| I have learnt much about investments in the past twenty years. While much information were culled from books and magazines (like this one), there were also lessons learnt on a first hand basis. And while making money is a big part of the lessons, it's not all about returns. There are more. Thought I'd share some of the lessons I've learnt on property investment. Read and prosper! Move to a better neighbourhood as you grow wealthier A colleague of mine bought a low cost house in Taman Sri Muda in Shah Alam some twenty years ago. It was the only property he could afford at that time because he just started his career. Being a pilot, he earned a little bit more money than his neighbours. And he did the natural thing what all Malaysians do with their money – he renovated his house. In no time at all, his house was clearly the grandest house in the street and in fact, the whole area. While all the other houses remained looking like low cost properties, his house looked like a mansion and you could almost see it glowing like a beacon. It was good for his ego. But bad for his health. The first couple of times the robbers came, they were away so they just lost a few possessions. However, the third time the robbers broke in, they were inside the house. Caught by surprise, he was quickly overpowered by the three robbers and was beaten senseless. Fortunately they did not harm the family. They took the TV, VCR and a couple of items before splitting. I took him to the hospital and later to the police station. I learn two lessons that day: the first one is that grills are practically useless – the robbers broke it down in less than a minute. The more important lesson was not to make your house the grandest house on the street. While it may be good for your ego, it is bad for the health. The grandest house on the street is always the first house to be targeted by thieves and robbers. It is a calling card for thieves and robbers. So while you may want to renovate your house to make it bigger, nicer and more comfortable, do it in moderation. Don't spend an extra RM50,000 to make it the grandest house on the street. What if you are promoted or even better, blessed with a fortune? In short, what do you do when you grow wealthier? The answer is to move to a better neighbourhood. As your wealth increases, move to a nicer and better neighbourhood. By then, your house might be a practical palace but it will be just one of the many palaces in the area. The chances of thieves and robbers targeting your house, er, palace, are considerably lower. A side benefit of doing this is that you get a better quality neighbours! Lawyers are not created equal Some years back, I sold one of my houses in Kota Damansara. As doing the S & P is pretty much a standard affair, I hired the lawyer who acted as the developer's lawyer when I bought the property. My thinking was that she would be of a certain quality, otherwise the developer would have not hired her. Further, as she is already familiar with the property, it would save everyone a little bit of time and energy. Boy, that was a mistake! Every time I called her to inquire about the status of the sale, she said the land office kept rejecting the documents. I left it at that because I was sure that she and the land office knew what they were doing. The thought that the documents were being rejected because my lawyer did not do her job properly did not even cross my mind. It was only after the buyer's lawyer hinted that the problem could be my lawyer that it dawned on me that she could be the problem. I did some investigation and soon discovered that yes, horror of horrors, the culprit was my own lawyer. To cut the story short, I changed lawyers and the deal started to move after that. In the end, the deal was finally completed after over a year. As a side-note, I complained about the lawyer to the Bar Council and finally got some justice a year later when she wrote an apology letter and paid me some compensation. The lesson? Lawyers are not created equal. Once you've found a good one, stick with him or her – even though for 'standard' transactions. It will save you much headache and heartaches. Take what the salesmen told you with a pinch of salt Some years ago I visited a new housing project close to Shah Alam. At that particular time, the houses were only about 20 percent done. As I strolled along the streets, I noticed a river adjacent to the houses. "Wow! The river looks particularly close to the houses. Won't it get flooded?" I asked the salesman who was taking me for the tour. "Oh, you don't have to worry, sir," he smiled warmly. "Our engineers had taken that into account. Even at its highest level, the water will not spill out from the river. So you don't have to concern yourself with floods at all. It is a non-event." I nodded my head slowly and continued on with the tour. I must admit that I seriously thought about buying a house there. The design was good, the price reasonable and the location was acceptable. However, I could not get the thought of the river out of my head. It bothered me so much that in the end, I chose not to buy. A couple of years later, there was some continuous heavy rain for a few days. And yes, you guessed it – the whole place was flooded! You can just imagine my relief at that time. And as if to press the point further, the place was flooded at least three or four more times. It took a few years to get the problem rectified, and I'm still not sure if the people living there are actually at ease whenever it rains. That was a lesson that I hope I will never forget – take what the salesmen told you with a pinch of salt. In short, don't believe everything they tell you as the gospel truth. While I'm not saying that they lie, they may not tell you the complete picture. So listen to their pitch, yes, but always check and verify all statements. It may save you much heartache and much money. And oh ya, stay away from flood prone areas, no matter how cheap the property is. It will take years for the problem to be rectified – if it ever will. Some of my best investments were the ones I did not make.
Copyright © Azizi Ali 2011 | 
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