Property agent aims for passive income

Me & My Money Series (Sunday Times)

Only thing I have with all the property advocates is how they need to either admit or realise that the main attractiveness of this asset class is the leverage and not the 'tangible aspect' of it. I'm wondering how many property investors don't realise it's the leverage that's 'attractive'.

Property agent aims for passive income

18 August 2013
Straits Times

Mr Shon Foong's ambition to become a property agent and coach started when he helped out as a shampoo boy in his mother's five-seater hair salon in the 1990s.

Regular customers would invite his family to their homes in the festive season.

"One of them changed houses pretty often, and it got bigger and bigger each time!" said the 32-year-old. "I then came to know that he was a real estate agent."

And that struck a chord with Mr Foong, who was then in Secondary Five.

He wanted to take up a business course in a polytechnic, but his grades did not qualify him to do so.

So he joined the workforce in 2006 after his National Service, with a diploma in Quality Engineering Management.

"I had no experience or mentor, so I browsed through advertisements in the newspapers and attended workshops and courses which would help me to become a property agent," he said. But closing his first deal proved tough.

"From 7am to 9am, I'd hand out fliers at a market, and from 7pm to 10pm, I'd go door-to-door in landed estates and public flats to give out my namecards and ask if they were keen to sell or rent out their home."

After four months, his perseverance paid off when he closed his first deal and earned a $5,000 commission. "I couldn't believe it! That was more than 10 times what I had earned a month in the army."

Today, he is a senior division director with property agency ERA and, together with a partner, he runs a real estate training school for agents in Singapore and Malaysia.

Mr Foong said his humble background made him more aware of the less well-off.

"My parents rented a room in a three-room HDB flat with two strangers for over a decade," he said. Their savings paid for his education and that of his elder brother. Later, it was used to set up his mother's small hair salon.

"We were always appreciative of the volunteers who would send us food and groceries at the end of each month," he said.

He said, in return, he has been trying to help others since his army days. "My friend said, 'You may have no money, but donating blood is free!' So that's my first work of charity."

He distributes food and groceries to patients stricken with cancer. He and his wife Shenice, 32, have a 17-month-old son.

Q: Are you a spender or a saver?

I've always unconsciously had a saving habit. My mum always says that money is hard to earn, so don't spend it unnecessarily.

About 20 per cent of my income is set aside for fixed deposits and an emergency fund, and another 10 per cent for future investment plans.

Q: How much do you charge to your credit cards every month?

I've several credit cards. I charge a four-figure sum to my Citibank dividend card monthly to accumulate cash rebates and discounts on dining and petrol. The other cards are used for leisure activities or when there are card-specific dining promotions.

Q: What financial planning have you done for yourself?

My family and I believe in growing our "golden nest egg" and being well insured.

My wife and I have seven insurance policies including life, endowment and health. These act as safety nets for my parents and family in the event that something untoward happens to me.

I intend to buy local and overseas property. The several rounds of cooling measures are meant to deter speculative investors. But if you are in it for the long haul, it is still lucrative to purchase private homes.

Q: Moneywise, what were your growing up years like?

We were put under the care of a Malay nanny as both my parents held jobs.

I never had pocket money in primary and secondary school and would take food from home. In 1997, I took up part-time jobs as a pest control cleaner at coffee shops where I could earn over $11 an hour.

Q: How did you get interested in investing?

One of my mum's regular customers, a real estate agent, would change homes every one to two years and move into bigger units each time. His story made me feel that investing in real estate can grow one's wealth faster.

Q: What property do you own?

I bought a three-bedder unit at condominium Park Green last year for about $1 million, and rented it out till recently.

I'm also a co-owner of a four-room flat at Marine Terrace which I purchased in late 2006 with my mother for about $280,000.

Recently, when the Sing dollar strengthened against the Malaysian ringgit, I bought two residential condo units in Kuala Lumpur for about RM1.3 million in total to take advantage of the exchange rate.

Q: What is the most extravagant thing you have bought?

I bought a Buddhist crystal which cost $8,500 at an auction for my wife because it was something she was looking for.

Q: What's your retirement plan?

I'd like to continue building my property portfolio so that the rental income can eventually serve as passive income when the mortgages are paid up.

I also hope to grow and better establish my training school.

Q: Home is now...

A three-bedroom apartment at Park Green condo. It's five minutes away from my parents-in-law's home so it's convenient for them to drop by.

Q: I drive...

A white Lexus GS300 which is spacious and serves my family well.

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