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MILLIONAIRESPLANET EZINE
money . success . freedom
Nov 2007 Issue #63
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By subscription only! Welcome to the latest issue of
"MILLIONAIRESPLANET EZINE"
You are receiving this newsletter because you
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are at the end of this newsletter.
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IN THIS ISSUE
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1. Feature Article
2. Quote of the Month
3. Your Question Answered
4. Special Offers
5. New Books from Truewealth
6. Latest News from TrueWealth
7. Disclaimer
8. List Maintenance
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Accounts Executive Urgently Required
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We are in urgent need of a fabulous Accounts Executive.
Please log on below for the complete details:
"http://www.MillionairesPlanet.com/opp_career.htm"
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1. FEATURE ARTICLE: FAQ ON PROPERTY INVESTMENT
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Since it proved to be a hot thing, I'm answering more
property investment related questions this month.
As usual, the questions are presented the way they came in
- broken English, wrong grammar and all.
Q1: I bought your book "How to Become a Property
Millionaire". It's a fantastic book and I want to put to
good use my knowledge gained from your book. However, I
would really appreciate if you can enlighten me as how to
discern the market price of an auctioned property as
against the reserve price stated in the proclamation of sale.
Thanks.
A1: A good rough guide is the selling price of similar
houses in the same area. For example, if a neighboring
house sold for RM200k last month, the price of the auctioned
property should not be more than that. Of course, if you
want a more exact figure, hire a valuer.
Q2: For the past 3 years, I fell in love with properties.
Any advice?
A2: Read (and reread) my three books on property
investment - "How to Become a Property Millionaire",
"How to Become a Millionaire Landlord" and "Winning at
Property Auctions". Of course, you can attend my property
seminar as well. The next one is on Tuesday 27th November
2007. (Full details are on the website.)
Q3: A the risk of being out-bid at an auction, I will
not only lose out on the property, but will there be any
fees incurred? Will I lose my 10% deposit?
A3: You will get back your 10% deposit should you not
win the auction. The only charge incurred is the fee you
paid to the bank for preparing the bank draft.
Q4: Great book! You're on the way (if not already) to
be the next Rich Dad of Malaysia.
One question, just an idea I have. Is it worthwhile/legal
for me to start a company and use this company to purchase
properties and collect rent before I even own 4
residential properties? I figure this way I could deduct
a lot of the expenses like renovations as necessities of
the business and get better tax breaks.
Are there other ways other than owning 4 residential
properties to consider the rent as business income?
A4: Thank you for your kind words and support.
1. Of course you can have a company for your
property investment. You can do this anytime, even
before buying a single property. However, you will incur
added costs such as incorporation and secretarial expenses
by doing so. Therefore, make sure you are serious about
becoming a property investor first before doing this.
2. Unfortunately, the IRB has recently declared that the 4
properties thing is only for businesses (Sdn Bhd) and not
for individual ownerships. In other words, if you own the
property under your own name, you cannot treat it as a
business income, regardless of the number of properties
that you own.
Q5: You mentioned that banks only allow loans up to 1/3
of an individual's monthly pay for property (real estate)
loans.
Say I earn RM3,000 per month. This would mean that
banks will only give a loan for a property which has a
monthly mortgage of not more than RM1,000. Is it correct?
Suppose the above is correct. Now, let's say that
it will take me 20 years to service the property loan
and that my pay stays fixed at RM3,000 per month for the
next 20 years. At this rate, does this mean that I cannot
buy any more property at least for the next 20 years
because my monthly pay of RM3,000 is not enough for me to
take another loan from the bank (unless my pay goes up to
RM6000 - then I can take another similar loan). If this is
the case, then how can I achieve to own 5 properties in 10
years? Please help as I want to buy my first property soon.
A5: 1. Yes, banks normally allow loans up to 1/3 of
your salary. However, they will consider other consistent
source of income as well. For example, rent collected or
commission from sales or royalty from writing books.
2. If you do not have other source of income and
if your salary remained at RM3,000 for the next 20 years,
your maximum loans will remain at RM1,000. And you deserve
it! Even an average person's salary will increase in 20
years, what more an above average you?
Q6: I noticed that you do not recommend service
apartment as an investment. Why can't you make money from
service apartment? Please elaborate.
A6: I do not recommend service apartment because I have
never met, known or heard any individual making money
from them (developers aside)! Isn't that a good enough
reason to stay away?
Q7: I would like to congratulate you for writing
fantastic books. I first read about property investment
by Robert K. 2 years ago but wishing that a Malaysian would
write books like this. I guess my wish came true....2 months
ago I just purchase my first property in Miri, Sarawak
with an extremely very low price. I'm very excited about
getting another property but I have a few questions
that I would like to ask you, since I'm very new in this.
I'm thinking of getting into property investment as
a full time, the problem is I'm working with family so I
have no income tax.
What do I need to do? My only problem at this moment
is more to income tax, can you please advice me on this
matter?
A7: I'm not exactly certain what is it that you want
to know but here goes. You only pay income tax when
you make money. If you don't make money, or not make enough
money, or lose money, you don't pay tax.
By the way, it's only money that is the criteria
here. Whether you do it full time or part-time is immaterial.
In other words, you can remain a full time housewife,
invest in properties in your free time, and make money and
pay a little bit of tax. Life is a bed of roses!
Q8: I have obtained a loan for a property recently
bought. This said property has been rented out and
provides me an income of RM1,000 per month. My loan
installment is RM950. Would like to find out:
1. Can bank mortgage interest be deducted in my
personal income tax?
2. What is the maximum amount (as in RM) that is
allowed for deduction? What are the criteria required for
a full amount of deduction?
A8: Yes, you can deduct the interest portion of the
mortgage from your income tax - all of it. For example,
if the interest portion is RM900, then you can deduct all
that. There is no other criteria except for the property
must not be the one that you are staying in.
Q9: Would like to have your advice for the followings:
1. Potential tenants
If we as a landlord have collected a down payment
from potential tenant and had agreed verbally to rent the
property out to them. However, at a later stage we realize
that they are not suitable after viewing their application
form. What can we do? Can we just refund them the down
payment without any compensation?
2. Existing tenants
If tenants continue to extend another year contract
after completing two year tenancy now has requested the
landlord to repaint the property. Are we obliged to do so?
Can we charge them the cost for the painting?
A9: 1. It depends on the agreement. Normally we would
refund their deposit and move on. If they not happy
about it, they may decide to take legal action against
you, but it takes too long, too expensive and too much
trouble. Weigh the risks and decide intelligently.
2. No, you are not obliged to repaint the property
(especially if it is not in the tenancy agreement).
However, you may want to do so to maintain the appearance
(and value) of your property. Perhaps both of you (landlord
and tenant) can share the cost?
Q10: I have attended your property investment course in
Holiday Villa last year. Herewith I want to share some of
my properties investment portfolio with you.
1. I have two rental apartments in Melaka, one I
rent out to KYM (Kolej Yayasan Melaka) and the other one
to MMU (Multimedia University). Both comes with rental
agreement and managed by rental management companies.
Both are giving me a positive cash flow.
2. I also have bought one condominium in Ulu Langat
with 25 years rental contract. The contract has been legally
stamp. What should I do to ensure that the developer
fulfill their obligation to pay the rental to me for the
next 25 years? Can any legal action been taken if they do
not fulfill any of the terms in the agreement?
A10: 1. Good for you. Way to go!
2. There is nothing you can do except for taking
legal action should the other party fail to fulfill their
side of the bargain. Of course, this is very expensive,
lengthy and should be avoided as much as possible. This is
why it is extremely critical to know who you are dealing
with. There is little point in having agreements with crooks,
bankrupts or people who are not trustworthy. So if you have
doubts about the other party - walk away!
Oh wait, yes! There is one other alternative though - sell
the darn property!
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2. QUOTE OF THE MONTH
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"We didn't buy anything unless we could pay cash for it."
* Ross Perot, founder EDS *
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3. YOUR QUESTION ANSWERED
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QUE: I was once read about reducing homeloan to half of its
value. I didnt find such offer in any bank except recently
at HSBC. But i was quite pusszle as how they go about it.
They mentions about overdraff and things, and about putting
my money and yearly bonus there....
Are this for real? I mean, is there any tricks which make
it end up I will be in trouble because I put in my money
into their account? yes, such as, i may need to used half
of my yearly bonus for emergency used or for new car down
payment?
Yes , I'm excited when they work out the calculation that,
off the RM180,000.00 my loan. if i put in money more than
RM1300.00 (which is my monthly loan repayment), say I put
in 15000.00 plus all my yearly bonus, I will settle the
loan in 6 years rather than 20 years. As much as I'm
excited, I'm also in doubt whether this is for real! Or
just a marketing trick that will trouble me in future.
Appreciate your view on this.
ANS: The answer to your question is YES. Yes, you can
reduce your housing loan to half or even less of its value
(or rather the repayment amount). It is not a marketing
trick or a gimmick. It is just pure maths. If you pay more
than the minimum amount or pay before the due date, the
interest portion drops, which will in turn reduce your
total repayment.
Of course, this does not apply to all housing loans.
Basically it only applies to loans that have daily interest
calculation and flexible payment schedule. For a more
comprehensive answer, read my Handbook "How to Pay Off Your
House Loan in Five Years or Less".
* HOT TIP *
Read "My Life & The Principles of Success" by Ross Perot
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4. SPECIAL OFFERS: Mini Woksyop Jutawan Hartanah kembali!
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Atas permintaan ramai, Azizi Ali akan mengadakan Mini
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Klik dilink berikut untuk maklumat penuh.
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5. NEW BOOKS FROM TrueWealth
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We have released four exciting new books recently -
"Mobile Millions" by Syahazzly Izham Hamzah, "ScamBuster"
by Azizi Ali, "Rahsia Blogger" by Mohd Farid & Mohd
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6. LATEST NEWS FROM TrueWealth
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1. AUTHORS WANTED
We are looking to publish more self-help books (both
in English and in Malay) to help you rise higher.
So if you are an expert in your field, want to help others
and make lots of money in the process, give us a call at
03-7880 1051 and ask for Nirmitha, who is our Publishing
Manager (e-mail: nirmitha@MillionairesPlanet.com).
We will be happy to look at your proposal and manuscript.
You might just be the next best-selling author in Malaysia!
2. FREELANCE TRANSLATORS AND EDITORS WANTED
We are also looking for freelance translators and editors.
For full details, please log on to:
"http://www.MillionairesPlanet.com/opp.htm"
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7. DISCLAIMER
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This e-zine is for educational purposes only. The author and
publisher specifically disclaim any responsibility for any
liability, loss or risk, personal or otherwise, which is
incurred as a consequence, directly or indirectly, of the
use and application of any of the contents of this e-zine.
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So that's it, folks. The latest FREE issue of the
"MILLIONAIRESPLANET EZINE". I trust that you've picked up
some useful stuff that can help you become a Grand Master
of Money.
So tell your mom, tell your dad, tell your girlfriends and
your boyfriends too, and ask them to join the party!
Until the next issue, keep your eyes on the money and
here's to the next million!
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