Buy-2-Let apartments in Malaysian holiday Resort

with 8% rent guarantee for 5 years

 

Only *£43,000 & 65%ltv mortgages available

(*Based on price of RM 275,000, exchange rate of 6.4Rm to £1 & mortgages subject to status)

Only £3000 reservation deposit required

 

2nd PHASE NOW RELEASED WITH COMPLETION DUE IN 2010

  About Malaysia:

    Malaysia has so much to offer …

It is a beautiful and culturally diverse country with a fusion of heritage, religions and races Malaysia is in the heart of South East Asia and is a manufacturing and business hub With stable; economics, politics and society in general It has a population of approx 25 million 70% of population has secondary education or higher Stable inflation and low interest rates The country is a very popular tourist destination, with tourism growing fast year on year High domestic tourism which is good in regard to this resort as adds investment security  Booming real estate market and little effected by the current ‘credit crunch’ Property laws based on Australian and UK system and ‘foreigner friendly’ Currency expected to appreciate over coming years Low unemployment, under 4% and low crime rate especially in the rural areas Great climate and scenery (all year round temperatures of 70 to 90 degrees) Outstanding culture, history, food, leisure and sites of interest Friendly, good service and great value Low taxes and a sophisticated banking and legal system (capital gains tax in Malaysia is suspended at the present time!) Easy and relatively cheap to get to (direct flights from all main UK airports from £400) Well located in the centre of South East Asia, well situated for the future A wonderful place to holiday as well as being a sound investment choice

The A’Famosa Resort:

This popular existing holiday resort is situated near Melaka, in central Malaysia, only 1 hour approx south of Kuala Lumpur the countries capital and under 2 hours north of Singapore.

It is a well known resort and is used by domestic tourists as well as international holiday makers.

With a vast range of attractions and facilities, especially for families.

 

About the Project:

 

A development of only 84 low-rise apartments in two phases, with over 50% sold in the first two months of marketing.

 

Located in a well-established family orientated holiday resort only 1 hour south of the countries capital city Kuala Lumpur. 

 

The resort has achieved many awards since its inception in the eighties and now leads the market in Malaysia for family focused activity holidays. With an extremely high occupancy rate (over 70%), the vendors are able to offer high yielding rental guarantees on a leaseback scheme and still give the owner 3 free weeks per year personal use – a rare combination of ‘sound investment and holiday home’.

 

Set in approximately 1,300 acres of lush countryside the resort offers holidaymakers accommodation in villas, condo’s or its 4 star hotel. The resort facilities include; a 27-hole international standard golf course, a water park, animal world safari park and a long list of varied outdoor activities for all the family as well as evening entertainment. 

 

The apartments are large two-bed units in a low rise blocks (three floors only) next to the Golf course and come fully furnished.

 

Buyers have the option of taking a 65% loan to value mortgage (subject to status), whereby only having to find 35% deposit set over an economic payment plan or pay outright. The rent guarantee is set at 8% of the purchase price for five years (term renewable after this period). The rental income amounts to approx £3500 per year, more than £17,000 over the 5 years and this income covers a 65%ltv mortgage at the current interest rates and maintenance costs as well as giving the owner three weeks free use each year. On top of this there is the capital growth to take into account which is expected to be good in Malaysia over the coming years.

 

About the apartments

 

These units really are a great addition to an overseas property ‘buy-2-let portfolio’ and offer the perfect combination of being a sound investment as well as something that can be used as a fantastic holiday home.

 

With good sized accommodation (over 1000 sq ft), including two bedrooms, lounge/dining room,   two bathrooms, kitchen/utility, store room and a good sized balcony, plus covered parking.

 

The units come furnished and ready to rent within the hotel program and the surrounding area will be communal gardens. The first phase is almost complete and the second phase will complete by approx March 2010 (see below, photos taken of phase 1 on a Knight Knox site visit in July 08):

 

The Investment

 

These apartments are designed to be sound buy-2-let investments that can also be enjoyed three weeks per year for free and that will ideally grow well in terms of capital appreciation over time.

 

The rental yield is high at 8% and moreover this income is guaranteed by the developer, for the first five years to begin with, renewable thereafter.

 

The resort actually exists. I.e. it is not some ‘off-plan dream’ that may or may not happen or be as promised, but a real holiday destination that is already doing well and this is why the developer can guarantee the rental income. Also these units are currently the only low-rise apartments in the developments (others are high-rise or villas and these are the only ones right on the golf course).

 

We invite you to discuss this project with our consultants and when you are satisfied that you want to proceed you can do so by:

 

Deciding to purchase 1 or more apartments and choosing a unit/s Securing this apartment by paying Knight Knox a £3000 reservation deposit Choosing to either apply for a 65% ltv mortgage (subject to status) or pay outright The deposit balance is paid during construction as follows:

 

On phase one:

Because these apartments are almost fully complete and sold out, completion on these (and therefore full payment of deposit) is due upon contract.

 

On phase two:

These units are set to complete by March 2010 and therefore we have an excellent payment plan in place:

 

                              £3000 paid on reservation

                              £5000 paid 90 days later

                              £3000 paid 90 days later

                              £4000 paid 90 days later or just prior to completion as appropriate

 

Total deposit required = approx £15,000 (*note prices are set in Malaysian Rinngit so there may be slight variation that will be ‘evened-up’ on the final balance payment).

 

The above payment plan is if a buyer is taking a 65% loan to value mortgage (subject to status ofcourse), or the full value of the unit can be divided in the same proportion over the same period.

 

Facilities & attractions include:

Safari Park 27 Hole Golf course Water world Equestrian centre Cowboy town Shows and entertainment Restaurants Gardens and grounds Micro light flying Go-carts, bikes & buggies Paint balling & Archery Fitness club & tennis courts Hotel and club house Parks and waterways Short drive from lively Melaka 1 hour approx to KL!

Questions and Answers

 What is the expected capital growth for Malaysia?

Ofcourse this is always hard to predict but the average over recent years has far exceeded 5% per year and this has been expected to continue * see illustration below which we feel is very conservative

 How much deposit do I need?

If you are able to qualify for a mortgage you can put as little as 35% deposit in, which is approx £15,000, and this can be spread (on phase 2) over the build which makes this investment very affordable. (plus *purchase costs)

 What is the rent guarantee and how does this work?

The rental income is guaranteed at 8% of the purchase price per year for 5 years (approx 22,000 Rm / £3500) and after this period the leaseback terms will be renegotiated relative to the current property value etc.

 Is Malaysia a nice place to visit?

Yes – without doubt it is one of the best places to visit in the world – offering the excitement of KL (a busy cosmopolitan city with so much to do) to some of the finest beaches and resorts in the world. This resort, where your apartment is located, is great for holidays especially if you have or planning to have children. The value for money, food, history, culture and service are just a few of the reasons why people come to Malaysia.

 What is the tenure?

The apartments are leasehold (because they are within resort grounds), on a 99 year lease with 86 years remaining, renewable there-after.

 Can I get paid the rent guarantee in advance?

The rent is guaranteed because the units will be occupied and generate income, subject to bank approval (if there is a mortgage involved) the developer will pay the first two years rent to the new owner in advance 28 days after completion, then year 3,4 and 5 in advance per year. This is particularly attractive if you wish to invest elsewhere with your capital.

 What is the capital gains tax when I sell?

Capital gains tax has been suspended in Malaysia… any profit you have made you keep (in Malaysia – consult a tax advisor in regard to bringing money into the UK or elsewhere).

 Is the purchase price subject to change?

Not after a reservation deposit has been paid (i.e. RM 275,000, at present)

 What are the purchase costs?

*Total purchase costs are approx £2500 – this is for all legal work, government purchase taxes, valuation and mortgage set up.

 What are the annual running costs?

The total annual running costs are approx RM 1600 / £250

 Will I always get to stay in my own apartment when I visit?

Subject to availability yes, book in advance and stipulate your apartment number, but if for some reason its not available you will stay in a like-for-like apartment.

 Is the purchase process straight forward?

Yes, as much as it can be. There is good support from the lawyer, Mortgage Company, developer and ourselves so hopefully everything will go smoothly for you.

 What type of mortgage is it?

This is ofcourse subject to change until your particular mortgage is agreed, but at present we have been obtaining 65% loan to value mortgages at 5.5% interest rate over 12 years.

 If I take the 65% mortgage will the rental income cover my loan repayments?

Yes, at present this is the case we believe, this investment offers ‘positive cash-flow’ each month as well as capital growth potential.

 To be clear, are you saying that I pay £43,000 for a large 2 bed apartment on a golf course that I can use for free for three weeks each year and even in the first 5 years I receive approx £17,200 in guaranteed rental income back!?

Yes – this is correct. That’s why this is proving very popular and selling fast.

 Ok, that all sounds good but what is my ‘exit strategy’?

You can either: Keep the unit for the long term, entering into future leaseback agreements and receiving healthy rental income… note: in only 12 years approx the apartment would have paid for itself completely in rental income if at only 8% per year of the original purchase price! Plus you’ll own it at whatever its current value would be. You can sell it privately or via an agent, or via the resort or developer.

 So give me an estimation of possible returns, why is this a good investment?

If you buy a unit at £43,000 and hold it for 12 years say (a medium term investment timeframe), and received 8% rental per year of the original asking price (though rents are ofcourse likely to increase infact), and the property market experience even a ‘low’ 5% growth per year… this is how your investment would look:

 Purchase Price unit £43,000

Mortgage taken up of £28,000

Actual cash invested £15,000 deposit plus £2500 costs = £17,500*

8% rental income per year over 12 years assumed to cover mortgage and maintenance…

Mortgage payments over 12 years covered by rental i.e. mortgage fully paid off

Capital growth at 5% per year = new value of apartment £77,000+

 

So you invested £17,500 and have an apartment worth £77,000 with no mortgage on it.

A 440% return on your ‘actual cash invested’* over 12 years (37% return per year!)

 

Plus you now have (by 2022) an income-producing asset with no loan attached to it, you have been able to use it for 36 weeks in total over those 12 years and these investment return figures are assuming fairly ‘low average capital growth’ and steady/low rental income.

 

Property details summary:

 

Unit Type:
Fully furnished apartments.

2bedrooms, 2 bathrooms, Kitchen, Utility,

Lounge/dining room, store & balcony.

 

Approximate gross built up area of unit;
1065 sq ft. Plus parking space on ground floor

 

Purchase price;
Ringgit 275,000.00
(£43,000.00 where £1.00 = RM 6.4)

Master Title;                                                             99 year lease

Expiry;                                                                      18th December 2094 (renewable)

Unexpired term;                                                     86 years, at January 2008

Completion Date;                                                   One month after Certificate of Fitness issued March 2010

Payment of balance purchase price;                Shortly before completion date.

 

Additional features:

 

1.     Rental Return for 5 years fixed at RM 22,000 per annum leaseback.      (Note that the Leaseback only starts one month after Completion Date and rent will be apportioned according to term remaining on leaseback agreement).

2.      FREE 21 days stay per annum.

3.      FREE Individual Golf Membership.

4.      FREE Individual Animal World Safari Membership

5.      FREE Individual Water World Membership

6.      FREE Flying Club Membership

7.      FREE Equestrian Club Membership

8.      FREE One Covered Car Park

9.      FREE Furniture for your Unit

10. FREE use of communal club house

 Annual Running Costs for purchaser as per leaseback agreement

 

1) Ground Rent and Assessments
Approx Rinngit 500 / £80

 

2) House Owners Contents Insurance
Approx Rinngit 650 / £100

 

3) Fire Insurance
Approx Rinngit 500 / £80

      **All the above is subject to Contract and Without Prejudice – further legal, tax and

                   Detailed advice will need to be obtained. You enter into a contract with the vendor

                   and investment predictions are not a guarantee or contract.

          

              **Notes: All prices are in Malaysian Ringgit. Bank loan / mortgages are between the

                   lender and the purchaser and subject to status. Max age to qualify for a mortgage is

                   65 with mortgage term relative to this (i.e. if you are 55 you can only have a 10 year

                    mortgage).

Any information in this web site, has been supplied by the developer and is believed to be correct at this time but can be subject to change. All Prices of property are secured in the local currency of the country of purchase and represented in pounds as an approximate equivalent exchange rate.All present exchange rates will be applicable at the time of purchase.  All prices, contracts and details should be confirmed directly with the developer and lawyer at time of purchase.Please note that we do not  enter into any form of contract via this medium, nor is our staff authorised to do so on our behalf. You may also refer to our full terms and conditions on our website.