Financing your shop house.
When buying properties from investment purpose, take as much loan as possible (of course you only take as much as you can comfortably to pay back).Why?
First, property used as a rental (you can rent out the ground floor & convert the upper floors to BH) are eligible for tax deduction for interest portion. This is a significant deduction as the interest portion of the mortgage is extremely high during the early years (about 90% of the payment).
Second reason is tat by taking loan, you are freeing your capital. This allow you to use your free capital for converting or buy more properties. This is how rich people build wealth by using other people money.
Basically, we are limited by 2 things when come to applying for loan: our cash in hand(down payment) & our income. First limitation -Down payment (please refer to - part 1 for suggestion). Second limitation - our income. Banks normally limit the mortgage to 33% of our monthly salary.
To be continue...
Step:
1.Buy a shop house
2.Converting to swiftlet farm
3.Modification/improvement periodically to attract more swiftlets (for BH which are not achieving the desire result)
4.Continue investing in BH when you build up your cash flow from the 1st farm.
5.Retire.
Most common grouses people have about swiftlet farm is that it requires a lot of money to start. The truth is that you only need to source for down payment plus converting cost. Balance payment, let bank help you to pay.
Where to source for down payment & converting cost?
- your own saving
- gift from parents/family members
- loan from family members/friend
- sale of stocks,unit trusts & others investment
- claiming back your money who own you
- refinancing your present home
- EPF
- etc
Hi friend, you have to find one of the above way to start & the balance let the finance company help you.
To be continue...
How many bird nests you need to have in your firm to be able to harvest 1kg of bird nest per month?
Assume:
1kg = 125 nest
Example: Your farm have 400 nests. 1 year you may able to harvest 1,200 nests (1 year 3 cycle, so 400 nest x 3). Harvest per month = 1,200/12 = 100 nests per month or 25% of 400 nests.
conclusion: you are able to harvest 25% of bird nests in the firm per month.
So, if you need to harvest 1kg = 125 nests per month, your firm need to have 500 nest (125nest/25%). Note25%=0.25
From the above, you can now easily estimate number of nest in a farm from the monthly harvest. Example: Firm A harvest 2.5kg per month. You can easily say that Farm A have 1,250 nests in the firm
(2.5 kg x 125)/25% = 1,250 nests.
Go and try whether my formula acceptable or not.
It is not surprise nowadays to find a young, rich & successful swiflet farmers. Most of them become rich by either selling bird nest or letting go their swiftlet farm. Let discuss how they achieve this:
1) income from selling bird nest.
Assume you own a 20x70 shop house with build up area 2,800 sqf. After 3 years of operation, if your firm achieve >1,000 nest, you may able to harvest 240 nest per month which equivalent to RM8,600 income per month.
With 2,800 sqf, you actually can produce up to 2,800 nest every 4 months (max) with RM301,000 annually = RM25,083 per month (now you can retired my friend)
120 nest = 1 kg
1kg = RM4,300
8,400 nest = 70kg = RM301,000 annually
2)income from selling of swiftlet farm.
Assume after 3 years of operation, you farm have only 800 nest. The market price of your farm will be:
a)Current price of the shop house
b)Cost of converting to swiftlet farm
b)Current market price of RM1,000 per nest.
Let say current market price of 20x70 double storey shop house at the area = RM350,000.00 , Your selling price will be RM350,000 (cost for shop house) + RM30,000 (converting cost) + RM800,000(nest price) = RM1.2million. Congratulation, you are a millionaire now.
Swiftlet farming can help you to retire rich & young.
Everyone dream to retire young & rich. But have you ever calculate how much you need to retired? Let me show you the following formula:
PF = DI x (POA-RA) x 12 months
PF (Pension Fund)
DI (Desired Income) = Ideal passive income monthly
CA (Current Age) = Current age
RA (Retirement Age) = Ideal retirement age
POA (Passing On Age) = Age of passing
For example:
You are 35 years old & want to retire at the age of 45. How much you need to retire?
PF = RM7,000 x (75 – 45) x 12 months
= RM2,520,000.00
Which means, you would need to have RM2,520,000 so that you can retire by 45 years old and enjoy a passive income of RM7,000 per month (assuming that pass away on at age 75)! Earning RM7,000 per month is just consider as a middle class income group!
So my friend, last time, to be a millionaire is a privilege. Now, it is becoming a necessity due to money inflation.
Can swiftlet farming help you retired young???
Common question :
1) I'm interested in swiftlet farming & I have read all the books, blog regarding swiftlet farming. But how do I start...
You need to own a farm to become a swiftlet farmer
2) How to own a farm?
Two choice - buy a shop and convert to a farm or buy a agriculture land & build.
3) Which do you suggest?
If you are rich, no problems, you can either buy shop & build. But if you are like me who receiving monthly salary & want to become a part time farmer, I suggest you go for shop & convert to farm cause it's easier to obtain finance (let banker help you to finance rather to use up you saving). We will discuss this in depth later.
4) Where should I buy shop?
Of course the hot sport area but price wise...$$$$...limited budget? Go for not a very 'hot' area but off course, within the swiftlet flaying path & your budget. One more thing, buy a shop near your house or area which is easy for you to manage as you need to check your farm regularly.
Farmer can be consider a good profession in US & able to earn quit handsome of income. However, it may not be a favorable profession in Malaysia as common perception - low income group & only suitable for senior citizen. If you are in such perception my friend, you are wrong. Swiftlet farmer is suitable for all - young, old, rich, Chinese, Malay, Indian & others.
Advantage:
1.no need to hire employees. So no need to pay salary,overtime, bonus etc. No human resources problems.
2.no need to feed swiftlet.
3.small capital (bank will finance for your shop house. You only need to come out with the down payment plus conversion cost) but generate enormous return (selling bird nest & capital appreciation of bird firm)
4.Passive income. You can continue with your current profession until time for you to retire.
5. Low monthly operating cost (you only need to pay minimum electric & water bills)
6. You can recover your investment in a short period of time.
Dear friend, welcome to swiftlet farming...
