Property investor Goh Kuan Keat (KK Goh) is no stranger to financial hardship, not when he was left with just $327 in his bank account back in 2002, after spending most of his savings on his first child.
"I spent most of my savings on my son, such as to visit the gynae. I realised I had to raise my financial quotient in order to support my family," says Mr Goh, whose son is now 15. He also has a 10-year-old daughter.
Mr Goh, 44, learnt creative investment strategies from property investors who made it rich and started his personal property investment journey, using the salary from his corporate job as capital.
After racking up 20 years' experience in the corporate world, Mr Goh, an electrical engineering graduate, decided to pursue property investing full time last year.
"I am now a property trainer. I teach people how to retire young and rich through successful property investing."
Noting that the hospitality and tourism sectors are on the rise, he plans to buy boutique hotels that are in the midst of construction around South-east Asia with his friends.
"These hotels usually have about 50 rooms. I believe in their potential as they appeal to millennials," he says. "One in Malaysia will open in about three months. The one in Chiangmai will open next year."
Q Describe your home.
A My home is a two-bedroom plus study condominium unit in Bukit Timah. It is 925 sq ft and was bought in 2008 for $820,000.
The down payment was 20 per cent. The stamp duty was $19,200. It has appreciated 17 per cent and is worth $960,000 now. It is fully paid.
I like to buy condominium units. It makes better financial sense due to a higher return on investment compared with landed property.
I chose this location as it is in central Singapore and it is convenient to go downtown. It is near amenities such as supermarts and shopping malls, as well as the train station.
It is also close to the Singapore University of Social Sciences and Ngee Ann Polytechnic. Thus, it will be easier to rent the unit out to students if I choose to do so.
I believe a property needs a dual purpose - home stay and rental.
Q What are some properties in your portfolio?
A My first property was a five-bedroom Housing Board flat in Jurong West. I bought the 1,237 sq ft unit for $288,000 in 1999.
The down payment was 10 per cent and stamp duty was $3,960. The monthly mortgage instalment is $1,013.
I chose this property also because of its proximity to shopping malls and train stations.
It has been rented out since 2008 at a monthly fee of between $2,300 and $2,800. I am renting it out to workers from Jurong industrial estate. The gross rental yield averages about 10 per cent annually.
It is now worth about $500,000. I am keeping it for long-term rental.
In 2002, I bought a penthouse in Kuala Lumpur City Centre (KLCC) for RM1.7 million. It is 3,203 sq ft and has four bedrooms.
The down payment was 10 per cent and the state consent fee was RM1,000. It is fully paid.
I bought this unit as its price was very reasonable and it was a freehold property, which means there is high value retention.
I always look at the price point of the property. There is huge potential for growth and price appreciation at KLCC. The area has high development potential. In fact, there are some condominiums and a hotel being constructed there now.
The unit has been rented out since 2012 for a fee of between RM8,000 and RM10,000 monthly. Gross rental yield is about 7 per cent on average.
It is worth almost RM3 million (S$960,000) now. I will keep it for long-term rental.
I also bought a unit at The Astaka, a six-star luxurious condominium in Iskandar, for RM2.32 million in October 2013. It has three bedrooms and is 2,207 sq ft.
The down payment was 15 per cent and the state consent fee was RM11,000. The monthly mortgage instalment is RM12,200.
I chose this property as it is iconic - it is the tallest condominium in South-east Asia at 70 storeys high. It is near Johor Baru city centre and Singapore, and it is convenient to travel between Singapore and Johor Baru since the train station is nearby.
As a "trophy property" with limited units, should I sell it 10 years later, I can most probably fetch a high price for it. Also, it is a freehold property, which is rare in Singapore.
It is worth RM3.4 million now. I am keeping this unit for home stay as it is very spacious. It will cost much more if I were to buy a unit of the same size in Singapore.
Q Describe your property investing strategy and market view.
A Location, price and potential of the property are the metrics I use.
Location-wise, I buy properties around the city centre, as it is easier to find tenants. It is where people work, and where expats will stay.
As a city state, Singapore is unique. It is not too hard to find tenants anywhere. For overseas properties, if the location is unfavourable, one may not find a tenant for years.
Regarding price, I buy the property below market value, so that I make a profit even if I sell it at market value. One makes money when buying properties, not only when selling.
As for potential, while Singapore is a highly developed country, other South-east Asian countries are emerging markets. The price point of their properties has not increased as much as ours.
If one enters their market early, one may double or triple one's investment value. In Singapore, one may still make profits from property investments, but prices for new launches are already very high.
In the next three to five years, I plan to buy more boutique hotels across various South-east Asian cities such as Ho Chi Minh City and Yangon. I believe they will have high occupancy rates, generating strong cash flow.
It is always a good time to buy properties. The way we pitch the property deal is crucial.
Over the next three to five years, our property prices should remain (flat). However, in the long run, property sizes will shrink and prices will increase.
First-time home buyers should start exploring new homes earlier.
Q What is your financing strategy?
A I took a bank loan from Standard Chartered for my Bukit Timah property as it had good rates. I did refinancing for this property.
For my Jurong flat, I took up a 30-year loan at a concessionary interest rate of 2.6 per cent. I have 12 years left to repay the loan.
I bought my penthouse with cash.
For my Iskandar unit, I took up a 20-year loan from Maybank. Interest is 4.2 per cent per annum.
Q What's your overall investing strategy?
A My properties form 90 per cent of my assets as I love the stability of property investments compared with other asset types.
I have earlier invested in Singapore stocks, US stocks, US options and gold. I focus on property but I still hold some stocks and options.
We are exploring an initial public offering for our boutique hotels. Once we have a substantial collection of hotels, we will list them as a real estate investment trust. This is my direction for the next 20 years.
Q What type of insurance plan do you have?
A For my Bukit Timah property, I have a fire insurance plan with a premium of $180 per year.
For the Jurong flat, I have a Dependants' Protection Scheme plan at $84 yearly and fire insurance plan with premium of $52 yearly.
I also bought a fire insurance plan with premium of RM1,500 per year for my penthouse.
I have a mortgage reducing term assurance with premium of RM32,000 for my Iskandar property. It covers a 20-year tenure.
In the event of death or total permanent disability, my outstanding property loans will be fully paid.
Q Your dream home is...
A My Iskandar condominium is my dream home as it is spacious. Space is a premium in years to come.