Monday, September 28, 2009

You cannot Grow Land
Land is only supplied once and for all. Human are capitalizing it on daily basis for property development while global warming silently steal from us through melting of ices. We are virtually getting less and less land on daily basis. Whether you like it or not land value will rise consistently throughout time. Here I would like to share with you another few factors that you might need to know in the event you want to add some vacant land into your portfolio.

Property is all about location. Given choice definitely you prefer the perfect location at reasonable price. Bear in mind, it’s not easy to find cheap deal nowadays as people are getting smarter day by day. Don’t always assume sellers are less smart than you seeing that all information is flowing freely around the globe. Like myself, I’m using Google earth program to do my site visit of the land that I intend to buy. The program give me all the information I need to made the decision like surrounding activity of the land, land condition whether is swampy or hill, distance to main road, all this will add or minus the value of the land. Instead of visiting the land physically, through the program it does save time and speeding up your decision making process.

How far away from current development area? If you notice the way government strategy for town development, they always develop new township which is about 30KM radar from current development. This is what we called “Satellite Township”. So any land within 30KM radar is getting more and more valuable when government move their office, building more road and hospital, bomba, and etc. Classic example would be Kota Kinabalu, when governments open up Sulaman road back in early 1990’s the land price was transacted between RM20K-RM60K per acres. Gradually when Wah Mie Group open up their master plan for Indah Permai late 1990’s and moving of the federal office mid 2005 along the way together with building of University Malaysia Sabah the land price has reach RM200K-RM350K per acres. Currently with opening of 1Borneo, ongoing property development by Wong Kwok Group, Alamesra mix development and Hap Seng Housing project the land price has shot up above RM1.6M to RM2.5M depending on land location and condition. So you only need to take 25 years on average to be multimillionaires if you own 5 acres around this area which costing you RM100K early 1990’s. Now you are happy man with net worth not less than RM8M. Looking as this, all major towns in Malaysia will have the same opportunity. So why wait?

Land valuation also affected by the condition of the land. This referring to physical condition of the land whether it’s high hill, stiff hill or swampy land. Of course flat or a bit of hilly is the perfect but how many land fulfilled this condition? My dad ever told me, he love purchasing hill land provided the land is surrounded by swap area. Why? Simply you can sell you soil and get free flat land in the future. Double winning!! But bear in mind, when the particular area is under hot development no matter how swampy the land it is, developer won’t mind purchasing from you as they can pass the costing back to end user. Look at Dubai, they reclaim the sea just to build more property. History created when they build so many unbelievable properties like Palm Island and few world class towers above reclaim seas.

Another factor affecting land value is the types of land titles. As I mention early in “Types of Title” our Sabah land title mainly divided into 2 types that is Country Lease and Native titles. Country lease with 999 years of land tenure is the best investment I ever had. Of course for West Malaysia you have “freehold” and in Sarawak you can have “held in perpetuity” titles. My advice to land title collector, if can accumulate more for 999 years title to keep. Government has stopped issuing this kind of land tenure. So whoever have it, keep it and wait. The fortune will come one day.

By owning land, virtually you are getting richer day by day. As I always say if you own 100 acres of land that mean you own 4.356 Millions square feet. We assume our land value increase 0.01 per year. That mean you are getting richer RM43560 @ RM3600 Monthly or RM 120 per day. You are getting wealthy every second. That is if the land price increases 0.01, what happen if the land value up by 0.10 per year? Your net worth up by RM3600K per month!! So why wait to buy land and property? Might as well buy and wait!! Happy Investing.

You cannot Grow Land..CK Wong & KH Wong


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Was established since 20th Rejab 1430.
Just to educate myself.
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