Wednesday, February 28, 2018

Interest to visit Forest City

Someone called me to ask about Forest City. He was interested to buy an apartment there but was worried about the over-supply. He asked my views.

My reply.

There will be an over-supply of property all over Johore. This is a known fact. It will not change.

I decided to buy an apartment in Forest City as an alternative to putting the same money in the bank to earn 0.2% per annum. My cost of holding the Forest City apartment is only 0.2% per annum. It is almost free of cost to me.

I paid $400 psf for an 1,200 apartment. The tenure is freehold. My invested sum is less than $500,000.

I do not expect to lease the apartment due to the over-supply. I intend to use it as a holiday home. I will pass it to my grand-children who might find it to be useful in 20 years time.

Last Christmas, I brought my Indonesian friend to stay in the hotel at Forest City. He is middle income and has three children. The family decided to buy a small apartment in Forest City on their first visit. They might send their son to study in the international school in Forest City or in Iskandar.

They also like to apply for the MM2H (Malaysia My Second Home) which gives them permanent residency for 10 years. They want a place to go in case there is racial problem in Indonesia, which occurred 20 years ago. More families might make similar plans. It is too costly to buy a property in Singapore. Johor is a good alternative.

I also like the concept of a modern city, with innovative transport facilities, and an eco-friendly environment. They have a 4 level road system. One level is for vehicles, another level for parking, the third level is for people (no vehicles!) and the top level is a light rail system.

He wanted to visit Forest City to take a look. I introduced him to the sales and marketing consultant to arrange the visit and briefing.

I gave him a tip: If you have cash, you can pay for the property upfront and enjoy a 15% discount. (I did!). I monitored the share price of the developer, Country Garden. The share price increased 3 times during the past 2 years. It gave me the confidence that their development is doing well.







1 comment:

Yujuan said...

If you buy a property in Malaysia, have mindset to treat it as family holiday use, dun ever hope to rent it out for passive income.
Rent is low, and when your lease ends, your property would look like a war zone. The cost of renovating your property is not cheap, esp in J.B.,
a high cost area. Tenants may run off without paying rents, together with your home keys.
Western expatriates prefer to rent a landed property with high security fencing protection, preferably with Gurka guards from Nepal. Maybe K.L is an exception.
Malacca a better place to retire, houses and food costs are cheaper than Johore, only about 2 hours by car from Singapore, and would feel like being home when HSR starts operation. Get a place near the toll gate at Malacca entry point, where the HSR station would be sited.
But if your children's education a priority, then Johore would be ideal.

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