Thursday, August 25, 2016

Nusa Heights Service Apartment - My first Iskandar property investment (Revision 02)

Revision 02: Updated on December 6, 2020

I bought a FREEHOLD , 3 bedrooms service apartment unit at Nusa Heights, Block A, on 18 February 2012.

The size is 1,050 sq ft and it is a high floor unit, east sun facing, corner unit with 2 car parks.

The SPA price was RM 392,000
The developer gave 8% discount, hence the Net Selling Price was RM 360,640.

I paid 2% down payment RM 7,840 to secure the unit.

I took a 90% loan and capitalized MRTT Premium RM3,220 into the loan, the total loan amount was RM 356,020. I spread the loan tenure year to maximum at 38 years and monthly mortgage payment is RM 1,564.

How is the project doing so far?

Let's talk about the spending first.

(1) I started to pay loan interest only in November 2012 all the way until May 2015 while collecting the keys. So, the total loan interest I had paid was RM 21,485. That is rather a big sum of interest paid. If you buy the unit at the resale market, say in June 2015, you literally save this amount of RM 21,485! And guess what, the loan interest paid will continue to grow with years.

(2) I got 1 month rental + 1.5 month rental + 12 months rental. The total 10% agent fees I have paid was RM 2,325

(3) I spent RM 12,411 on furnishing (see the details below) as well as some miscl. furnishing cost up to RM 714 (to cater for short term stay of 1 month ).

(4) I also paid Assessment Tax to the Johor state, we call it Cukai Pintu or Cukai Harta. It is RM 714 per year.

With the above 4 items, I have spent RM 37,649.

The unit is tastefully renovated and furnished, don't you think so?

The entire unit comes with the false ceiling with down lights.

Now, let's talk about the receivables.

(1) The developer paid me the late delivery interest (they are late for few days only) of RM 751.78.

(2) I received FREE renovation, commission from renovation contractor and the real estate agent while I am doing the marketing, total amount of RM 25,625.

(3) I also received 1 month rental (RM 2,500) , 1.5 months rental (RM 3,750) & 12 months rental secured (RM 20,400), total rental : RM 26,650.

With the above 3 items receivable, total amount is RM 53,027.

So, total receivable of RM 53,027 - total spending of RM 37,649
= RM 15,378 ( a mere net profit).

The unit has a current bank valuation of RM 470,000 only. That is pretty sad. I am aiming for RM 650,000 at least one day.

The developer is giving 3 years FREE maintenance fees.

My monthly loan payment is RM 1,564 and the rental is RM 1,700 per month. So long your rental can cover the monthly loan payment, you shall be doing fine.

The rental yield is 5.66%, nothing too great to shout.

My second investment property in Iskandar will be completed by 4th quarter next year (2017). It is the first service apartment at Sunway Iskandar. I am targeting to market the Sunway Citrine service apartment unit at Airbnb platform when it is completed and fully furnished.

Revision 02: Updated on December 6, 2020

The new tenant will move in on December 30, 2020.
The new rental yield now is only 4.00%. :(

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