Abandoned Property Monies Part 3: How To Know Crap When You See One

My Taiping retirement home!

In the first two installments in the “Abandoned Property Monies” series, I’ve talked about the importance of managing your own psychology, and why properties get abandoned in the first place. In today’s guide, we’ll explore possibly the most important factor when it comes to making money with abandoned properties: knowing what’s the actual value of the abandoned house that you’ve been eyeing.

Trust me: knowing how to tell a dud from a stud will pretty much determine if you’re going to live the life as a high rolling property tycoon or a broke ass property Guru selling seminars to make a living. It’s really a skill worth having… especially when we are talking about abandoned properties. How would you know if that eerie, lalang infested Amityville Horror house lookalike is worth $300,000 its advertised price on Mudah? Don’t worry, my little kittens, for I am about to answer that question for ya…

Some Background Reading Required

Of all things property, Khai Yin had a particularly unhealthy fetish for the topic of valuation, and true enough, he had written more on the subject that I’ve seen anywhere else:-

I don’t always agree with what that kid says, especially the vitriol that he had spewed about crowdfunding for property (which I think is a jolly good idea). But when it comes to the subject of valuing a property, I’d STFU and listen to him because he knows this stuff, even though sometimes I’d rather poke my eyes with a large fork than to hear his girly voice.

So, do yourself a favor, and if you haven’t read the above yet, go read ’em first. And then come back.

Calvin’s DUTA: The Four “Value Drivers”

OK, I will now assume that you’ve got some background knowledge about valuation, or at least know how to avoid the usual layman mistakes when it comes to valuing a property (i.e. by looking at advertised prices at property portals, or asking clueless agents, etc). When I look at a piece of abandoned property, I will typically look at the following four factors (which are known as “Value Drivers” in standard property investment textbook jargon):

  • Desirability
  • Usefulness
  • Transferability
  • Availability

I use the acronym “DUTA” to remember these easily. For you property Guru types who want to rip this off and sell it as your own in your property seminars – well, I’ll let you use it as long as you attribute it back to me (Calvin’s DUTA, just like Schrodinger’s Cat, Schindler’s List, Ben’s Bitches, etc).

Now let’s go through these one by one. Desirability of an abandoned property simply means: will people want this piece of crap once you “de-crapped” it? You can find this out by looking at the area’s property uptake. I like to check the property portals to do a quick search on the area where the abandoned property that I am researching is. In particular, “age of listings” is particularly important here because it tells you how long a particular property has been in the market before it’s being bought.

Usefulness of an abandoned property means if it can be converted into something else apart from its original use. For example, if it’s an originally a residential property, can it be repurposed into a shop? In SS2, Petaling Jaya, for example, many of the terrace houses (especially those facing the main roads) have been converted into wedding boutiques, dental surgeries and mamak shops. The more “use” the abandoned property has once you have fixed it, the more money you can afford to pay for it now.

Transferability is especially important when it comes to abandoned properties because no matter how desirable and useful it is, it doesn’t matter a whit if the property can’t be transferred to you. When you’ve bought the property, is the owner able to transfer its ownership to you “cleanly“? Heck, before anything, are you able to track down the owner in the first place?

Availability has more to do with the area than the abandoned property itself. Is the area littered with abandoned houses? Or is the abandoned house stand on the last piece of available land, surrounded by busy office buildings and upmarket condos? Like everything else from the lost Beatles song to the chalice of Jesus Christ: the more scarce something is, the more valuable it gets.

How To Know Crap When You See One

In the previous post in this homebuyer guide series, you’ve learned how to develop your “sixth sense” about noticing and identifying abandoned properties which you could buy and make money with. In this guide, you know how to look beyond the mere appearance of an abandoned property and know crap when you see one:-

  • Will people want it once you fixed it up? (The Desirability factor)
  • Will it have other use beyond what it originally first for? (The Usefulness factor)
  • Are you able to locate the seller, and if you buy it, will the seller able to transfer ownership to you? (The Transferability factor)
  • Are there other abandoned properties in the vicinity? (The Availability factor)

For me personally, all the above four criteria must be satisfied for me before I move on to the next step: i.e. to determine the fair value of the property which will then give me a bidding range to work with when I hustle the seller to sell me the property. We shall be covering this in the next guide in this series.

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com


  1. triplek says

    KY – How come your guest columnists write exactly the same as you? Are their contributions re-edited by you? Just asking out of curiosity. Credibility etc.

  2. Frederick says

    I remember reading a story of a valuer of different kind. An old lady possessing an old heirloom went to a well known valuer/ auctioning house to sell that heirloom. Being ignorant of the price, she will easily acquiesce to his price. Cutting the story short, fortunately for her, the valuer being an honest person, gave her the right price. That’s the moral of the story. Coming to abandoned story….sure, knowledge is power, one can abuse it.

Speak Your Mind