Property Investment Checklist for Ensuring A Profitable Property Purchase

Having spent over 50 years working in the finance industry and being able to share my vast knowledge and experience still gives me a great deal of satisfaction. That said I would like to share the following information with you. In recent times, I have found that when people are researching new suburbs and locations for possible areas of property investment, the majority of these people are unaware of the right questions to ask when they are trying to make an informed decision.So, I have prepared this property investment checklist to assist you and other investors in asking the right questions. It will help you in making a profitable investment. I have also provided some useful information for you to read. These questions and information should assist you when you are trying to make an informed decision.You should start by asking yourself the following questions:Question # 1Is the property you are looking at close to existing or planned infrastructure?Tenants will be more readily attracted to your investment property if they know that infrastructure is already in place or if the infrastructure is being planned.Question #2What transport options are available to your tenants?You will need to assess what transport options are available to your tenants such as:>> Train lines;>> Major arterial roads;>> Road networks;>> Freeway access;>> Footpaths; and>> Cycle paths.Question #3How many rental properties are available in the area?You should look at suburbs and locations where there is a high demand for rental properties. It is important because it will offer you with good opportunities and also decrease the likelihood of your investment property sitting vacant for any length of time.Question #4What are the property prices of the area?You should look at suburbs and locations where there is evidence of consistent and steady increase in property prices and try to avoid areas that have suffered from plummeting price drops.Question #5What are the benefits of buying a new or established investment property?You should carefully weigh up the benefits of buying a new investment property versus an established investment property (i.e. as new property can provide considerable tax benefits and advantages).Question #6What is the demographic breakdown of the area?You want your investment property to be located in a neighbourhood that is welcoming to your tenants and where you have an improved chance for resale. So, when considering a suburb or location you should research:>> The number of owner occupiers in the area;>> The number of investors in the area;>> If there is any evidence of public housing in the area; and>> The overall presentation of the suburb and the surrounding suburb.Question #7How does your investment property compare to the market average of similar homes in the area?It is always a good idea to compare your property to other similar homes in the area to make sure that your investment property is accurately priced.Question #8Is your investment property in an area which will appeal to families?Because families are considered to be stable tenants, you should look at suburbs or locations that attract and cater well for families.Question #9How much land is available in the area?You should consider looking at:>> Buying land in a new land estate where there is a healthy supply of land, as this is a good indicator of future growth; or>> Buying land in an established, sought-after suburb or location. It may prove to be a smart investment, as a decreasing supply of land can push up the value of your investment property.Question #10Have you considered the potential capital growth and rental yield of your investment property?When evaluating your investment property, make sure your property is strong in both the following areas:>> The potential for capital growth; and>> The potential for a high rental yield.Choosing an investment property that suits your needs is a major financial decision. So, don’t rush into anything too quickly. Always remember that while you are shopping around for a suitable investment property, do your research.Seek Expert and Professional AdviceProperty investment checklist can help you make an accurate decision. You can take help of a professionally qualified finance broker. He/she can help you to create a personalised property investment checklist that can help you in making a profitable investment.

What You Should Know About Property Management of Commercial Properties

Now that you have made an offer to acquire a commercial property and are waiting to close escrow, you may want to start looking for a property manager to professionally manage the property. Your real estate investment advisor should present you with 2 or 3 local companies, each with its own proposal. Your job is to decide which company you will hire. The property manager will be the main point of contact between you, as the landlord, and the tenants. Her main job is to:
Receive and collect the rents and other payments from your tenants. This is typically simple until a tenant does not send the rent check. A good property manager will somehow get the tenant to pay the rent while a lousy one will throw a monkey on your back!

Hire, pay, and supervise personnel to maintain, repair and operate the property, e.g. trash removal, window cleaning, and landscaping. Otherwise, the property loses its appeal, and customers may not patronize your tenants’ businesses. The tenants then may not renew their lease. As a consequence, you may not realize the expected cash flow.

Lease any vacant space.

Keep an accurate record of income and expenses, and provide you with a monthly report.
A good property manager is critical in keeping your property fully occupied at the highest market rent, the tenants happy and in turn helps you achieve your investment objectives. Before choosing a property management company, you may want to:

Interview the company with focus on how the company handles and resolves problems, e.g. late payment.

Talk to the person who will manage the property day to day as this may be a different person from the one who signs the property management contract. You want someone with strong interpersonal skills to effectively deal with tenants.
The property managing company normally wants a contract for at least one year. The contract should spell out the duties of the property manager, compensation, and what will require the landlord’s approval.Agent’s Compensation: you will have to pay someone to manage and lease the property. You may have one company to manage the property and a different company to lease the property. However, it’s best to work with one company that handles both managing and leasing to save time and money.

Management fee: the fee varies between 3-6% of the base monthly rent for a retail center, depending on the amount of work needed to manage the property. For example, it takes much less time to manage a $2M retail center with just a single tenant than a $2M retail strip with 12 tenants. So, for the center with 12 tenants, you may have to pay a higher percentage to motivate the property manager. You should negotiate the fee as a percentage of the base rent instead of the gross rent. Base rent does not include NNN charges. Ideally, you want a lease in which the tenants pay for their share of property management fee.

Late fee: when a tenant pays late, he is often required by the lease to pay late fee. The property manager is allowed to keep this fee as an incentive to collect the rent.

Leasing fee: this fee compensates the property manager to lease any vacant space. In a typical lease contract, the leasing company wants 4-7% of the gross rent over the life of the lease. It also wants the leasing fee to be paid when the new tenant moves in. In addition, the leasing company wants around 2% of gross rent when the lease is renewed. The tenant may also ask for Tenant Improvement (TI) credit, typically between $10-20 per square foot to pay for construction expenses. So if a new tenant with a 10-year lease goes under after one year then you may lose money. As the landlord you should:

Approve a long term lease (10 years or longer) only when the tenant’s financial strength is solid. Otherwise, it may be better to reduce the lease to 3-5 years.

Make sure the new lease has a provision for some kind of rent escalation, preferably based on Consumer Price Index (CPI), i.e. inflation which is 3-4% a year instead of lower fixed 1-2% annual increase.

Consider TI request from the tenant as one of the factors to approve a lease. The TI credit depends on whether you need the tenant more or the tenant needs you more.

Negotiate for a flat rate renewal fee, e.g. $500 instead of paying a percentage of the rent for the life of the lease. The negotiation is easier with one company that handles both leasing and management.

Negotiate to pay the leasing agent a lower percentage, e.g. 4% when no outside leasing broker is involved.

You can see that it’s very important to minimize tenants’ turnover rate as it has a direct impact on the cash flow of your commercial property. A good property manager will help you achieve this goal.Monthly Report: each month the property manager should send you a report on income received, expenses incurred, and property status. You should Review the report to see if the numbers make sense. You should:

Request a report showing both rent and CAM fees received.
Request a separate bank account for your property and have a monthly bank statement sent to you. Without this, the property manager will deposit and commingle all the rents from all properties that she manages into her company’s bank account.
If you instruct the property manager to send you the excess cash flow then you will also get a check.Landlord’s Approval: the management contract should specify the dollar limit for exceptional maintenance expense above which would require your approval. This amount varies from landlord to landlord as well as the type of property. However, it’s typically somewhere between $500 to $2,000 dollars.Communication with property manager: in the first few months, you and the new property manager should communicate often to make sure things go smoothly. You should give instructions in writing, e.g. email, to your property manager and keep records of all your correspondence. If the property manager does not do what you instructed, you may refer to your records and minimize disputes.If you want to work hard for your money, you may want to manage your own property. However, if you want to work smart, your partner should be a good property manager.

What Are The Factors That Will Affect The Property Values In Malaysia?

First of all, the location itself is the main factor that will affect the property values in Malaysia. If a property is close to school, shopping mall, bank, transportation facility, hospital, restaurant, church, temple, airport or any other places that can provide convenience to the people staying at that area, that particular property will definitely has a high property value that will attract more people than any property.When it comes to real estate, the principle of supply and demand refers to the ability of people to pay for real estate coupled with the relative scarcity of real estate. The property values will be driven up by the condition of high demand coupled with a certain purchasing power and a short supply due to the scarcity of land. In contrast, the property values will experience a drop when people demand less of it while more supply enters the market.Let’s take for example Penang, being the second smallest state in Malaysia just after Perlis in terms of geographical coverage yet is the eighth most populous with 1.56 million of residents according to the population and housing census, Malaysia 2010 which is conducted for every ten years. Penang which has an average of 1, 490 persons per square kilometer is the second most densely populated states after Kuala Lumpur. This high level of population density puts competing pressure on land use which results in the rise of property prices as developers will put more expensive price tags on their projects due to the high-land costs. Besides, the lure as a tourist destination and a second home for foreign retirees is also one of the factors that results in a greater demand of Penang property. As a result, the short supply due to scarcity of land and the high demand from both foreign and local buyers is the main reason why Penang properties price are high as compared to say, Kelantan.Apart from supply and demand, the Feng Shui and Vasthu Sastra which is known as the “science of construction” also have to do with property values in Malaysia. Regardless of you believe or not, many recent studies have shown that the property price will still be affected by Feng Shui. A property placed near a body of water can fetch you a handsome price compared to a property which is not. A property faced with a road junction or built at a dead-end road can have a lower price as compared to another property in the same area which is not. Many people trust Feng Shui because they consider that keeping things related to Feng Shui will bring steady growth, prosperity, good luck, good health, happiness and positive energy to the house, office or to the being. In this way, people will consider carefully the position and placements of the property which in turn makes a well placed or well designed property more attention-getting and favorable.Next, inflation also has an impact on property values in Malaysia. At its most basic level, inflation is simply a rise in prices and a fall in the purchasing value of money. Let’s take an example; again using Penang where there is latest news announced that “the selling price of properties in Penang will soon surge by 5%-10% following the recent move by Lafarge Malayan Cement to raise cement prices by about 6%”, according to the Penang house developers. A hike in cement price simply means the price of concrete roof tiles, cement sand bricks and all the other cement-related products will rise. On average, 50% of building materials used in property development comprises cement and cement related products. Therefore, such inflation will leads to an increase in construction costs and the buyers are the one who ultimately bears the cost. Besides, the inflation also has been caused by the transportation and labor costs that are increased nationwide. The rise in cost of labor is particularly due to the labor shortage as many Indonesian have gone back to Indonesia and are facing with stricter laws and standards when they wish to come back to Malaysia.The government’s introduction and revision of its property related policies also played a key role in determining the value of properties. The exemption revision of real property gains tax (RPGT) has increased the interest of a small group of people on the property market. Additionally, Malaysian government is pushing out a series of incentives to make its property market more attractive to foreign investors who will eventually bring in external cash flows. Both of these actions have enhanced the property values. In addition, the build then sell (BTS) concept has been revised. It has increased the confidence of buyers and created developers who are more conservative leading to higher value of property.Furthermore, the existences of property agents and Internet such as auctions websites and real estate agent websites help ease the process of selling the properties nowadays. It has made the property investment more easy, convenient and favorable. In this way, there is an increase of interest in property investment thus further lifting the value of properties.Moreover, the mortgage rate that also plays an important role in influencing the property value should never be forgotten. A mortgage rate is commonly known as Base Lending Rate in Malaysia (BLR). BLR is a term refers to the minimum interest rate used by banks. It is defined by the central bank of Malaysia. BLR will get lower when the global money market down turn and get higher when the money market is on uptrend. Whenever the housing demand is weak, lower mortgage rates will help to improve the access to property financing while reducing the monthly payment for housing loan. So, these circumstances will aid in strengthen the housing demand and then the property value will increase over time.Last but not least, the vacancy levels will also have a significant contribution towards the property values in Malaysia. For illustration, when the unemployment rate is high, the buyers and investors will not have enough capital to invest in a property creating a situation of strong rental sales. In contrast, the low unemployment rate will motivates the buyers and investors to involve themselves in property investment activity eventually leading to a higher property values.Above are some of the factors that will affect the property values in Malaysia. However, there are still some other relevant and important factors out there that are worth seeing.

Havana Collection Traditional Oriental Distressed Area Rug and Runner

Runners are a great way to add interest to any room in your house without having to do much in design. They are also a very easy way to give your home a more professional appearance and a less makeshift one. All you need to do is find a runner and add some wool balls or other fleece-based fibres. You can get creative and use various materials, but in most cases, you will want some type of fleece to help keep your branch area rug from slipping. The fibres will keep your area rug from moving, and the wool, in most cases, means it’s less expensive than buying a standard area rug. You will also want to consider the colour of your runner. There are a variety of colours that work well in keeping your area rug looking cohesive and adding interest to a space. You can also get area rugs in many different colours to match other furnishings in your home.

What Is a Runner?

A runner is a piece of fabric or other material that runs the length of a room. It could be up to 3/4 the length of the room or race in straight or irregularly shaped areas. The purpose of a runner is to help the furniture in the room stay put while providing additional seating, especially in areas where no additional seating is necessary. There are many uses for a black modern rug, such as adding a pop of colour to a room, changing the feel of a room, and adding a more structured sense to a space.

How to Make a Runner

The first thing to decide is what type of fibre you want to use. Fleece is a very soft fibre that will work well for most areas of your house. Wool is a very strong fibre that will hold its shape better than more delicate fibres such as cotton. You will also want to determine if you want a square or circular rug. A square carpet is the easiest to keep in shape and can be rotated to keep the pattern from sliding. However, a circular rug is always guaranteed to stay put. Next, decide how much material you want to use. The standard rule of thumb is to go one-third the length of the room. You can go a little smaller if you want a shorter rug or a lot larger if you want a longer mat. The key here is to make sure you have the necessary space for your carpet. If the havana runner rug is a show stopper, go with the larger size. The surface should support the weight of the fibre, such as being endorsed by PVC pipes, metal shelving, or a table. You will also want to ensure adequate drainage to prevent water damage to the area rug.

Materials You’ll Need for a Runner.

The materials you will need for a runner can vary depending on the purpose of your rug. A casual area rug could use fabric scraps, while a more professional carpet would require a more expensive material. For the most part, wool is inexpensive and easy to find, so you will want to use that. If you are running a more casual area rug, you could use a cotton blend but be warned that it will feel cheap compared to the softness and bounce of a wool rug. If you run a more formal room, you will want to use a more expensive material such as wool or leather. These will look and feel even more luxurious when paired with an area rug.

Planning Your Run

The planning phase of making an area rug is the most important one. You will want to know the length of your run, the width of the room, and how far from the center of the space you want your rug to go. You should also know the ceiling height to decide what type of rug will be the right height for your room. You will also want to know the fixtures, such as light fixtures, in the room to know where to position them to keep your rug in balance with the rest of the room.


A great way to add character and movement to any room in your house is to use a runner. Runners are easy to make and can be used in various ways. For example, a running area rug is perfect for adding colour and life to a room. You can also use a runner as a bedside table, a bathroom rug, or a spa rug.