore Property Gurus

Let’s not forget that any form of investing is made

riskier when it is backed by debt. The leverage cuts both

ways – while you can multiply your returns if prices goup (and that’s what many people focus on), you can also

lose more than you have if prices go down signicantly.

The best way to manage that risk is to be prudent when

you are buying, to do proper research on what you buy,

and to learn as much as you can about property investing.

The problem I’ve found is that there are very few good

and objective sources of information out there to help the

budding property investor. While a good property agent

is certainly helpful, a smart investor cannot rely solely on

what an agent says as he has an inherent conict of interest

– his goal is to get you to transact, as that is how he earns

his money. That might explain the amusing phenomenon

of how many in the industry will say that it is always a

“good time” to buy whether prices are going up or down.

That was one of the main reasons why I started

Propwise.sg, a Singapore property blog dedicated to

helping you understand the real estate market and makebetter buying, selling, renting and investing decisions

– minus all the hype and misinformation. You can nd

most of the basic knowledge you need to get started

there.

This book brings it up a notch. I’ve gone out to

interview the top experts in the property sector, and bring

to you their invaluable insights on how to make your

fortune investing in real estate. It would cost thousands

of dollars to get one of these experts to consult on your


13/205

xii

Introduction

property purchase – if you could even get access to

them. This book is split into ve sections to match the

specializations of these experts:• Protable investment strategies for today’s market

• Finding your ideal investment property

• Smart property nancing

• Avoiding legal pitfalls and other mistakes

• How to make millions from en bloc sales

I am amazed by how generously they have sharedwhat they know, and truly believe that you will become

a better investor and prot greatly if you listen carefully

and learn heartily.

To wisdom and beyond,

Mr. Propwise

P.S. Before you read further, go now to www.propwise.

sg/bookbuyer/ to get your free copy of my Singapore

Property Beginner’s Guide, Real Estate Buyer’s

Checklist, and other resources I have prepared specially

for buyers of this book.


14/205


15/205

1

PROFITABLE

INVESTMENT STRATEGIES

FOR TODAY’S MARKET


16/205

2


Rayney Wong

Lawyer,Property Investor andBestseller Author

Rayney Wong Keng

Leong, LL.B. (Hons.),is a lawyer, property

investor and author

of the bestseller

Secrets of Property Millionaires.

A lawyer by profession, he has been practising

Conveyancing and Real Estate Law for over 23 years. As his great passion has always been property

investment, he has over the years assiduously

acquired a wealth of experience and knowledge

on the “dos” and “don’ts” of buying and selling

properties.

A firm believer in life long learning, Rayney is always wi lling to share his vast accumulated knowledge

and business acumen with anyone possessing a

keen ear to listen and learn. Through conducting

countless seminars, lectures, and talks, Rayney

has enlightened bankers, real estate agents,

financial advisors, and members of the public on

the intr icacies of property investment. He has also

personally coached numerous real estate agents,

and on many occasions, saved them from more

than a few legal pitfalls.


17/205

3

“Never overstretch your financialcapacity. Buy only what you canafford to hold. You must have the

financial capacity to ride out the storm

in a weak property market, and beprepared to hold on to your property

for a few years.”Rayney Wong


18/205

4


Investment Strategies For The

Current EnvironmentThe property market is at an all-time high and new

record benchmark prices are set on a monthly, weekly

and often even daily basis. In the current bullish and

toppish market, property investors must be thoroughly

educated to make wise investment decisions. I have

always advocated the principle that if an investor isfocused on the downside risk in property investment,

the upside prot will take care of itself. Each property

that an investor wishes to acquire must meet stringent

property analysis criteria.

A range of investment strategies will have to be

applied on a case by case basis. Using private limitedcompanies as an investment vehicle is advantageous,

and could result in a substantial increase in Return On

Investment. Property sharing agreements allow investors

to pull together their nancial strength so they are not

stretched nancially as individuals. I will discuss these

strategies in detail later.

How To Time Your Entry In The

Property MarketMany property gurus and agents will always say:

“Anytime is a good time to buy.” I disagree. Buying a

property at the wrong time can cause a lot of nancial pain

and prove to be a long term burden for the uneducated

investor, especially if you buy the wrong property at the


19/205

5

wrong time (i.e. the peak of the market).

After studying the URA Property Price Index

carefully, I noticed a distinct pattern of property cycles(1993-1998, 1999-2004, 2005-2009, and the current one

that started in the second quarter of 2009). I have gone

through this analysis thoroughly in my book, Secrets of

Property Millionaires.

Basically my technique of timing your entry into the

property market is to buy properties only during certain“window periods”. This is when the property market just

begins to turn upwards (e.g. in the beginning of 1994,

1999, 2005, 2009) – those who bought at these times will

have handsome capital gains. Through timing my entry,

I have bought more properties during such “window

periods” than at other times.

Of course to know when the “window periods” occur

and what properties you should buy at what prices

during those times, you need to monitor the market and

be on the constant lookout for good buys and the rst

sign of recovery. There are two signals I look at: 1) The

prices of properties you are monitoring must have fallen

close to or below the previous transacted prices during

the downturn and bottoming of the market in the last

property cycle 2) A marked increase in the number of

property transactions is usually the rst sign of an upturn

and recovery in prices.

Protable Investment Strategies for Today’s Market


20/205

6


The Benets Of Forming A Company

As An Investment VehicleThe benets of forming a company as an investment

vehicle include:

1. All expenses incurred by the company in its

management of the investment property are

considered corporate tax deductible.These include maintenance fees, property tax, utility

bills, renovation, and even furnishings. However this

book is not meant to be a guide on tax laws – you must

seek the advice of qualied accountants to understand

the intricacies of the prevailing tax laws and regulations.

2. You can apply for your company to be GST

registered.

This makes sense especially if you purchase

commercial properties that require GST payment – this

GST will then be recoverable as GST reimbursements,

and is substantial at 7% of the purchase price.

3. You can enjoy tax benets

The Singapore corporate tax regime allows new

start-ups to enjoy tax exemption for the rst $100,000

of normal chargeable income for each of the company’s

rst three consecutive nancial years. Effectively, new

start-ups with a net income of $300,000 in each of their

rst three nancial years pay tax based on only $100,000

for each of their rst three nancial years (based on the


21/205

7

prevailing tax rate of 17%).

When buying with other investors, the benets of

forming a company include:1. The terms of agreement between the property

investors can be easily stated in the company

shareholder’s agreement

2. There is no big fear of a stalemate in the event

of death, bankruptcy, illness, unsoundness of

mind or inordinate absence affecting one of the

shareholders.

Property investment is a business to help you generate

prot and cash ow – you should not get emotional

about it and should run it as a business. That’s why I

recommend forming a company to do it.However, one practical challenge faced by a property

investment company is that of obtaining mortgage loans.

Bankers tend to look behind the corporate veil of the

company and conduct their due diligence on each of the

shareholders and directors. The credit rating and level of

experience of such individuals will determine both theapproval and quantum of the mortgage loans.

Reasons To Enter Into A Property

Sharing AgreementOne way to share the burden of having to pay huge

upfront sums of money towards property purchases is to

form property-sharing joint ventures. Each investor pays

a small sum of money (depending on their percentage



22/205

8


shareholding) to tap into big investment opportunities.

With a bigger investment budget, a group can also

bargain for better discounts in bulk purchase deals,or buy costly properties like a coffee shop or eating-

house with high rental returns. Even small buildings are

possible to buy.

Property sharing will also provide you with a greater

nancial safety net to cushion you from the ups and

downs of the property market. This will help you sit out

any lull period in a property cycle.

But before you do so, make sure all your partners

possess high integrity, and make sure you do not run

afoul of the rules relating to soliciting funds from the

public. Property investment is a business, and you canonly build a good business with honest people.

Property sharing ventures often take the form of

private limited companies, which I recommend unless

you are buying the property with a close relative. Despite

the hassle of legal procedures and operation costs, it is

worth it as forming a company will not only safeguard

your interests but also offer other benets.

“Must Do” Property Buying

Due DiligenceYou should always make the effort to nd out about all

the relevant details regarding a property, as well as its

seller(s). Never just believe what the agent says.

Important details to look out for include whether the


23/205

9

property is freehold or leasehold, its exact area, as well as

whether there are caveats or orders of court registered against

the property. Government plans for the area are also critical,such as whether there are road or drainage line reserves.

Certain zones require special caution as they may have

special government planning restrictions, including Geylang,

Changi, Serangoon, Balestier, Chinatown, Pasir Panjang and

Tanjong Pagar.

You can conduct some of your due diligence by doing an

online search (e.g. at www.inlis.gov.sg, www.lawnet.com.

sg, www.ipto.gov.sg etc), but consulting conveyancing and

property lawyers can save you much time and hassle. In fact,

getting professional legal assistance to go over the ne print

can save you from losing heaps of money should something

go wrong during and even after the sale.

The Biggest Mistake Property

Investors Make

The biggest mistake I see property investors making issuccumbing to greed and committing to properties beyond

their nancial capacity. This often happens during bullish

markets when buyers aggressively bid for properties, and

many investors boast of the huge prots they make ipping

or reselling properties.

I myself over-committed to properties during the epic

1995-1996 property boom, and when prices started to fall in

1997 I sold off some of the properties at depressed prices.

Worse, some of my co-owners started to default on their



24/205

10


commitment to pay the mortgage instalments, leaving me

to bear the burden. By 1998, most of my properties were

in negative equity, meaning the value had fallen below theoutstanding mortgage. During that time, I lived under the

shadow of foreclosure and bankruptcy. Fortunately in 1999

there was an upturn in the market and property prices started

to climb.

What I learnt from this great nancial loss was this lesson:

Never overstretch your nancial capacity. Buy only what you

can afford to hold. You must have the nancial capacity to

ride out the storm in a weak property market, and be prepared

to hold on to your property for a few years. Make sure you

set aside enough money for the incidental costs (stamp duties,

legal costs, GST etc) and have 12 months’ worth of funds to

pay for the maintenance, property tax and utility bills.

Do Residential Or Non-Residential

Properties Make Better

Investments?I have often been asked whether residential or non-residential

properties make better investments. My general assessment

is to buy residential properties for capital appreciation and

commercial and industrial properties for rental yields.

For example, I bought a 4-room unit in Martin Place

Residences off River Valley Close in the second quarter of

2009 at about $1,420 per square foot (psf). Within one and a

half years, the property appreciated to $1,850 psf, an increase

of more that 30%.


25/205

11

A month later a friend and I ventured to acquire a unit in

an industrial estate known as Eunos TechPark. The price

has not appreciated much but we have enjoyed the veryhealthy net rental return of around 9% over the last ve

quarters.

How To Flip A Property For A

Quick ProtThe quick sale of a property after obtaining an option to

purchase is often called a “ip”, so called because the entire

purchase and resale process can happen in a matter of days

and weeks. Expert property investors are often on the lookout

for such opportunities because they can get quick prots with

only a minimum outlay of 1% of the property price.

There are a few essential rules to follow when ipping:

1. All sellers of a property must sign the Option To

Purchase (OTP), and every seller must have the

capacity to sell.

2. The title of the property must be in order, i.e. thereare no caveats, order of court, or other encumbrances

preventing the sale of the property.

3. The OTP must be addressed to an individual, a

company, or a legal entity with the capacity to purchase

the property.

4. The words “and/or nominee(s)” must appear after

the name of the original purchaser that the OTP is

addressed to (this is critical).

5. The original purchaser, whose name is on the OTP,



26/205

12


will hand the original copy of this, together with a duly

signed nomination letter, to the nal purchaser.

To execute a ip, after you have paid the 1% option moneyand obtained the OTP from the seller, you market the property

aggressively and hope to nd another nal buyer within 2-4

weeks. The nal buyer will then pay you a prot (equal to the

difference between the purchase price agreed upon between

you and him, and the original purchase price) in exchange

for the OTP and a nomination letter nominating him to be the

buyer.

Note that if you ip under construction projects from

developers you will have to execute the sale and purchase

agreement and thus be liable to pay stamp duty, but if you ip

resale properties you do not need to do so.

A word of advice from me: ipping carries the risk of

forfeiture of your option money and liabilities, so rather

than being too greedy you should be exible when receiving

offers, and only ip during bullish markets.

My Personal Investment PhilosophyI can never over-emphasize the importance of nancial

prudence. In my network we carry out what is known as

“the stress test” – we ask ourselves whether we are able to

comfortably pay our monthly mortgage instalments in a worst

case scenario when interest rates skyrocket and mortgage

instalments increase. To make matters worse, our tenants may

leave and a suitable tenant may not be found easily. Rental

payments are not always dependable and we may have to go

without rental collections for months on end.


27/205

13


I allocate half of my investment funds to property and the

other half is invested in stocks, options, unit trusts, bonds,

commodities and currency. I do my own analysis for all myproperty investments, but for the other asset classes I also

listen to the advice and recommendations of the experts in

those elds (such as my stock broker or private banker).

My Worst Property InvestmentIn my book Secrets of Property Millionaires (published in

the second half of 2010), I illustrated the many mistakes I

had made in my property investment journey. They were

costly mistakes and I had learned to spot the tell-tale signs of

possible pitfalls.

In 1996, I purchased three semi-detached houses at LimauGarden, each costing $1.8-1.9 million. Though those houses

only had 99-year leases, they were part of the prestigious

Kew Vale collection of landed properties sold by Kew Park

Pte Ltd. I thought the houses were a bargain, as I obtained

them at bulk purchase discounts of up to 18% off their listed

prices. The land area for each of the three-storey split-level

houses was decent at approximately 2,800 square feet, with

huge built-up areas of about 3,770 square feet.

Back then, it seemed like a great buy. However, as it

turned out I had bought the three houses close to the peak of

the 1993-1998 property cycle.

Two years after the purchase, the economic downturn hit.

Rentals for each semi-detached house plummeted from about

$7,000 per month to a low of $2,600. Despite this, I held on

to all three houses. Surely the prices would recover one day.


28/205

14


Another year later, in 1999, I sold one of the houses at

$1,225,000 taking a loss of $655,000 on that unit. It was

indeed a very painful decision. Unfortunately, I had littlechoice but to dispose of the house at this depressed price as

the property market was worsening by the day. I had sold in

a buyer’s market, in the hope that with the reduced liability

I could hold on to the other two properties until their prices

recovered.

The next property boom came in 2007. I nally sold myremaining two semi-detached houses at $1.2 million each.

Despite having sold at what was supposedly a peak, my total

loss on both houses amounted to slightly over $1.3 million!

Prices had simply not recovered even after a holding period

of more than 11 years. Had I held on to the houses till today,

the prices might have increased marginally to just touch the

$1.5 million range. This would still be a far cry from the over

$1.8 million I paid per house in 1996.

To sum up this hard lesson learned, I had bought the wrong

properties at the wrong time – a sure formula for the typical

property investment disaster.


29/205

15

Getty Goh

Director, Ascendant AssetsPte Ltd

Getty Goh is the

founder of Ascendant Assets Pte Ltd, a

real estate research

and investment

consultancy that specialises in

providing research and analysis on the Singapore

property market. Getty graduated from the NationalUniversity of Singapore’s (NUS) Faculty of Building

and Real Estate (now known as School of Design

and Environment) with an Honours Degree in Building,

and is presently pursuing a Masters degree in Real

Estate from NUS.

In September 2008, Getty launched his first bookentitled Buy, Bye Property: Mistakes you want to

avoid in Property Investing, which made the Times

Bookshop Bestseller List in November 2008. Getty

has also written articles for Property Report Magazine,

MediaCorp’s MOCCA.com as well as Propertyguru.

Getty conducts seminars to help consumers better

understand the property market. He has been invited

by SMART Investment and International Property

Expo 2009 as well as Singapore Press Holding’s

RazorTV to share his insights on the Singapore


30/205

16


property market.

Ascendant Assets Pte Ltd focuses on helping its

clients make informed property investment decisionsby providing research and statistics. Its core

strength lies in customising solutions and providing

timely advice that adds value to a client’s property

investment decisions. Since its establishment in

2008, Ascendant Assets has lent its expertise to a

wide variety of clients, ranging from corporations andinvestors to even home buyers.


31/205

17

“I believe that just one or twocorrect investments are enough tomake a significant difference to ourfinancial status. Hence I am very

selective with what I invest in and would rather wait fora good deal to come along than chase

investments that may notbe worthwhile.”

Getty Goh


32/205

18


Two Key Trends That Will Drive The

Property MarketBased on the URA Price Index, we are presently

experiencing a decline for non-landed residential

housing; on the other hand, prices for landed properties

have been observed to be increasing. This indicates a

gradual shift in buyer prole and we believe that local

buyers are fuelling the growth. At this juncture, I mustqualify that property trends are dynamic and change

from time to time. Hence, what is applicable today may

not be the case tomorrow.

Conceptually, property prices are the result of various

market stimuli (e.g. government policies, interest rates,

liquidity, etc.). If the expansionary forces (e.g. ampleliquidity, increase of property demand, low interest

rates, positive market outlook, etc.) are stronger than

the contractionary forces (e.g. government intervention,

increase of property supply, uncertain market outlook,

etc.), prices will shoot up. The reverse will happen if the

expansionary forces are weaker than the contractionary

forces.

Going forward, I believe that there are two key trends

that will dene the Singapore property market. The rst is

the ample liquidity in the Singapore market. In 2008, the

Monetary Authority of Singapore (MAS) reported that

the amount of savings and other deposits in Singapore

was in excess of $100 billion. Putting things into

perspective, this was twice the amount that Singapore

had after the Asian Financial Crisis. The following year


33/205

19


(2009), this amount went up to about $120 billion.

My company uses savings and other deposits as a

proxy for liquidity within the real estate market as theyrepresent monies that can be used for property deposits.

They are also used as an indication of interest rates as there

is an inverse relationship between liquidity and interest

rates – the more liquidity the economy has, the lower the

interest rates will be. With the U.S. government printing

more money and the limited investment opportunities in

many Western countries, it does not come as a surprise

that the asset price appreciation is funded by monies

owing into Asia.

The second key trend is the Singapore government’s

response to the property market. From the series ofanti-speculation measures, there is little doubt that

the government is closely monitoring property price

movements and is ever ready to take steps to cool an over

exuberant market. Thus, I will be looking at these two

factors to forecast how the market will be performing

over the next few months.

Is Property Investment A Good Idea

In Today’s Market?Before I answer this question, I think it is important

for property investors to be clear about what they hope

to achieve. Clearly, the days for quick and signicant

capital appreciation are already behind us. When I was

helping my client to source for good deals in late 2009,


34/205

20


there were quite a number around. Those who proceeded

and made their purchases then (like some of my clients)

will be comfortably sitting on prots of a few hundredthousand dollars.

In 2010, prices have appreciated signicantly and the

URA Private Property Price Index (PPPI) for 2010Q2

exceeded the last peak set in the 1990s. Thus strategies

for capital appreciation are not really appropriate in the

current environment.

Personally, I think that a prudent investor should not

be entering the market right now as value-for-money

deals are limited and extremely hard to nd. They should

wait for the next down cycle to enter the market. It is

important to remember that the market is cyclical and acorrection will almost certainly happen after period of

strong growth. Looking at how much property prices

have increased, I would urge investors to think twice

before jumping onto the bandwagon. Although some

investors may have missed this round’s property bull

run, there will always be the next one to catch.

Whether New Or Resale Properties

Are Better InvestmentsBased on the research my company has done, we found

that buyers will have a higher chance of getting value-

for-money deals by buying resale properties. If you think

about it, it is actually quite intuitive. After all, developers

are in the business of selling properties for prots. With


35/205

21

many of them having ample nancial reserves, how

cheaply do you think they will sell their new units for?

Resale properties on the other hand are bought fromother owners, who can be selling for a variety of reasons.

While some of the homeowners may be savvy investors,

there will denitely be others who need to dispose their

property urgently and are prepared to sell their unit at a

discount.

I have personally come across numerous value-

for-money deals. Let me share one such deal that my

company helped a client secure. In late 2009, I was

helping a client nd an investment property. As he did

not want to over-stretch himself, the investment budget

was set at $700,000. After several weeks of searching,

we eventually found a suitable unit that was going for

$650,000. Based on my company’s research, we knew

that it was a good deal as the asking price of similar

sized units in the same development was about $100,000

more than the asking price for that unit. In addition, we

found out that the seller was parting with his propertyfor a loss of more the $50,000. All these were indications

of a value-for-money unit and we were condent that

my client would have easily made a tidy prot had he

decided to ip the unit.

We later found out that the owners were willing to

let the unit go at a discount because they were going

through a divorce and wanted to quickly divide the

assets. From this experience, it reafrmed my belief that

there are plenty of good resale deals. It is just a matter of



36/205

22


how diligent we are in our search to nd them.

That said, I am not implying that buyers should

totally avoid new sales as there are advantages to buyingproperties direct from developers. Firstly, when someone

buys a property directly from developers, they will be

entitled to a one year Defects Liability Period (DLP)

that starts when the development receives its Temporary

Occupancy Permit (TOP). During the DLP, any defects

found will be rectied by the developer. Resale unitsdo not have such liability periods and buyers will have

to rectify any defects at their own expense.

Another advantage in new sale purchases is that

buyers generally are able to choose the unit they

want. However this is dependent on how buoyant the

property market is at that point in time. Nonetheless,

under normal market conditions, buyers are able to

select the units they desire.

Lastly, payment schemes for new and resale

purchases are different. New sale buyers can opt for a

progressive payment method, while resale buyers will

have to start serving their mortgage based on the full

loan amount after the sale is completed. While there

are pros and cons for new and resale properties, I feel

that resale properties will be a better bet for those who

are looking for value-for-money deals.


37/205

23

Is There A Right Way To Structure A

Property Deal?I think a key misconception with deal structuring is that

there is one right way to do it – in reality there is no xed

way. In my course of work, I have structured deals for

clients as well as for my own investments, and I found

that the most “ideal” way to structure any deal is in a

way such that everyone is satised with the outcome.It is about nding a “win-win” solution for all parties

involved.

I know there are currently seminars in the market that

teach people how to invest in properties with an investor

network as the main selling point. The value proposition

behind such seminars is for people to come together tond suitable property investment partners. Intuitively,

such an approach may appear workable. While I am

sure some of these courses do impart useful knowledge,

I have reservations on the network aspect – not because

they do not work, but because they over-simplify a

process that is actually quite risky.

For example, what if the other person whom you

co-invest with wants to get out of the deal halfway?

Or worse still, what if he becomes a bankrupt and the

property is seized to repay his debt. If that happens, you

may not be able to get your capital back as there could be

others (e.g. banks) that have priority over the proceeds

of the sale. Even if you are able to eventually get your

money back, imagine the trouble and uncertainty you

have to go through.



38/205

24


Professor Harold Tan, one of the lecturers for the Real

Estate Masters Programme I had taken at the National

University of Singapore, once said: “Joint ventures arelike marriages – you should be careful who you get

involved with.” Hence, I would be more at ease with

investing large sums of money with family and close

friends instead of people whom I do not know well.

Do Residential Or Non-Residential

Properties Make Better

Investments?This is a very common question I get from my clients.

Some of them think that commercial and industrial

properties are more worthwhile investments, especially

when residential properties become too expensive. I do

not really agree with this perspective. Different types

of properties have different characteristics – some have

better rental yield while others have more potential for

capital appreciation.If you are looking for rental yield, I would agree

that non-residential properties tend to give higher rental

returns. This is because most non-residential properties

are leasehold properties with only 30 or 60 years lease.

Due to the shorter lease, the purchase price of non-

residential properties is naturally lower as compared

to residential properties that are freehold or have a

99-year lease. However, if you are looking for capital

appreciation, I believe that residential properties are still


39/205

25

a better bet.

Based on the number of property transactions for

the rst nine months of 2009, we found that residentialproperties accounted for more than 90% of the total

transaction amount. From this information, we can

conclude that there is signicantly more liquidity in the

residential sector as compared to the non-residential

sector.

How Interest Rates Affect

Property PricesThere are many factors that can affect property prices

and interest rates are denitely one of them. However,

by looking at the correlation between interest rates and

property prices, we found that the relationship between

the two variables is not very signicant. In fact, things

like market conditions, employment rate, FDI and

location were found to have higher correlations with

property prices.

A possible reason for this is because investors have

accepted that interest rates will uctuate frequently as

many loan packages are currently pegged to SIBOR or

SOR rates. As a result, investors would have already

priced in interest rate volatility in their decisions to buy

a property.

Moreover investors know that they can always opt to

renance the property; as a result, interest rates tend to

have a lesser impact on their buying decisions. Thus, as



40/205

26


long as interest rates do not suddenly spike beyond what

is deemed reasonable, investors generally would not be

signicantly inuenced by interest rates.

Are Leasehold Or Freehold

Properties Better Investments?I used to believe that freehold properties were better

investments. However in recent years, I am starting

to have a paradigm shift and accept that leasehold

properties may be viable investments as well.

My company did some research for my second book

Buy Right Property to see if leasehold or freehold non-

landed properties were more protable and we found that

the proportion of protable leasehold units was almost

the same as their freehold counterparts. Conversely,

the proportion of leasehold units that made losses was

also almost on par with freehold units. From this simple

research, we found that tenure did not matter much and

leasehold properties could be protable too.I am also aware that some investors prefer freehold

developments due to their en bloc potential. Prior

to 2005, all successful en bloc deals were freehold

developments. However after 2005, there have been

successful en bloc deals for leasehold developments as

well. In fact, the rst successful en bloc deal involving a

leasehold development was Eng Cheong Tower in 2005.

Hence, there is equal opportunity for leasehold and

freehold developments to be sold en bloc.


41/205


42/205

28


fortitude during one of the extreme endurance races we

took part in together. In 2008, we participated in a seven

day run across the Gobi Desert. The total distance was250 kilometers, which is slightly more than ve times

the distance between Jurong to Changi. It was my rst

time taking part in such an event and my whole body

was aching by the end of the rst day.

During the rst dinner break, I met up with Kah

Shin and asked if his body was hurting. He told me in a

matter-of-fact manner that the run was painful for him as

well, however he was determined to complete the race

as he had set his mind to it. I followed-up by asking him

how he managed to push himself on despite the pain. He

shared that whenever he felt any pain, he simply took

painkillers and continued running – never stopping or

giving up. There was even a day when he had a bad case

of diarrhea, yet he continued running!

My point of relating this event is to highlight how

our philosophies towards life impact our philosophies

towards investments. I have little doubt that Kah Shinadopts a similar “never give up” attitude in whatever he

does (including his investments), hence it is little wonder

that he has accomplished so much at such a young age.

I have several personal philosophies that I believe

have an impact on my investment strategies. First, I do

not take what people say at face value and I would rather

nd things out for myself and reach my own conclusion.

So when someone tells me that a particular place has

good investment potential, I would go and personally


43/205


44/205

30


if I have understood what the market is trying to tell me

and if I have done my homework by nding a worthwhile

property to invest in. By adopting this perspective, allthe research I do and hard work I put in makes perfect

sense.

My personal investment philosophy is to be focused

on the things I am good in. As the saying goes: “Jack of

all trades, master of none.” Hence I would rather be good

in a specic area than good at nothing. Moreover, we areall gifted with different abilities and there are different

avenues of success for everyone.

Allow me to share a personal encounter with you. I

attended a stock and options trading course in 2005 and

was lled with illusions of attaining nancial freedom

through day trading. The notion of trading like a pro and

earning an income was very alluring. However, it made

me realize that short term stock and options trading was

not suitable for me. It was not about the actual amount

lost but the huge anxiety I felt whenever I traded. The

whole experience made me realize that trading was not

my cup of tea and I decided to call it quits after a year

of trying.

I do buy stocks from time to time. However, they

are more for long term investment and I hold them

for months and sometimes years instead of weeks or

days. Ultimately, I see stocks as another asset class

that, if correctly used, can complement my property

investments.


45/205

31

Finding Good Investment

OpportunitiesBuyers are sometimes pressured into jumping onto the

bandwagon out of fear that they would lose out.

During hot property launches, some buyers even

go to the extent of passing blank checks to property

agents in order to book any unit. I personally do not

believe in this and think that there will always begood opportunities; you just need to look a little

harder.

Let me share a personal investment story with you

to illustrate the case. In March 2010, the Singapore

property market was on the road to recovery. If you

recall, the media then was filled with news on howhot the property market was and the asking prices of

some properties had even exceeded the peak price

set in 2008. I had just sold my unit at Robertson

Quay for a profit of $400,000 and was looking to

reinvest my money. While I was concerned that I

may not be able to find another good deal, I took my

time to explore different possibilities and checked

out various sectors of the property market.

Eventually I managed to secure a conservation

shophouse which had an indicative bank valuation

of $1 million for about half the price. Had I decided

to flip this deal, I would have made a handsome

profit within a short period of time. This reinforced

my belief that there are opportunities even in a hot

market.



46/205


47/205

33

FINDING YOUR IDEAL

INVESTMENT PROPERTY


48/205

34


Mohamed

Ismail GafoorCEO,PropNex RealtyPte Ltd

LTC (NS) MohamedIsmail is the CEO

of PropNex Realty,

Singapore's leading

real estate agency.

With a Bachelor in Land Economics (Hons) from

the University of Technology Sydney, Ismail ownedhis first property at the age of 22 and made his first

million at 28. He is an investor, entrepreneur and a

success coach to many Million-Dollar Club Producers

in the Real Estate arena.

He has appeared on various media channels

across the region and has spoken at various seminars,lending his expert opinion to the public. His business

efforts have led to Entrepreneur of the Year Awards

from SMCCI (2004) and SICCI and ASME (both in

2008). PropNex’s professional brokerage services

have earned them an over 20% share in both the

public and private secondary residential markets,

while their in-house consultancy services also cater

to investment, en bloc, business space and other

property needs.

Formed in 2000, PropNex has nevertheless


49/205

35

established itself as a market leader, in turnover as

well as in setting and upholding service standards

in the industry. Besides working with partners toenhance their salespersons’ productivity and add

value to consumers, PropNex also launched several

initiatives to empower consumers.

From an in-house mediation board and mandating

professional indemnity insurance and continual

professional development to free seminars for thepublic, PropNex is the consumers’ trusted brand for

real estate.


50/205

36


“For investors who are serious aboutmaking money through property

investment, the Master Plan mustbecome your specialised eld of study,

since the growth potential of the region that you are investing in will have adirect impact on the rental yield and

market value of your property.”

Mohamed Ismail


51/205

37

Finding Your Ideal Investment Property

Trends I’m Seeing In The MarketToday’s interest rate of below 2% is still very attractive

for investors, whether local or foreign, which is good for

the industry as a whole and should help keep the demand

strong for property here.

The regulations from the Ministry of National

Development and the Housing Development Board

on 30 August 2010 and 13 January 2011 have led to

a dip in the number of HDB at transactions; as there

are greater restrictions, such as a cap on loans from

banks, higher minimum cash deposits and lengthened

Minimum Occupation Periods. The decreased demand

has led to a drop in the Cash Over Valuation levels:

which will help bring stability to the public housingmarket in the mid-to-long term.

On the private housing front, the mass market is

still going strong with price per square foot levels

maintaining high levels. There is some caution in the

high-end market however, mainly due to the cooling

regulations.

Impact Of The Fourth Round Of

Measures And Forecast For 2011I feel these latest measures on 13 January 2011 are a

little premature, given the previous round of cooling

measures came less than ve months ago; we would

not really have had sufcient time to assess the effects

of the previous measures on 30 August 2010.


52/205

38


The lower Loan-To-Value (LTV) ratio is expected

to psychologically cripple many investors’ minds.

Besides investors, many genuine HDB owners withan existing mortgage will nd it difcult to fork out

the 40% cash for a new property, especially if they are

upgrading to a condominium or other private property.

This is because HDB dwellers are mainly in the lower

to middle income groups. In fact, we know that there

were quite a few HDB dwellers who had already found

it difcult to move out of their existing at with the

previous 70% LTV cap.

As for the lowered LTV for companies to 50%, I

think this was introduced because many individuals

were incorporating companies to circumvent the

previously introduced lower LTV of 70%.

Basically, of the three measures announced, the

increased holding period for the imposition of Seller’s

Stamp Duty (SSD) is likely to have the least impact,

despite the dramatic increase of the SSD by over ve

times. This is due to the fact that, since the SSD wasintroduced on 30 August 2010, many investors were

already buying with a mid- to long-term view. If

anything, some of the (relatively) smaller investors will

buy private properties in the Rest of Central rather than

Core Central Region, as these would require a smaller

quantum to be locked in for the four years.

However, the greatest impact will not come from the

measures themselves, but from the short period of time

after the last slew of measures. The relatively short time


53/205

39


between the measures will probably reduce investor

condence and have them asking: What’s next?

In short, my forecast for 2011 would be a 5% to 8%growth for both the HDB resale and private secondary

markets. Breaking down the private property growth,

landed properties are expected to lead the way with

about 10% growth, with Rest of Central coming in

a close second at 8% to 10%. Mass market private

properties are expected to grow by between 3% and

5% with insignicant price movement for Core Central

properties.

How To Find A Good And Reliable

Real Estate AgentA good real estate agent adds value to the investor’s

assets through sound advice on property investment and

reliably facilitating an investor’s property investments.

He/she should be able to understand the needs of the

investor and match these needs to the most appropriateproperty for investment, thus helping them to achieve

their (nancial) objectives.

A professional agent can greatly aid you with his

or her expertise and knowledge, and thus protect your

interests. Besides arranging and coordinating the

viewings, they would also negotiate the price with your

best interests at heart.

Specically, the things a good agent will do for you

include:


54/205

40


• Marketing of properties, conducting of open

houses, publicising the property in the MLS

(Multiple Listings Service) and traditional andonline media

• Qualifying prospective customers to ensure that

they are able and ready to transact the deal

• Doing a Comparative Market Analysis (CMA) for

your property

• Acting as an intermediary in negotiations between

buyers and sellers

• Arrange for moving in, moving out, early

renovation, and opening of utility accounts for

tenants in rental deals

• Coordinating appointments with lawyers, bankers

and HDB resale ofcers

• Preparing all the necessary documents such as

Option To Purchase (OTP), resale application,

inventory list, letter of intent, and tenancy

agreement

• Facilitating the closing of the deal and witnessingthe signing of documents

• Doing the nancial calculation and computation of

sale proceeds for sellers, and checking the nancial

requirements for the buyers

One way of nding such an agent would be through

reliable company websites. But investors should also

meet up with the agent and ask him/her to make a

presentation to gauge his/her sincerity and knowledge,


55/205


56/205

42


should be wary of, as this may lead them to invest more

in a property that may not be worth that much in the

long-term. Some investors, for example, may invest in aproperty primarily because they used to live in the area,

or because there is a view of the sea in the distance, and

may pay more than necessary for that.

3. Getting greedy and stretching beyond their means

As for being greedy, property is a mid-to-long term

investment. One must not exhaust one’s nances when

investing as unforeseen events, such as a recession, may

lead to a need to hold on to one’s investment for longer

than expected.

Promising Areas For Property

InvestorsLanded homes in Singapore are a good bet as there is

always demand due to the scarcity of land. For strata

properties, projects in the Core Central and Rest ofCentral regions offer higher returns.

For investors who are serious about making money

through property investment, the URA Master Plan

must become your specialised eld of study, since the

growth potential of the region that you are investing in

will have a direct impact on the rental yield and market

value of your property. Sufce to say, a property situated

within an area of growth has higher chances of capital

appreciation and fetching a higher rental yield than one


57/205

43

in a matured estate where development is kept to the

minimum.

For example, in the past, the West Region wasshunned by many investors because of the existence of

many light and heavy industries in Tuas, which made

people feel that the air was less “pure”. But the Master

Plan has stipulated for the creation of the second largest

commercial hub, after the Central Area, at the Jurong

Lake district. With more than 50 hectares of vacant landavailable for development, Jurong Gateway, the area

around Jurong East MRT station, will provide about

500,000 square meters of ofce space and 250,000

square meters of retail, F&B and entertainment space. It

is thus not hard to see that many real estate investment

opportunities now abound in what was once a “less

preferred” area, thanks to the changes in the Master Plan.

Also, areas where new MRT lines are being planned

are worth taking a look at. Look at real estate that is

within 10 minutes’ walk to an MRT station. Due to the

ever-increasing costs of car ownership, owning a car

for its convenience has become less attractive to most

people. Thus, HDB ats near to MRT stations are very

valuable, and private condominiums and landed homes

near to these stations give better en bloc potential due to

the higher demand for such land sites, no matter how old

the property is.



58/205

44


Should You Buy An HDB Flat Or

Private Property?For investors who can afford private property, they

might not want to buy HDB as there are other restrictions

involved. Besides the lengthened Minimum Occupation

Period (MOP), they also have to realize that they will

have to sell any private properties they own overseas or

in Singapore. They will also not be allowed to sublet, orpurchase a private property locally or overseas.

My advice is to buy a mass market private property

instead. Even by buying a small private house, the idea

is to get a FOOTHOLD into the real estate market. By

not being bound by the ve year MOP, you will then

have the freedom to take advantage of the property cycleat any time.

Should You Do An Addition &

Alteration (A&A) Or Demolish And

Rebuild A Landed Property?If you want to buy a landed property, you need to rst

check that the existing structure of the building is in

sound condition, and that the foundation allows for

further extension. You can only do an A&A if these

two conditions are met, in order to transform the house

to meet your requirements instead of demolishing and

rebuilding. You might need to engage professionals such

as architects and contractors to assess the potential of the

house for you.


59/205

45

As long as the foundation and main structure is sound

for further A&A, it is always better to opt for A&A.

Besides the fact that it is probably cheaper, one willalso not be subject to restrictions such as the mandatory

inclusion of a bomb shelter. Also, any redevelopment

on an existing plot is subject to road line interpretation

that may require you to do a setback from the frontage,

thereby giving up a portion of the land.

For example, building a 4,000 square foot housefrom scratch with demolition costs thrown in will cost

you close to $1 million dollars. Just the new foundation

and piling will already cost $150,000 to $250,000,

depending on the soil conditions, which might require

different methods of piling. Doing an A&A to the existing

structure might only cost around $300,000.

Properties with the potential to do A&A are generally

landed properties with building structures equipped

with concepts that date back to 20 or more years ago.

You can then add value by focusing on modern design,

infrastructure, and incorporating technology such as solar

panels in the building to achieve a chic yet environmentally

friendly outcome. The façade of an A&A project should

not be altered by more than 50%, and is subject to approval

and conformance to statutory building guidelines.

More details on what you should consider when

deciding on an A&A property can be found in my

book, The Ultimate Guide to Real Estate Investment in

Singapore.



60/205

46


Investing In Commercial PropertyCommercial properties would be more for the higher

risk investor as while they generally yield higher rental

returns, they are also more volatile during economic

downturns.

For example, a retail outlet with a high rental yield

might experience a drop in rentals and returns if a large

shopping mall opens nearby and pulls away human

trafc. The value of retail property depends on human

trafc, as every retail business needs customers to

patronise and buy things – that’s how they survive and

pay the rent.

However, the prices of residential properties do not

uctuate as much as people are always willing to rent ahome at a reasonable price and the rental does not depend

on human trafc. In fact, low density residential estates

are favoured by many who prefer a quiet respite away

from the rush of the city.

For those interested in investing in commercial

properties, the key considerations are rental yield, and

how easy it would be to get another tenant in the event

the current tenant leaves.

How Propnex Ensures The Quality

Of Its AgentsWe are a rm believer in self-regulation and setting

high professional standards for our agents. Although

the government has only just mandated professional


61/205

47

indemnity insurance and continual professional

development for all salespersons, we’ve been doing that

since the second quarter of 2008 for all our agents. Thecompany is covered up to $5 million for professional

indemnity insurance, which is ve times the minimum

required.

Also, we have our own in-house legal counsel and

mediation board to settle any disputes or grievances that

our clients may have.

My Personal Investment PhilosophyMy philosophy on property investments: Do not

speculate on the short term; buy with a mid-to-long term

view, i.e. ve years and beyond. Also, buy within yourmeans in areas with good rental demand.

I am a rm believer in property as an investment so

that is what I focus on.

My Property Investment

Track RecordSo far, all of my property investments have made money

due to my buying principles of having a mid-to-long term

view. However one commercial property I bought with

my partner was sold after one week of ownership for a

$1 million prot. As for mid-term property investments,landed property that I purchased ve years ago has seen

a value increase of over $3 million.



62/205

48

Secrets of Singapore Property Gurus Finding Your Ideal Investment Property

Steve Melhuish

CEO, Allproperty MediaPte Ltd

Steve is a serial entre-

preneur with 19 yearsexperience building

businesses in Asia

and Europe. He co-

founded AllProperty Media Pte Ltd,

the owners of PropertyGuru.com.sg in 2006 with

his partner. Since then, he has helped develop theBusiness into the leading Singapore property media

used by 1.7 million users monthly, created LoanGuru.

com.sg (a popular online mortgage brokerage) and

most recently launched CommercialGuru.com.sg

(Singapore’s first commercial property portal). Steve is

the primary spokesperson for the Business, frequent

presenter at conferences and regularly interviewed in

the press on property and business matters. In 2007,

Steve was awarded the Spirit of Enterprise Award, in

recognition of his contributions to entrepreneurship in

Singapore.

PropertyGuru.com.sg is Singapore's leading

property site, used by over 1.7 million consumers

viewing 28 mill ion pages and generates over 150,000

leads for advertisers every month. The user-base

tr ipled in the last 12 months; mainly ‘mass affluent’


63/205

49

with 53% earning over $100,000 per annum and

32% owning two or more properties (source: Aktiv

Digital). The site provides real time access to multi-media rich content covering property and home-

related products, services, news, advice, guides,

tools and the largest online property database in

Singapore. It works closely with prominent real estate

developers in Singapore and overseas, over 20,000

housing agents, and home-related firms.


64/205

50


“The Asian commercial property marketis witnessing a bullish period as investors

are looking to buy properties either in their local market or in an overseas

market. The most desired locations forcommercial property investments over thenext twelve months are Singapore, Hong

Kong and Shanghai.”

Steve Melhuish


65/205

51


Trends We Are Seeing In The MarketThe following are the recent trends we’ve been seeing

in the market:

1. There is a growing preference for green ofce

space.

2. There is an increased interest in the luxury

market.

3. Commercial real-estate in the Asia-Pacic region

is heating up by the day, especially in the ofce

space.

4. Sydney, Hong Kong and Singapore are the most

sought after markets for investors.

5. Commercial REITs will be more popular now

as these are more liquid than their residential

counterparts because of their existence as small

units or shares. Also, equity analysts from various

research houses are wary of property stocks

with large exposure to the residential market as

they are concerned that the government could

announce more measures to cool the market.Moreover, since the outlook for the ofce market

in Singapore is bullish over the next two years,

commercial assets will be preferred.

6. The private residential market in Singapore

is getting a lot more attention from foreign

investors.7. We see a rise in demand for Executive

Condominiums.


66/205

52


Online Tools To Help Investors

Search For PropertiesOnline property portals such as PropertyGuru.com.sg

have made it easier for everyone, including property

agents and home buyers, to nd property information

and services quickly and effectively.

In fact, PropertyGuru offers the largest database of

properties in Singapore, with close to 100,000 listingswith property photos, videos, condo descriptions and

street maps offering detailed information like where

the nearest schools and MRT stations are. Whether

it’s landed homes, condos or HDB ats to rent, buy,

or sell, consumers can nd it quickly and easily on

the website.The site also provides real time access to multimedia

rich content covering property and home-related

products, services, news, advice, guides, tools and

the largest online property database in Singapore. We

work closely with prominent real estate developers in

Singapore and overseas, over 20,000 housing agents,

and home-related rms.

The Best Way To Find An Attractive

Property To BuySearching for properties online is one of the most

convenient ways to start looking for your dream

home. PropertyGuru provides a comprehensive

list of easy-to-use tools, which allow consumers to


67/205

53


search for their desired property. The website’s huge

property directory provides detailed information

about the property with photos, location information(via Google Maps), and virtual tours.

The property portal also provides services like

shortlisting and comparing properties, automatic

email alerts, auction news and details, industry news,

etc. If consumers need additional help in their house

hunting, they can consult PropertyGuru’s real estateagent members by using “Ask Guru” to enquire about

pricing, property laws, location etc.

The Most Promising Projects

And Areas1. Executive Condominiums (ECs)

Looking at the demand newly launched ECs have

had in the last quarter, we expect this trend to

increase further. ECs can be compared to private

condominiums in terms of facilities and amenities.

Buying requirements are also similar to that of new

HDB ats but those investing in ECs must have a

monthly household income not exceeding $10,000.

With the price being 20% to 30% lower than private

condominiums and a hungry market ready to invest in

ECs, PropertyGuru believes that the demand for ECs

is here to stay.


68/205

54


2. Private residential properties in Districts 4, 9

and 10

From an investment point of view, private residentialproperty is a better choice when compared to HDBs.

Properties coming up in Districts 9 (Central – Orchard),

10 (Central – Tanglin) and 4 (South – Keppel, Sentosa)

are promising. Sentosa is witnessing new highs with

the increased interest of foreign investors looking to

invest in luxury properties.

3. Jurong

Jurong is being developed into Singapore's second

CBD, which is expected to make properties in that

area more attractive as an investment. The new Jurong

Lake District is expected to attract billions of dollars

in development, for ofces, hotels, food and beverage

and entertainment uses.

Two Golden Tips For Mortgage LoansA home loan is a long-term commitment, so it is always

advisable to consider the stability of the interest rate

for the duration of the loan. According to LoanGuru.

com.sg, the two golden tips for home buyers are:

1. Since interest rates are at an all-time low, it is a

good time for existing home owners to renance

their mortgage loans.

2. For new home buyers, the current scenario is an

ideal one to lock-in xed rate loans. As interest

rates are at a historical low, locking-in will be


69/205

55


benecial if we see an upswing in interest rates.

Asian Commercial PropertyMarket Outlook

The Asian commercial property market is witnessing

a bullish period as investors are looking to buy

properties either in their local market or in an overseas

market. The most desired locations for commercialproperty investments over the next twelve months are

Singapore, Hong Kong and Shanghai.

Overall ofce rents in Asia climbed 3.2% quarter-

on-quarter in 3Q10, led by strong growth in Singapore

and Greater China. In Singapore, key rentals surged

7.2% quarter-on-quarter to $7.40 psf per month

from $6.90 psf per month due to rising demand from

nancial institutions, insurance rms and professional

business services companies. Meanwhile in Hong

Kong, citywide ofce rents rose 10.8% quarter-on-

quarter.

Finding A Reliable Property AgentThe primary criteria for selecting a reliable agent is

to go for a certied real estate agent, which is now

mandatory even by government standards.

The advantage of looking for a certied real estate

property agent is that they have plenty of experience

and can understand a customer’s needs better. They

are efcient in making a quality transaction as they


70/205

56


can help the investor nd exactly what one wants

within a specic budget or help sell a property for a

high price that a customer could not have imagined.We at PropertyGuru have more than 20,000 agents

registered with us and we have a system in place to

moderate their activities.

How Property Guru Ensures The

Reliability Of Its SiteAt PropertyGuru, we have a team taking care of all

the content that you see on the website. We check the

listings added onto our website and the moderation

includes processes like removal of suspicious

listings, sold listings, spamming of listings. We also

moderate the ad content (photos, videos and property

descriptions) to maintain relevancy. All listings expire

after 30 days from date of posting.

Likewise, to check the authenticity of the agents,

before the agents register on our website to post their

listings, they have to go through and abide by the

content guidelines laid down by our website. These

are supportive to and parallel with the Council of

Estate Agents (CEA) regulations.

My Personal Investment PhilosophyAs an entrepreneur and angel investor, I’ve historically

been a risk taker. I’ve invested in a number of digital

media start-ups in Asia and Europe, naturally with


71/205

57


mixed results.

Given my nancial commitment to PropertyGuru

over the last 4 years, I’ve taken a less risky approachand have recently been trying to maintain a balanced

and diversied portfolio between cash, equity (small

caps and MNC’s in Asia, Europe & Americas) and

property.

Much of the equity exposure was moved to cash

two years ago and I’ve been drip feeding it back into

equity this year. My property exposure is limited

currently with just two properties in London.

My Property Investment Stories

My property investments so far have been verypositive both from a capital appreciation and rental

yield perspective. They have both increased in value

by 35% to 45% in the last eight years and they generate

5% to 7% net rental yields.

London is an incredibly resilient market and despite

the huge impact of the recession on its nancial servicessector, the real estate market was not too affected.

This was primarily due to a signicant weakening of

the pound (e.g. London property became 30% cheaper

for Singaporeans) and the rush of Asian money into

London property.

A friend of mine who made over $1.5 million

on property investment and ipping during the

2006/2007 boom, overextended himself in 2008 when

the recession hit and the property market crashed.


72/205

58


He was left with ve properties, all of which

were generating negative rental yields. Two of these

properties were theoretical en bloc potentials at the timeand one of them was empty. Given he couldn’t afford

to maintain ve loss-making investment properties,

and the prices looked like they were dropping fast, he

sold three of them at a loss of $580,000. He was the

rst to admit that he got over-greedy in the booming

2006 to 2008 period.


73/205

59


Kelvin Fong

Team Leader,Powerful Negotiators

Kelvin Fong is the No.1

Group District Director

in PropNex. He leads

over 1,000 real estateagents, by far the

largest group of

agents in PropNex.

For three consecutive years

(2008, 2009, 2010) he was also awarded the

Champion Team Leader title, the highest accoladefor a team leader. His group, Powerful Negotiators

(previously known as Mega Force), has been achieving

breakthrough sales figures consistently: $10 million

in 2007; $13 million even during the market crisis

in 2008; $28 million in 2009 with a significant 12%

market share of the private resale market; and $39million in 2010.

Kelvin is also a sought-after property consultant

for investors interested in investing in Singapore

properties. He counts some of the Who’s Who in

the business world as his clients. He is known to

help his clients minimise risks by leveraging on the

most suitable loans available, while also maximising

the profit potential of the investment. His expert ise in

analysing the market and property investments has

consistently translated into huge profits for his clients.


74/205

60


This is why clients listen when Kelvin shares his

advice, and why new clients are constantly seeking

him out.Kelvin is also the founder and CEO of Zest

Consultants, a leading training company providing

education for real estate agents and property investors

who are interested to learn the strategies of investing

safely and profitably.

He has been featured as a property expert innumerous media including Channel NewsAsia,

Channel U, 938LIVE, Radio 100.3, The Sunday

Times, Property Report Magazine, Success in Real

Estate and others. He has also been a featured

speaker in iProperty.com EXPO, PropNex Convention

2007 and 2009 and other property related events.


75/205


76/205

62


Impact Of The Fourth Round Of

Measures And Property

Price ForecastsWith all the new measures that were announced

recently, many buyers and sellers will need to take

some time to assess the market conditions before

making any decisions.

Personally I nd the measures harsh, but we must

understand that the government is doing this mainly

because they do not want to see people buying properties

recklessly and overstretching themselves to own

multiple properties. The government is concerned about

whether these people can hold on to the properties if the

economy does poorly.

On the positive side, the government’s measures are

good for long term investors. With a higher downpayment,

all future investors will have stronger holding power and

will not be in a hurry to sell even if prices fall.

The new measures will not cause as steep a drop inprices as in 2008 because our economy is still doing well.

Coupled with the current low interest rates, investors

would rather hold on to their property than sell it off.

Most investors are not willing to sell at a lower price

because they have already put in

Documents

Secrets of Singapore Property Gurus.pdf