Quality rental properties most favoured
Published on: Wednesday, March 20, 2024
By: Sherell Jeffrey
Loo said his talk titled “Property Stacking with No Money Down” in Kota Kinabalu, recently, where he talked about property investment and financial freedom.
Kota Kinabalu: Melvin Loo, a Malaysian property entrepreneur and investor, says one common misconception about investing in real estate is that it will make you money quickly and easily without having to spend extra money on upgrades.
Loo suggests that people who want to invest in Kota Kinabalu focus on sprucing up properties to make them more appealing to renters and make the most of renting income.
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He said his talk titled “Property Stacking with No Money Down” here, recently, where he talked about property investment and financial freedom.
“I did a bit of research and found most of the properties for sale in Kota Kinabalu have not been properly refurbished.
The units look old and have not been touched up,” said Loo citing his research on Airbnb at a condo by the sea in Kota Kinabalu where the layouts are all the same.
“I saw that one Airbnb listing rents for RM600 per night and the other for RM300 per night.
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The occupancy rate for the RM600 unit was much higher compared to the cheaper one because the RM600 unit is nicer and better taken care of.
“This tells me that people in Kota Kinabalu are willing to spend more if they get better value,” said Loo, who is only 35-years-old but has already done what many people hope to do in their lifetime.
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Since he started investing in real estate in 2019, Loo has built up an impressive collection of 25 properties worth about RM15 million.
When he first started investing in real estate, he did so with a plan and an eye for possibilities.
He used what he knew about the market and his desire to be an entrepreneur to find good business opportunities.
He bought properties with the goal of their long-term value going up and he also got into the short-stay business by renting them out as Airbnb rooms.
“I got rich over time by putting money into real estate. The banks, loans, and other things I use to get money that I then put back into my business.
“I have interest in business because I do not like routine jobs. I like challenges in business, I like to see how the business can grow and help people grow. I like working with other people.
“I strongly advise investing in real estate because, with real estate, you only have to do the work once and don’t have to worry about it for a long time.
“For example, if you have a tenant who stays for a year or two, your job will be to manage the tenancy and all that for a year or two.
It is not as stressful as investing in the stock market, where you have to worry about the market and everything,” he said.
Loo also cleared up the myth that dealing in real estate is only for rich people, stressing that anyone can start investing with the right planning and smart choices.
He said those thinking about investing should do a lot of research and talk to many sources so they could make smart choices.
“I believe that everyone, no matter where they are from, should get advice from many different sources to get a more complete picture of any situation or thing they wish to invest in.
“It is not fair for me to tell you what to do. I would say try to understand the situation, do not jump to conclusions right away, and then get second and third opinions.
Then you must come up with your plan because advisors are just people who can give you advice based on their own experience.
“My experience may not suit you, but it can be your reference.
That is why I think it is important for everyone to get advice from more than one person and then come up with a plan that works best for them.
You need to make a plan that works for you.
“I would say to get as much information as you can from different sources; that is the key.
Getting advice from the same person telling you to do different things is pointless. It is too narrow.
You need to get advice from a lot of different people to get better advice,” he said.
Loo also stressed how important it is to have clear goals, stick to them, and make smart choices to be financially successful.
“Reaching your goal is very important before deciding if that road is the right one.
People should look at their progress and see if their goals are still important and doable,” he said, adding that people could use this evaluation to make smart choices about their financial future.
“If you want to invest, the most important thing is to know where you want to go.
A lot of people put money into real estate, stocks, shares, equities, and other investment markets just to try it out, without having a sound plan for when to get in and when to get out.
“That is the most common problem, and a lot of people get stuck in situations they cannot get out of or back out of.
“First, you need to know what you want to achieve. This is the most important step.
People today, especially younger people, give up easily before they even reach their goals.
“So, I would say set a goal, reach it, and then decide if this is for you or not. Don’t give up in the middle and say it’s not for you.
“If you haven’t reached it (goal) yet, I don’t think you have the right to say that it’s not for you yet,” he said.
On his advice to those in Sabah looking to start investing in property for the first time, he said “If you were to invest in Sabah, I would say the rental market is the most under-rated or the one that most people tend to ignore.”
“A lot of people buy property with the idea of ‘buy to achieve property,’ which means they look into deals where they don’t know if they can make money.
“There are a lot of people competing for rental properties in Sabah right now. Take renting a room as an example. I think the Airbnb market is still very new.
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