Buying properties at a discount

One of the fundamentals of property investment is to buy at a discount. You build a safety margin when you buy at a discount. In fact, if you buy at a discount, you would have made money from the purchase already. On the other hand, if you paid higher than the market value, then you would have to wait for the price to rise before you can make money.
But of course, everyone knows this already. The problem is to find such a property. You have to search, and search hard. So, where can you find these discounted properties? One answer that leaps out is property auctions. As I have written about auctions before, I’m going to share another answer with you today – motivated sellers.
Motivated sellers
There are people out there, termed as motivated, desperate or distressed sellers, who are willing to sell their properties below the market value. Yes, some will even sell at a lower figure (at a loss) than the price they paid for the property. So, all you have to do now is to locate these sellers. Look a little bit harder at the classified advertisements in the newspapers, and you will find them.
Although it can be because the property is in a poor location, but often, there is nothing wrong with the property itself. There are a multitude of reasons why a seller becomes a motivated seller. For example, perhaps the owner had died and the children are selling the property to share the spoils. Perhaps the owners (husband and wife) are separating. Or perhaps the owner is facing a cash crunch and need to free his or her cash flow. The owner might be moving, migrating or may have lost his or her job. Whatever the reasons might be, the main thing is that they are willing to sell the property below the market value. A better way is to view the sellers as people who are in need of help. The sellers need to sell the properties to raise cash. And as long as the properties remain unsold, their problem remains.
At the same time, you have to be realistic as well. If the market value of the property is RM500,000, you should not expect to buy it for RM100,000 or even RM200,000 (unless the owner is really, really desperate). If you offer RM350,000 for it, there is a good chance the seller will agree. While that is not exactly a fire sale, you are getting a very good deal. In this example, you are getting a RM150,000 discount (30 percent off). That is a fabulous deal.
During a financial crisis, then it becomes a fiesta! There will be plenty of properties that will be going at prices well below the market value. Why? Because there will be thousands of owners who are unable to meet their financial obligations anymore. You will be doing them a huge favour by buying the property.

JB's nightlife takes a hit

JOHOR BARU: The opening of the two casinos in Singapore is hurting Johor Baru’s nightlife, with many entertainment outlets and massage parlours experiencing a drastic drop in business.
Johor entertainment outlet operators association president Tan Yam Meng said that many people, especially those operating pubs and discotheques, were complaining about the drop in business.
There was a lot of hype about the two casinos and how Johor would benefit from the spillover.
However, it has not been good for the state’s nightlife as locals now prefer to head to the casinos after work to gamble and enjoy round-the-clock entertainment, he said.
He hoped the state government would revise the 1am closing time to 3am.
Tan pointed out that Malaysians make up 70% of the clients frequenting nightspots while the rest were Singaporeans and tourists.
“Now with so many Malaysians going across, it is hurting our business. Why would someone want to enjoy in Johor Baru until 1am when he can do the same for 24 hours at the casinos?” he said.
He added that if the trend continued, many local entertainment operators would have to close shop.
Tan said there were about 100 entertainment operators within the Johor Baru district.
The cost of opening an entertainment outlet was high with anything between RM100,000 and RM1mil.
Some had experienced a 40% drop in business.
“While the hotel industry seems to be enjoying better business with people opting to stay in our hotels, many people are now heading to the casinos instead of frequenting our outlets.
“The market is getting bad and we hope the situation will stabilise within the next six months,” he said, adding that offering discounts or other promotions would not be able to lure the people back.
Soon said that extending business hours was a step in the right direction as businesses were surviving on their local customers.
The Marina Bay Sands casino started operations last month while the Resorts World Sentosa opened its doors in February.