Property in Malaysia for sale and rent | Buy, Rent and sell real estate and homes

Have you seen an advertisement regarding Gold Coast Morib in the newspaper recently? Is it a good investment? It said
1)start to pay installment only after the building was built (after 2 years)
2)5% of downpayment
3)no management fees,lawyer fees, rental...
4)no installment needed as it guarantees 35% return (i wonder why the developer is willing to sell it if the return is so good),this return will served as the installment.

Need your expertise!

the website is goldcoastmorib.com.my

Just to share my views based solely on your forum post.

I'd say the 5% deposit and the fact you only pay once the building is complete is absolutely fantastic. This means that if prices go up 20% after 2 years when the property is complete, you get back 5x what you put in i.e. a 400% profit(in reality it would be closer 300% after all costs).

That's a fantastic return, even if your name is Warren Buffet.

However, it's also high risk. If prices go down 5%, you've lost your deposit. Check on the contract, but if you're able to walk away in 2 years time from the transaction with only your deposit being lost, it means the risks are not that high - the very max you can lose is the 5% you put in. If you can be forced by the developer to pay the remainder 95% then it's a much higher risk.

My concern about this investment is the rental guarantee itself. Most good properties that developers sell don't come with rental guarantees - the property is enough to sell itself. Rental guarantees are often given so that properties that can't be sold easily are sold more easily than otherwise.

And I wouldn't rely too much on rental guarantees - the entity that gives it to you is often not the actual developer but an SPV which could easily go bankrupt if things don't go too well. You really need to focus on the actual property, and if the property will sustain itself, then go for it, else forget it, no matter what you're guaranteed.

Thanks for your valuable comment,you really enlighten me.

By the way, what is SPV? What will happen if the SPV go bankruptcy?

How would i know that the developer is reliable?

Ann

An SPV is a Special Purpose Vehicle. It's a company set up not to carry out general business but to carry out a very specific purpose, perhaps simply to make guarantees.

If the SPV goes bankrupt you typically won't be able to get any money from the SPV as it has no or very few assets. You typically won't get anything from the parent company either as the guarantee only comes from the SPV.

Regarding the developer the most reliable ones are often the best known ones as they have spent years creating their brand, and their brand is worth a lot to them. So they will do their best to protect their brand and ensure buyers are not short-changed.

You could look at their past projects, and if you do make sure you see how well managed their past projects have been even after completion. If they've deteriorated very quickly, then expect the same for your own property.

And you can look at the developers accounts which might be helpful only if you understand them. You'd also want to check the SPV's accounts.

Asim

Ann

I have went to see the units last month. I found this projects have been launched for a year, then recently only start with construction.

The company's HQ is in Klang and they have many projects in Klang. After finish this Gold Coast Morib, they plan to continue the projects to Gold Coast Cherating and Gold Coast Kenyir.

My opinion:
1) The developer is willing to sell actually part of the resort (yes, they know the resort could guarantee 35% return), because they need our involvement in promotion the resorts. The method is they provide us with the free package resort of 14 days a year right? And the guarantee is only for 5 years, this is the potential so far they can predict.

2) Another thing you might not be aware: actually this resort is a leasehold land, this year is the 11 year already. This is one of the disadvantage.

Therefore, I am now focusing on the Gold Coast Cherating. The reason:
1) Govt is now launching with East Coast Project Development.
2) The Cherating land is freehold.
3) However, the price is slightly high the Gold Coast Morib. But please remember, the price higher - the return will for sure higher right!

According to the sales office, the Gold Coast Cherating is target to launch after Chinese New Year. I hope by then, I can have the chance to visit the site

** One more, recently I found another project which is better than Gold Coast Cherating. ~~ Bukit Gambang Resort. I am searching for the resort's info...
Anybody have the info about the projects, please share