Taras Properties founder Kenzi Chan

Kenzi Chan, founder of Taras Properties and one of Malaysia’s Top 100 Most Influential Young Entrepreneurs,  describes the trajectory of his agency and shares his views on the property market.

After completing his formal education in graphic design in Taiwan and working as a graphic designer at his father’s real estate agency, One World Realty, Kenzi Chan sought to forge his own path and joined DF Realty, where he gained valuable experience in dealing with sub-sales.

Kenzi Chan describes his impression of the real estate industry when he first started out, “During my time with DF Realty, I began to see that the property market was leaning towards new projects – so we wanted to look into aggressively selling new projects despite the high entry fees. Besides, customers also prefer new projects over subsales. Because when it comes to subsales, you need to spend quite a lot of money to get the house and in some cases, to refurbish the unit.”

As with most other practitioners of real estate of the time, Kenzi Chan noticed a marked rise in interest surrounding new projects. Aided by the internet and social media, prospective homeowners were increasingly better informed and had been apparently approaching developers directly in the hopes of securing better deals for themselves.

Kenzi Chan went on to describe what the initial climate was like for real estate agencies working directly with developers, “When it comes to new projects, the main issue we face is getting payments from developers. When working with developers, you would need enough capital to sustain yourself for around three to four months before you can expect a term payment for the commission.”

“For those who just graduated from university, let’s say, I believe that they don’t have this kind of money to sustain themselves. That’s one of the reasons that I founded this company, I gathered some investors to put some funds into our company, and this enabled us to give advance commissions to agents. The idea is to give the agent some support and stability in the industry.”

What is your preference, do you prefer working with properties directly from the developer or doing sub-sales?

“Based on company profit, we earn more from projects. Because nowadays there are plenty of other agencies advertising “best offers”, giving commissions upwards of 80 percent and sometimes up to 95 percent. There is not much profit for sub-sales, since the majority of the commissions go to these competitors.”

“In the outskirts of Kuala Lumpur, the commission scheme is just 40 to 50 percent – but in the city, where competition is high, companies cannot earn a lot from for sub-sales. Because of this, we prefer to deal with developers directly – our company has both subsales and new projects in our portfolio, but we tend to support the developers more.”

What are your company’s plans for 2019?

“We just started last December, but we hope to expand our staff up to 250 or 300 agents in 2019. But sooner than that, sometime this November or December, we will be opening a new branch in Puchong. Currently, we are in Cheras, but we are targeting to open one new branch every year, even in the outskirts such as Ipoh or Penang, and other parts of Malaysia such as Kota Kinabalu – we are thinking of operating as far as there.”

How has the digital revolution affected the industry?

“We’ve got a lot of younger employees now – mostly 20 to 30 year olds – from the younger generation. This being the internet era, we’ve hired some internet gurus – one of them being the well-known Sifu Gary – to help bring our company up to the mark of the modern era. We believe that throughout 2019 and 2020, the trend will continue to be heavily reliant on the internet.”

How do you see the future of the real estate industry?

“I believe everything in the Malaysian property market is going well, especially after this recent change in government. I foresee more support coming from the government in regulation and education to assist purchasers in getting their homes. I believe that after three to four years, the property market will be going back to being sub-sale dominated.”

Would you use the word “bubble” in describing the property market?

“Depends on whether the Malaysian government can adequately control the market. There is a lot of existing subsidised housing right now. This puts a lot of pressure on the developer to sell enough units – and if they don’t, they may not be able to sustain themselves and they could go bankrupt. Also, with some education for buyers in finance management and property selection – I believe there will be many more of these talks and seminars coming up in the future – the market should do well after that.“

How do you feel about haunted houses?

“Fortunately, we don’t have any haunted properties in our portfolio so far – touch wood. But let’s say, if I happen to have a haunted property in my portfolio, I would do some verification first. This also depends on whether the owner wants to sell below or at market price. If the owner wants to sell at market price, it will be difficult and may not be worth trying to promote.”

“If the owner is willing to sell at below market price, and it should be 10 to 20 percent below, I will disclose that information to potential purchasers who are willing to accept this condition – this being the digital era, anyone can perform their own verification to find out if a property has a history. But the property must be at least 10 percent below market value for there to be enough savings for hiring a sifu (geomancer) to perform an exorcism. Some purchasers don’t mind, investors who won’t be staying there, for example, may be more willing to overlook this condition.”