theSun Property November 2016

theSun ON FRIDAY

NOVEMBER 11, 2016

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thesundaily.com

HILE

many first-time,

soon andwanna-be

home owners are

looking at the various

incentives and programmes

announced in Budget 2017 in buying

their first or affordable home, here is

another option, something out-of-

the-box.

Not the usual or popular choice

of many, but altogether an

alternative that could save one

dollars and cents (or in our case,

ringgit and sen), especially during

these timeswhen the economy of

the country is not at its best.

theSun

talks to B.I.GPlots Sdn Bhd director

TanHwa Chuanwho shares an

unconventional alternativewhere

affordable housing is concerned.

THEMARKET

For a start, we take a brief look at

the propertymarket inMalaysia,

which is lagging and expected to

remain in this slow-loris pace into

the next year.

“I think before the elections, there

will be some small ‘good things’ to

look forward to as there usually are.

But for now, aswe all know the

propertymarket is slowand there

are fewer developers launching new

property projects.What you see

noware the balance of the phases

from last year’s projectsmostly.

Then again, there are certain

projects like the shops in Batu

Kawanwhich can be launched due

to its good location near Ikea.

Selectively, there are some projects

that can be quickly taken

up like Skyworld’s

project in Sentul. Old

towns likeKepong

also have good

projects. The

presence of

shops andmalls

or even

universities and

colleges can also

help enhance

the sale of

property around

the area,” shares Tan.

According toTan, the value of

Desa ParkCity’sNadia homes has

dropped by about 20%. However, he

says it would still make a good sub-

sale purchase as the location itself

can help fetch a good price for a

piece of real estate there. Tan then

shares howhe purchased a piece of

property at RM700k (havingworked

out its re-sale value) that he

managed to sell almost twice higher,

at RM1.35million. A tip fromTan,

especially during this slowperiod is

to domore research beforemaking a

decision. As a heads-up, he shares

about a development project in

Sentul selling at RM375 per sq ft

when other developers in the area

have their properties going for

RM650 per sq ft.

UNCONVENTIONAL OPTION

With the current situation the

property industry faces now, Tan

sheds light on another alternative,

that could come under the

“affordable home” umbrella. In this

case, youmay not be purchasing

your “ready-made home” per se,

instead, buying land to build your

home, which could save you a lot of

money, depending on your wants

and fancies. [Think cheaper home

alternatives as in container homes,

which are quite the fad.]

Then again, Tan says that buying

land as an alternative to purchasing a

ready-made home could pose as a

cheaper alternative, but can also

work out to be amore expensive

one, depending on howone goes

about closing the deal and naturally,

the price of the land itself.

He gives an example: “Desa Park

Citymansion of 35’ x 80’ with built-

up of about 5,000sq ft costs around

RM5million. Across the road is

CountryHeights Damansara

offering dual bungalowswhere the

land is offered at RM2million and

building costs comes up to around

RM5million and other additional

charges, rounding off at RM8million

for two bungalowswith built-up of

about 15,000 sq ft across the

same amount of land. As it

works out, at Country

Heights, for RM4million,

I could stay in a bungalow

compared to a super link

house inDesa Park

City. In this scenario,

land is a cheaper

option, but only if one

wants to build homes.”

CAUTIONAND

COUNSEL

So, if it couldwork

out cheaper to buy land and build

one’s own home, why aren’t people

flocking to view the vast amounts

of available land in the country?

Tan’s reason: “There is a lot of

work to be done in the case of land

purchase. The design and approval

itself will take up to a year before all

is settled.When it comes to house

design, theremay bemany opinions

andwants from familymembers

and relatives, which couldmake

things complicated. Complications

could cause the approval and

design process to be delayed for an

additional year. Due to the amount

of work and time taken, many opt to

buy the conventional houses offered

by developers, instead of building

their own houses.” Fromexperience,

Tan says that most peoplewould

rather enjoy the convenience than

savemoney and cost. Besides, how

many of the average Janes and Joes

can say they know the ropes in

purchasing land, especiallywith

each state having its own terms and

conditions, alongwith the various

land titles, do’s and don’t’s and nitty-

gritties often associatedwith land

purchase.

Tan then shares about the tedious

processes and some conflicts a buyer

could encounter, especiallywith

contractorswhomay not

understand the building concept and

so forth. But for thosewho are

interested in learning how to buy

land to build their own homes,

Tan suggests buying a bigger plot to

build a couple of homes to sell

off once completed as the amount of

time and effort taken to build

just one or a couplemore, is quite

the same (provided they’re in the

same location).

TIPS AND TRICKS

Firstly, Tan says the landmust

be residential land. “If one buys

agriculture land, which is cheaper,

only one house can be constructed

on each acre of

land. In the end, it

doesn’t make the

“investor”much

profit or he could

losemoney all the

same,” informs

Tan. “Checkwith

the land office,

like inKL, check

withDBKL on the

land you intend

to buy. Is it zoned

as agricultural,

commercial,

industrial or residential land?

“The best land for building is

commercial land because you can

still build residences on commercial

land and sell small units. Moreover,

the category of the landwill affect

the land value. In industrial zoning,

you cannot build houses but you can

applywith the local government to

Home

ownership

alternative

>A look at land to build andmake home of

dezone the area as an industrial area

and change it to a commercial one.

Once done, you can build shop lots

and apartments. Petaling Jaya is an

examplewhere industrial land has

been transformed to become Jaya 1

and Jaya 33,” Tan shares.

However, Tan says it is important

to have foresight, tomonitor the

surrounding land area, do a lot of

research and be knowledgeable

enough before you “play the game”.

He reminds that to get the home

design approved takes at least a year

for an experienced developer, two

years probably for the inexperienced

home buyer.

Tan also suggests one carefully

select the team they intend towork

withwhen buying the land to build

their own home/s. There are agents

who are knowledgeable and then

there are agentswho only knowhow

to pass titles. “For the land investor, I

would suggest that he or she join

some class to learn the ropes. If not,

try to learn from

lawyers, property

experts and

developers. From

there, youwill

quantify howyou

see a piece of land

andwhether it is

worth for you to

invest in,” shares

Tanwho conducts

classes on land

purchase himself, as

director of his own

company B.I.GPlots

handlingmergers and acquisitions

for land investment.

RECAP AND REVIEW

Sowe know that much time,

money and effort is needed to get

started. But is nowa good time?

Tan says now that the property

market is slow, is the best time to

invest in property. “There is great

opportunity in times like these.

Property developers in these times

aremore humble as they have a

lot of stock and theywant to break

even. Due to this, many arewilling

to discuss reducing the price of the

remaining stockwhichmakes it a

good opportunity.

“The same thing can be applied to

land as there is always land to be

sold and bought. So it is important to

be updated on the situation from the

land owners and shareholders. Like

during the 2008 crisis, therewere

many rich peoplewho became

richer, despite the problems they

were facedwith.” So for Tan, it is a

busy period nowas he gathers his

partners and customers to get into

Basic Data Checklist

land size

land title tenure and type

(freehold/leasehold)

location map

land gradient or contour

accessibility and

infrastructure

surrounding – townships,

projects, etc.

distance to amenities

Site Visit Checklist

accessibility

project showrooms nearby

position of sun

terrain

infrastructure

soil condition

flood prone area, zone and

water streams

high tension cables

graveyard or cemetery

Land Office Checklist

ownership – to verify actual

owner of the land

use and status of land - to

verify the use of the land, the

condition it is in, gazetted as

Malay Reserved or for

commercial purposes,

freehold or leasehold tenure,

etc.

Temporary Occupation

Licence (TOL) – to verify if

the land was granted with

TOL

government acquisition – to

verify if the land will be

subjected to government

acquisition

caveat – to ascertain if there is

any caveat lodged onto the

title by its current or previous

owners

charges – to verify if the

subject land is charged to a

financial institution already

themarket. For those interested in

learningmore about land purchase

and investing in property, Tan

advises to join his next course taking

place in the first quarter of 2017 or

look himup for private consultation.

* Retrieved from

MakeBigMoneyViaLand

byTanHwa Chuan