Quick update

Good evening!

I recently have had issues with Google's search engine optimization feature. Therefore, this blog has been ignored by search engines for a week now.

Therefore, I would like to sort out the SEO of the blog first before I continue sharing my learning experience. I hope you understand. I apologise for the inconvenience!

Cheers,

Tse Wei

Rent and Capital Gain

Good evening!

Today, I am going to compare the difference between residential properties and commercial properties in terms of rental income and capital gain.

Residential Properties

Residential properties can be segregated into two types; high-rise and landed. High-rise residential properties like condominiums and apartments tend to yield a higher rental income when compared to landed residential properties like bungalows and terrace houses. However, the capital gain on landed residential properties is way higher than the capital gain of high-rise residential properties.

For example, a condo yielded a rental income of $2000/month in 2009 and was worth about $300000. At the same time, a bungalow yielded a rental income of $1600/month but was worth $420000. Today, the same condo yields a rental income of $3000/month but its value is only $370000.At the same time, the same bungalow yields a rental income of $1700 but it's worth $700000.

For the above example, the capital gain for the condo is $70000. The capital gain for the bungalow is $280000.

Capital gain of bungalow > Capital gain of condo

However, the rental income of the condo had increased significantly and remained superior when compared to the rental income of the bungalow which has nearly remained stagnant.

Rental income of bungalow < Rental income of condo

Commercial Properties

Commercial properties tend to be superior when compared to residential properties on rental income and capital gain. Both will increase at about the same rate.

Capital gain and rental income of commercial property A = Capital gain and rental income of commercial property B

*in the same area

Land

Land generally enjoys a high capital gain. The rental income of land depends on what the land is used for; parking lots, plantations and etc. There is really nothing much to say about land, it is more of a buy and hold type of property.

Summary

• Commercial properties tend to have the upper hand when it comes to rental income and capital gain. 
• Residential properties have a significant difference between the increase in rental income and its capital gain
• Land is generally bought and held on to for many years. Rental income of the land is determined by the usage of the land. Land generally enjoys a high capital gain.

I hope this article has given you a better understanding of the characteristics of capital gain and rental income between these three types of properties. Thanks for taking your time to read this article, it really means a lot to me!

Land

Good evening!

Today I've learned that land can be segregated into 4 categories and only specific things are allowed to be built on them. The four categories are:

1. Agricultural land

Agricultural land

This is the land used to plant crops or anything related to controlling life. It is generally used for crop plantations or fields for animals to graze on. Barns and farms can be built on this land while high-rise office lots cannot.

2. Residential land

Residential land

This is land used to build living spaces for humans. It is generally used for houses. Some examples of buildings that can be built on this type of land include: condominiums, apartments, bungalows and terrace houses.

3. Commercial land

Commercial land

This is land used to build high-rise commercial properties for business use. It is generally used for offices and retail stores. High-rise office spaces, serviced apartments and shop office are built here. You are most probably not allowed to plant crops on this land haha!

4. Industrial land

Industrial land

This is land used to build properties for business use. It is generally used for factories and warehouses. Amazon's warehouses, Coca-Cola's factories and many other properties alike are built here.

Summary

In conclusion, land can be segregated into 4 categories; agricultural, residential, commercial and industrial land. These lands all serve a purpose and have special guidelines to follow whilst constructing a property.

This may seem out of topic but it'll link up to my next post.Thanks for taking your time to read this post. I hope it has given you a better understanding on land usage!

Why Real Estate?

Good evening!

Today I am going to discuss why choosing real estate is a good idea! Here are several key pointers of the pros of real estate.

1. Low risk

Investment in real estate generally receives a good return over a few years. This shows that property prices remain stable. Stable property prices means that your investment (if done right) would never go wrong!

2. Leverage

Properties are normally bought by loans. Banks are more willing to give loans to people investing in real estate as they can use your property as a collateral (something like a deposit). Using little of your own cash, you can control a large investment. This makes it easier to expand and excel in the real estate sector.

3. Stable market

Real estate prices do not take a huge plunge after a day or two, it takes a while and there would be many warning signs before the prices fall. This makes it easier to predict prices and reduces risk.

4. Full control over investment

Owning a property would allow you to increase the value of your property under your own control. For example, if you remodel the property for $2000. This increases the property value by $10000. You have full power over the increase or decrease in your asset's value.

5. Purchasing power is protected

The value of a property would increase in tandem to the inflation rate. For example, a property may be worth $200000 now but in a few years, due to inflation, it will increase in value, making it worth $300000. This allows you to have the same purchasing power you had a few years ago as all prices have gone up and so as your property value.

6. The usage of your own money and time is unnecessary

The money used to buy properties can be borrowed from savers at a high interest rate. However your property is going to have a greater return on investment (ROI) as compared to the interest rate. This makes you profit using other people's cash! 

Furthermore, you can create an automated system by hiring a manager to manage your properties. This makes it unnecessary for you to do a lot of work, giving you free time and free money in a way!

7. PASSIVE INCOME

I think this is the one thing that intrigues most people when it comes to real estate; the prospect of passive income. Passive income is money you make by doing nothing. For example, a tenant is paying you $3500 per month and the installment you pay to the bank is $2000. This makes you a passive income of $1500. You will make this income no matter what unless if the tenant decides to stop renting the property. (you can still find another tenant, no worries)

8. Financial freedom!

This is the goal everyone would want to reach at some point in their life. With passive income and other aspects of real estate, they can help build the income needed to exceed your expenses; this is when financial freedom is obtained. 

Summary

In conclusion, real estate is a really good way to achieve financial freedom. It requires zero cash to start off with and it can give amazing returns!

*I hope this post has helped or motivated you into real estate! Sorry for not posting yesterday, I had technical difficulties haha

Remember, nothing is too old for everybody!

Mindset

Good morning!

I'm currently reading a book by Dr. Peter Yee on real estate investing and what it has told me is to have a clear sense of direction and an optimistic mindset.

1.Success is no easy path

The book has told me that success is not a straight path. It involves many twists and turns along the journey.

Everyone wants success immediately no doubt but it's about the learning process towards success that makes someone successful!

2. Self-correction

I'll admit. I have many flaws at the moment but the route to success requires self-correction in order to prevent the previous mistakes done. Therefore, I'll be working on self-correcting myself on many bad habits such as procrastination!

3. Emotional discipline

The book has told me to control my emotions when on the journey to success. Success can only be obtained by the emotionally disciplined.

I believe this is true in the matter of a fact. Impulse purchasing and budget-less shopping are all due to the lack of emotional discipline.

Lavish spending could disrupt your journey towards success

Fortunately, I am lucky enough to have parents that trained me to be an emotionally disciplined person (or that's what I feel haha). However, I still have to keep an eye out for my emotions as impulse purchasing can happen to anyone. I must not let the urge of purchasing an item overcome my urge to success!

4. Finally, fear.

Fear is apparently a major factor for someone not taking action and living a risk-free life but what's the point of living a risk-free life when you only live once? I'm taking action right now by learning the fundamentals behind real estate and probably business too (in the future) to prepare myself for adulthood!

If you have a fear right now, I'd suggest you to take action against it and repel it! Fear is something that has prevented many highly intelligent people from succeeding and I'm not letting it take over me and my readers!

Summary

1.  Be optimistic
2. Be a doer not a thinker
3. Emotional discipline could decide your success
4. Fear is an evil thought that everyone must get rid of! 

* I hope this article has motivated you or helped you! It has definitely helped me!

Introduction

Hey there!

I'm a 16 y/o student from Kuala Lumpur, Malaysia that's trying to learn the fundamentals and processes of real estate and business!

Kuala Lumpur, Malaysia

Why write a blog about my learning journey?

I really just want to share my learning experience with the world and I hope to educate many people with my soon to be vast array of knowledge!

My dream would be to one day show what taking action can lead to! I hope you will enjoy following me through this unique learning process!