http://www.sepanggoldcoast.co.uk

The Golden Palm Tree Villas, Sepang Malaysia looks about as good an investment as Ive come accross and believe me I look at many each day, heres why:

* £73000 for an entry level villa over the water

* Developer is a wholly owned subsidiary of the local state Government - to promote tourism amongst other activities
* A top flight ususual development in the shape of a floating palm tree
* 25 mins from Kuala Lumpa Int airport and the F1 racetrack
* 1hr 10 mins from the capital

* 8% guaranteed rent for 15 years
* Hassle free hands off investing - rental pool leaseback system available
* 30% of my capital at risk only
* 70% easy to obtain mortgages (apparantly), so Bank shares risk

* Benefit from the rise of Asia
* Prime beach property built over the sea - it doesnt get much better
* Safe and steady
* Leveredged investing

* Free flights for first 2 yrs
* 14 nights free use if in the rental leaseback pool (thats a saving of at least £2000 pa)
* Stable socio economic setting
* Swiss-Bel International hotel group will run the rental programme


With every investment there are always drawbacks, be they high prices, high risk, complexity or too many local mafia or global warming.

This one has the least risk of all foreign investments Ive studied.
One drawback is you can only own leasehold 99yrs, which I need to look into further but given how fast they have sold I dont expect this to be a deal breaker - again all deals have a down side.

I get nervous when it comes to properties above water. Malaysia is one of the countires that gets hit badly by tsunamis. Link beneath may prove useful.

http://www.mapsofworld.com/world-news/26-1...4-malaysia.html

Not really the right place to build a development like this then!

Dogbox, on a previous Malaysian thread you said "A longterm client of mine is Malayasian. He recenlty told me he had invested in beach property, as Im a bit of property - nut I asked him for details, but he totaly poo - poo'd the idea, leaving me with the impression capital growth is not a feature of the Malay property market!!"

Have you now got comfortable on the growth aspect?

In that thread, I commented "I once looked into chalets in SW France. The yield was superb but the chalets tend to need replacing after 14 years. The alternative was to spend a great deal maintaining them to extend the return for a few more years. Hence the "water chalet" set off alarm bells for me."

Do you have any info on how much the maintenance costs will be for the water villas and whether they will last 99 years?

Other thoughts:
Is the 8% rental increasing with inflation? If not, the resale may not move either.
How solid is the provider of the guarantee?
How does £73k compare with alternatives and properties not on water?

Guarantee is always as good as a booming property price.
8% seems too good to be true.

Malaysia seems to be an attractive place to invest tho.
However, believe Malaya peninsula does not have too nice beaches (there is a lot of shipping traffic), bar places like lankawi. Hence why Thailand/Lankawi are much more expensive.
This is however, closer to KL and SG is not too far away (one day, esp when they build a high speed rail link).

Am I alone in thinking 73000 shiny british pounds could probably buy villages in other parts of Malaysia?

And 2, it's a hut. On stilts. Worrying abut a 99 year lease is how can I say... "optimistic"?

Guaranteed rental?

Sean the developer is Swiss - Bel International Hotels a large Asian chain.

I await the sales contract but so far the written sales blurb states rental income is a minimum of 8%.

Its a 5* resort.

A lot of development going on in this 'Gold coast' so presumably the developers must think the beaches are decent.

Maintenance is supposedly $7 - 800 pa. Again I await the contract to establish whether 8%+ yield is gross or net.

Unlike say cash in the Bank I can lock - in my capital expense now yet the rent should grow over time, so for example in 15 years the rent against my spend today could easily be 20% yield so Im not overly fussed whther the yiled now is 7 or 8%.

Dont forget Im only putting in 30% - £22050 with the rest on mortgage covered by rental, not a bad deal and nice and safe.

Nearly all have sold out, certainly most of the upper floor properties.

DURABILITY - I hope the maintenance charges will cover up keep. Many prestigious developments in the Maldives and right accross Asia are built over the water so one would think the properties are designed to last / can be rejuvinated over time.


SEAN - you query on my freinds capital growth comments;

Perhaps he was correct in saying growth has been limited. This might be due to the aftereffects of thier 1997 crash.
The point is this development is very unusual and I think will become highly sought after - its not every day you get to own a 5* condo built over the sea in the shape of a palm. Many Humans will be starry eyed by such a resort once they can see it / touch it.

MALAYSIA'S SILICON VALLEY:

According to Wikkipedia Sepand contains a high tech corridor known as Malaysia's Silicon Valley. Another reason I think coastal property adjacent should be a good bet.


RESALE - My understanding so far is that the rent will increase over time as costs generally increase.
I suspect sush a high yielding, hands off asset would be one I would keep indefinately, afterall if rents are double in 15 years time my yield on spend would be more like 16%+


99 YEAR LEASE

Again Im checking this but so far Im told the lease will be renewed in 99 years at minimal cost.


BUY A WHOLE VILLAGE - someone said. As with Germany I could buy a lot more for my money, howver whether that would translate into a hassle free reasonably high income is another matter.

This was the first thing I thought of, but hey every investment has a downside.
Bombs in Morocco, Mafia in Italy, high prices in the UK, dodgy developers in Bulgaria, lack of snow in the Alps, increased sea levels in Brazil, uncertainty over German capital growth, toppy prices in Spain, disputes over land in N Cyprus, oversupply in Turkey.

In the end it comes down to risk / reward balance as ever.

Malaysia wasnt affected anything like Thailand. Asians gotta holiday somewhere. I would suggest the risk of being swept away on a Tsunami is vastly less than the risk of being mugges by a Ladyboy

How reputable is the developer? If he any business acumen, surely he would have someone professional build his website??? It looks like it was done by my 7 year old son!

It may seem irrelevant to you but it immediatly puts me off.

I have just come back from 5 months travelling round the world, one month of which was spent travelling from the Island of Penang of the North West coast of Peninsular Malaysia, down through the country and the coastline, KL and on to Singapore.

I have to say that whilst the country felt safe, food is truly spectacular and the people very friendly, it is still somewhat of a developing country.

I don't believe the beaches and standard of tourist facilities are of the quality of many other locations I visited (inc Thailand, Hong Kong, Fiji, Oz, NZ, USA, Brazil)

I therefore would say that 73k seems to be a lot of money for that part of the world, which I for one wouldn't part with.

Batu Ferringhi Beach in Penang is supposed to be one of the best and most famous beaches - and is indeed littered with many international standard hotels, but the water quality on the beaches is very poor and over time will begin to really deter tourism.

Hope this little insight helps.

What I would be intrigued to know is how/where would you raise a mortgage for this property taking into consideration Malaysian Islamic banking?

Tsunami's in the Straits of Mallaca??? I dont think so, considering it is little more than a thin strip of water that is enclosed by land to the east and west, which is the only directions there are any underwater fault lines, of which can cause a major Tsunami.

It always makes me chuckle, when I hear of people being worried about a large Tsunami, since the last one hit Thailand/Sri Lanke etc. I mean, how many have there been in our lifetime, which have caused such devestation? I can think of only one.
Its similar to people being worried about living in California, because of earthquakes, except theres FAR more chance of being caught in an earthquake in the US, than there is of being caught up in another major Tsunami.

I must admit, I have reservations about owning a property that overhangs water, but as long as the developer has at least a 10 year build guarantee, there shouldnt be anything to worry about.

The developer is a wholly owned subsidiary of the Selangor State Government.

The whole Gold coast area is a major project for them in order that they can establish a world class beach centred tourism centre close to the capital and KL airport.

As someone else stated they look like huts on stilts.I wouldnt go as far as classing them as a villa far from it and the prices are very steep.

One thing that always sets the alarm bells ringing is these rental guarantees. It simply means that the developers have inflated the prices to give this back to investors. How can a developer guarantee that the property will be tenanted for 15 years especially in such an unknown destination.

I dont know statistics on malaysia being a popular tourist destination and it would also be interesting to see what is in the surrounding area? It looks like a hut in the middle of nowehere, is there things for potential tourists/tenants to do?

Also the economics of the whole country dont convince me and i doubt the locals would be able to afford the going rates. And it looks like many other countries the resell market is zero

Anthony, with respect you dont know what your talking about.

Last time I checked Malaysia had the 16th biggest economy in the world and is attracting high tech business from all over the world.

This 5* resort being built by the Government on an area called the Gold coast which is in totality is being developed.
This project once built (2009) will be run by another impressive group called Swiss-bel, a major hotel operator at the higher end in SE Asia based out of HK.

"Huts on stilts" - have you not seen the ultra - chic huts on stillts that typify many many 5 * resorts in Asia, the Maldives and the S Pacific? This is the exact property type I like. You assume a thatched room must mean walls made of cow dung!

You know life doesnt end at the white cliffs of Dover - we dont have some sort of reserve on moderntiy and money making.
Have you been in Asia? I have and I can tell you the UK counts for nothing. These are powerhouse economies and although they retain a lot thier traditions, they are very forward looking.

These properties will be an outstanding buy and very cheap for the mo. Checkout the cost of beachfront property in Barbados (which btw is a lot more backward than Malysia). You will see small condo units in 5 * resorts for well over £200000, and they are ten a penny where as a palm shaped on the ocean resort is anything but.

The rent is guaranteed and the price very reasonable - I consider stuff all over the world and this to me is one of very very few outstanding opportunities.

dogbox thanks for your response

Il try not to take offence at your first comment.

Yes i have been to Asia on numerous occasions

You didnt answer a few questions. The rental guarantee, especially in such an unproven resort being one. If the property price is not inflated can the developer really guarantee your rent when he himself has no idea of the popularity of the resort? Is he really going to risk paying out on a property for X amount of years when at best it may be tenanted for just a few weeks for eg?

As someone else mentioned, the prices are extremely steep compared to other parts of the country

Local demand?Can local malaysians afford to stay at such a resort?

Resell, is there a resell market or is this another Bulgaria?

"Huts on stilts" - have you not seen the ultra - chic huts on stillts that typify many many 5 * resorts in Asia.
Yes i have and i have stayed in a number of them in places such as Thailand. Probably 10 times more luxurious but at a quarter of the price. In addition that is the attraction for foreign tourists isnt it?Staying in breathtaking resorts in Asia and paying pennies for them?Not great for the investor and their returns which again puts a big question mark over the rental guarantee

Local amenities?Whats in the surrounding area?Is it a jungle? Does it have the usuals that will attract quality tenants?

Price is not steep its a bargain. I could say that I can buy a whole nice condition 40 room hotel in Germany for 30000e yet a studio in Berlin can be 3 x this price - you have to compare like with like.

Your assertion needs some evidence - where is there another 5* resort in Malaysia with the x factor appeal for this price? By this Imean an iconic design, 5*, run by a top hotel chain, close to the capital and of course beach front or over water.

Local demand - Kuala Lumpar central is just over an hour away so closer say than Brighton is to London.
The F1 circuit is closer still as is thier silicon valley.
Furthermore this strip is being developed into the largest coastal resort area anywhere in SE Asia.

Even if it was jungle which it aint - so what? Are you aware of the up market resorts such as Langkawi, Tioman or Rendang which are isolated yet attract monied people?

Quality tenants - this is a holiday resort aimed at the 5* end of the spectrum.
China is producing millions of cash dripping eagre tourists for these markets as Im sure you are aware.

The rent is apparantly guaranteed if not I could pull out, but I suspect I wont. Ive seen other resorts such as BANYAN CURVE offering 13% cast iron guarantees and that is nowehere near the class of this.


Resale - make your own decisions. I think this iconic offering will be in much demand from aspirant Kuala Lumpians.

I actually dont expect the rental to be guaranteed - Im far to cynical for that although everyone assures me it is. If not, its still a great buy.

Remember this is a Government development agaency - not some high risk new developer.

Does anyone know how deep the sea is below the villas? Are you able to jump in and swim from them?

It doesn't take a tsunami as big as that of Boxing Day 2005 to wipe out property on the sea.

Dogbox, you never buy properties, you are just paid to make other people buy.

Hi Soup Dragon/Dog Box,

Just a question regarding property insurance. When people purchase overseas property, don't they normally also purchase insurance that will protect them from natural distasters, building damage, floods, and also loss of rental income?

How straight forward would it be to get your money back if you lost your overseas property from a natural distaster or property damage from your insurance company?

And would'nt there be insurance for this development?

Dogbox,
Seems that we have at last found some common ground after our Saidia epics!
I am 100% in agreement with you on this one and have also purchased a one bed here-it is one of the best opportunities i have encountered in quite some time.
I must confess i picked up on this one a little later in the day than normal and only had the option of a Travellers Palm.Well located as it is,i have a strong preference for a 2 bed and wondered whether either you or anyone else may be interested in trying to procure a 2 bed cancellation as co-owners ,rather than individually owning the smaller units.
Not only would it lower the entry point,but it would also provide additional flexibility for inviting friends and family.
Would be interested in your thoughts.

My wife read about these stilt type bungalows last year and that was part of the reason for our holiday to Malaysia over Xmas.
We had a good time, KL, Singapore for the new year, Kotakinabalu, Sandekan for the Orangutans, and back to KL for our flight back to London.
We had a spare day before our flight back so we went over to Port Dickson to see the area and get an idea of the place. Personally i didnt think much of port dickson, it is very much a locals holiday resort and there are plenty of very very cheap places for the locals to stay. Some of the area i saw was a bit neglected with abandoned buildings, the most impressive of which was a quite weathered unfinished shell 400'x 60' , 15 - 20 storeys high on a 500 x 100 tract of land running down to the beach which was very overgrown. They call them 'abandoned get rich quick from the tourist schemes' in Greece, but they are usually small ! . The beach was not very wide but very long and clean.
I think Malaysia is a lovely place and we may invest there one day, maybe a KL apart-hotel so we can use it ourselves, or this when we retire.

Personally i would stay away from this investment because i dont think there would be much resale value after the rental guarantee, and the locals wont be paying this amount of money when they get housing throughout Malaysia far cheaper.

It seems you are kind of neutral gearing on this so wouldnt be down much if it went t!ts up. Good luck anyway

AustralianInvestor. What is covered varies from insurance policy to insurance policy. Many in Britain do not cover acts of God and I suspect the same will apply to a lot abroad. Even if insurance policy did cover the risks you are concerned about you should consider how financially secure those providing the insurance policy are. If its a small company that only provide insurance for a few holiday developments then an Act of God could bankrupt them. This has implications for you getting your money.

Even if insurance policy covers what you want and providers are financially stable you should remember that they employ loss adjusters to limit their losses. If property is worth £100k you can bet your bottom dollar you'll have a fight on your hands to get near that figure from the insurance company.

It is good that the developers / builders appear financially secure (from what i can tell from posts above.) If act of God were to occur during the build they should still be able deliver, albeit to new timescales. If they weren't financially secure anything you had paid would be lost.

Would be interested to hear Sean's views, I think he's more knowledgeable than I on insurance.

As I say Im very fussy, and as usual I have uncovered a negative;

Ive been trying to get hold of daytime beach photos and until yesterday had no sucess, strange when you think the beachscape is at the heart of such investments.
Finanlly got some daylight photos and they show....................... a brown sea.

Ive been onto the agents and they say this is down to the piles being driven 200m into the sea bed which has clouded the sea TEMPORARILY.

Mmmmmmmmm I thought.

Ive now requested pre work beach photos, afterall any sensible developer will have taken these in the planning stage.

Surely developers of this calibre wouldnt build beachlife property over the Asian equivolent of the Maldon mud flats?

Interesting comment by your agent Dogbox. He failed to mention some of the 50.000 commercial vessels that ferry 90% of Japans oil supply past the resort as well. If Cole wants to jump in off his chalet, I would be suprised, and although the complex is suggested to be far better quality than Banyan, at least Banyan is up and running (successfully) and producing the yields to the first phase investors. I heard this morning that there was going to be a Palm built in Alicante - where next? Margate??

Well Dogbox, this just shows how much research you do before commiting to purchase something...

OOPs, sorry, you never purchase actually.

(LOL) Rondy you funny old goat.

Hey Andy2K don't knock Margate dude, I've just purchased a chalet there with views to the ice-cream van.

I have'nt committed, just paid a reservation fee is all.

As I say Im very fussy. When I do finally committ you call me a ramper (for example Berlin, Saidia etc), when I dont committ you call me a fraud.
One of these days Ill do something to please you

More than one year after the last post, has anyone actually bought on this development?

I agree with Anthony
If i was investing 73k i would be heading to Dubai

Malaysia is not as stable as you think. For one thing the Govt discriminates against the Chinese and Indian minorities. The former Muslim prime minister was also known for hating the West. Who's to say that another nutter won't get in?

I'd be very nervous investing money in a country like that, as much as I am fond of it from a travel perspective.