Email Interview With KS Low
By Irene Wong
Freelance Journalist

Meet Australian Property Investment Strategist: KS Low

You are a Singaporean and you are encouraging investors to invest in Australia? Why is that so?

Great question! You can invest in properties anywhere in the world. When I started looking at investing in properties I realized the ‘RISK’ is with the ‘HOLDING COSTS’. It meant getting consistent rental income is very important to any property investor.

In Australia, generally more than 30% of the population (locals as well as expats) rents and the number is increasing with rising building costs and interest rate.

If you are investing for the long-term, the country you invest in must have a huge rental population and a renting culture, i.e. the locals must rent not the expats. Hence the rental demand will always be there, unlike many of the Asian countries where the expats pack up and leave town in times of economic uncertainty.

Australia has one of the most transparent legal systems in the world. It was modeled after British constitution and protects consumers. Besides, Australia favours foreign investment as they have very little housing commission and they rely mainly on private developers to build homes to accommodate the ever-increasing population.

How did you get started in this business?

It is such a joy to be in a business you strongly believe in. I have always been interested in investments, particularly real estate investment. I realized the richest people in the world have real estate in their portfolio. So it is not rocket science to figure out if you want to be wealthy, you just have to emulate the strategies they used. I was very interested to find out their mindset, strategies and what they did to accumulate huge amount of real estate. In 2004, I was researching on the Internet, magazines, etc and an ex-colleague asked me to look into the Australian property market. I never looked back since. I read and interviewed many Australians who accumulated millions of dollar in real estate holdings and it is really possible for ordinary folks to be abnormally wealthy because of certain strategies employed.

I saw in Singapore a number of marketing agents using traditional project marketing methods to sell their projects. Some of them even sold projects that consist of student accommodation, a type of security that is viewed by banks as ‘risky’. Banks normally lend 50% of the purchase price or less on them. None of these marketers knew about building a portfolio. I saw a big need for investors to be educated about property investing. They all think it’s about the property.

What a lot of people did not realize was the property is only a vehicle in the whole equation. The most important thing is to learn how you can hold the property with minimum costs. I grew interested in Australian property because banks are more flexible; offering structured financing products that are unheard of in the local property market. I was an engineer by training and was naturally good with numbers and I enjoyed changing the variables in the entire equation to see if the cashflow can be improved. I started a real estate investment franchise in Nov 2004, an outfit that lasted till 2005, when the franchiser and I went separate ways. After that I partnered with my present business partner who incidentally was the franchisee for the HK setup from 2005-2006. He parted with the original franchiser and we started building our own respective business together. I started PAG in Singapore and he built his PPG International from Melbourne. It was only recently that we came together and I re-brand my setup to be called PPG Asia. It is to reflect the seamless approach in our methodology and for branding purposes. As far as we know, nobody does what we do in the whole real estate industry. Our proprietary PPG Wealth Builder System is one of its kind and it took us some time to fine-tune our approach. Now we have a systematic way of helping investors expand their portfolio, with minimum risks.

How do you differentiate yourselves from the other agents in the market?

We started out as property investors seeking to increase our own portfolio and in the process of doing so, negotiated with developers, builders and made the same opportunities available to investors.

We studied and modeled after strategies that some of the most successful investors have used in the market. Later we developed the PPG Wealth Builder System based on the model of success. Since then we have been using the same system to help investors with long-term acquisition strategies that is suited to each individual’s needs. The Wealth Builder System is a system built for the investor. In fact, we don’t even talk to our clients about what to buy because the Wealth Builder System will tell investors what to buy and when to buy their investment properties! That’s how powerful the system is.

It’s an irony that many people buy properties without knowing their borrowing capacity. It is fine if you are looking at buying just 1 property. However if you are looking to build property portfolio, you cannot afford not to take finance into consideration seriously. That’s the difference between PPG and the rest in the industry. We marry the understanding of finance, tax and property together. At the end of the day, the property is just the vehicle in the entire equation. What drive them are the goals they have set right from the start and a plan to reach their goals.

As you have always heard, “Begin with the end in mind”.

What drives you in your business?

It gives me a lot of pleasure and a sense of satisfaction in helping someone get started in property investing. Especially when I know I am doing the right thing for my clients, getting them to structure finance properly, buy the right property that suits them and have risks mitigation strategies in place for them. When my clients are appreciative, I felt the efforts put in are worth it. Of course the money is good as well and it helps me in driving the business forward.

I believe in the business and have lots of passion talking about property. This is what drives me in the business as well. I have plans in place to start a real estate investing academy for Singaporeans here and it will be exciting. It will be an investor-driven program aim to help everyone equipped with property investing skills. I guess in the Asian environment, not many are taught the mindset and the strategies successful investors used. Hence you will find very few people who succeed in building a portfolio with property.

How do your parents feel about you giving up being an Engineer?

My parents don’t really interfere with my career choice. They are now in their late 60s and they came from poor-middle class families where money values are very important. They are pretty conservative people who saved hard with the money they made from their work.

My mum was a nurse for over 40 years and she retired in 2004 after the SARS epidemic is over. She was one of those fighting with the disease that took quite a number lives away. She has always respected my career choice. My dad tried doing several businesses before settling to do what he does best, being a trademark agent. He is one of the most well known IP professionals in Singapore and everyone in IPOS knows him! Back in the 80s, everyone was to study hard and chasing the paper because that’s what the older people thought would give us a headstart in our careers. However in the modern era, there’s no iron-rice bowl anymore.  Most companies have adopted performance management. If you perform they keep, if you don’t they kick you. It’s the same for government corporations as well! I explained to my parents my desire to build a business of my own and I will not take a single cent from them to start. They supported my decision right from the start, mainly because they understood where I was coming from.

I had a crack at doing engineering work at a local GLC in 2000 when I was still in the university. I was attached to a department I was very familiar with because I was in Armour vocation when I was in the army. I enjoyed my 6-month stint with the company. I made lots of friends there who were all older and more experienced than me but I didn’t enjoy the kind of work I was doing. I was literally facing the computer putting in many hours of work to churn results from the data I have input. I thought the routine was mundane and it didn’t excite me at all!

I guess work is work if what you are doing don’t excite you. I never thought of doing work as work now because everyday I wake up feeling refreshed knowing there are many more opportunities ahead. I cannot say the same if I have chosen to be an engineer!

What is your investment philosophy?

I would broadly classify investment into two categories. Generally people can invest in active trading instruments or acquire more illiquid assets that will generate passive income. The latter requires a lot more outlay than the former.

Most people focus on the ‘taking profit’ in active trading instruments. Few realize the need to ‘acquire assets’ for the long term to generate an alternative income source. In the Asian environment where the population is predominantly Chinese, there’s this ‘speculative’ element amongst investors. Investors are used to ‘trading’. Everything can be traded; from stocks to options even properties are traded freely. The idea of holding an asset for the long term is unthinkable. Very few investors I come across do that.

My investment philosophy is one where I advocate building up capital either from earned income or active trading to acquire assets for the long-term passive income. I set a goal for the amount to be set aside for capital to be built up before acquiring the assets. I also ensure the assets are self-sustaining, i.e. cashflow positive or at worst cashflow neutral. I review my portfolio from time to time to uplift any equity for reinvestment. Always begin with the end in mind. I have devised sensitivity analysis worksheets to ‘price in’ any risks pertaining to the assets that I am currently holding.

What are your personal financial goals?

I have set a personal goal of acquiring 10 investment properties by the age of 40. I have a couple now and I am currently 32 so that means about 1 every year till I am 40. The idea is to capitalize on affordable entry level into the property acquisition as early as possible. Property will definitely appreciate with time as proven time and again. I will then consolidate my debt position by the time I am 55 years old. I am quite sure I would be able to reap a six-figure yearly passive income just from property portfolio, not taking into account my other active trading investments.

What is your best investment to date?

It has to be in property investment. In Dec 2006, I acquired a House & Land package in North Queensland for about $570,000 and upon completion earlier this year (2008) it was revalued at $625,000, an increase of about 9.6% over a 14-month period without me doing anything. All I did was to refinance it into a SGD loan at an interest of 2.5% per annum and it continues to be cashflow positive till today! I plan to hold it indefinitely because it can only go one way- UP! The investment property is situated beside the only 5-star golf course in North Queensland designed by Graham Marsh, a world-class designer of golf courses around the world.

Describe your worst investment experience

It has to be an investment in thoroughbred investment. A few years ago, a corporate finance professional came to me and said he has an investment product that is guaranteed to make passive income for investors monthly and the capital outlay is only $1,000! I put in $5,000 of my own money and lost every single cent. Still I didn’t learn my lesson and put in another $10,000 with another person who professed to be an expert in this area. I got some returns initially but he soon vanished without a trace.

I stick to tried and proven investments now, bricks and mortar and of course trading FOREX and more conventional instruments. Anything that sounds too good to be true most likely is - too good to be true. I stay away from syndicated investments and also investments that rely on a principal operator, that is, the whole investment will go pear-shaped if the management of the operator is not sound.

Before we end this interview, what advice would you give to budding property investors?

If there’s one advice I would give to budding investors, it would be – Work out your own capacity or get professional help in this area if you cannot get it done yourself. Always remember acquiring an investment property involves understanding the 3 Cs – Capacity, Credit and Collateral. Sadly most people focus on the last C- Collateral which means very little in terms of building a property portfolio. Always look within yourself before you look out to find opportunities, otherwise you will be spoilt for choices and you will be confused with so many developments being marketed.

K.S., thank you for granting me this interview!

You're welcome Irene.