By JOYCE HOOI
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AS FINANCIAL wizards watch their wealth dwindle and dreams of en-bloc windfalls crumble, a group of people have been steadily building up profits, not in bricks and mortar, but iron and steel.
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| MAN AND MACHINE Mr Chia sold his Kawasaki Ninja to his friend for $4,000 last October, who managed to sell it for a 10 per cent profit three months later |
A growing number of motorcyclists in Singapore are not only enjoying their hobby but discovering that it can pay handsomely too.
Derek Han, 37, makes anything from a few hundred to a few thousand dollars each time he sells a used motorcycle that he has painstakingly restored.
The IT professional, who has been restoring motorcycles since 2003, fondly remembers buying a Moto Guzzi California motorcycle with a friend in 2004 for $5,000 and selling it less than a year later for slightly over $11,000. 'When we got the Moto Guzzi, she was in bad shape from years of neglect. Thankfully, her mechanics were sound and a full service and fluid changes brought her back to good running condition.'
'We didn't manage to do much restoration as someone approached us to buy her before that,' he said. Even after spending $1,500 on getting the motorcycle back to road-ready condition, the Moto Guzzi had fetched a tidy profit of $4,500, a 90 per cent return on investment.
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Singapore, it seems, has no shortage of people with a seemingly irrational love for a certain motorbike model and who are willing to part with a good sum of money for one.
Mr Han recently turned away a stranger who showed up on his doorstep with a cheque for $24,000 for a BMW K75S that he had acquired for $5,500 - even though he was not done with restoring it. 'I like it too much to sell it,' he said of the motorbike, of which he has posted photographs on his Facebook page.
Even motorcyclists who only ride and do not restore have seen their motorcycles appreciate in value, enabling them to flip the vehicles for a respectable premium.
Deyna Chia, a business developer in his mid-thirties, sold his 15-year-old Yamaha V-Max five months after he bought it in January last year for $5,000 - at a $1,000 premium.
According to Mr Chia, the upside value of a motorbike investment stems from many strategic factors. 'The old V-Max that I sold has actually appreciated even more now, because the new V-Max launched in late 2008 was more expensive than people had expected, at $42,000,' he said.
In fact, the V-Max that Yamaha launched last year is currently going for $10,000 higher at $52,000 due to the appreciation of the Japanese yen, said Mr Chia. 'There has also been an element of profiteering by dealers who have been able to use the strengthening yen as an excuse to jack up prices,' he added.
Not only does the element of timing apply to bikers when they take corners, it also comes into play for motorcycle purchases when demand spikes for certain motorbikes.
'Some people just get bikes for upcoming events - like touring bikes for Phuket Bike week - and then sell them when the festival is over,' said Mr Chia.
Apart from knowing when to look, it pays to know where to look.
Dealers looking to liquidate old stock or showroom models are a good source of underpriced motorcycles if you know the right people. 'Dealers are usually very hush-hush about selling at a discount. It's usually done through word-of-mouth,' said Tim McIntyre, an enthusiast who currently owns five motorcycles. Mr McIntyre, who bought an eight-year-old Kawasaki ZZ-R 1100 for $2,000 and saw its fair value rocket to $5,000 in three months, reckons that rarity is key to appreciation in value.
'The rarer and more desirable a bike, the easier it will be for you to command the price you want,' he said.
The bulk of such rare and valuable motorcycles are the ones on the high end of the engine-capacity spectrum.
According to the Land Transport Authority, motorcycles with an engine capacity of 501cc and above stood at about 11,496 units as of last year. While that figure has been steadily increasing over the years and is at an all-time high, it still represents only 7.9 per cent of Singapore's total scooter and motorcycle population.
In addition to knowing your motorcycles, it pays to know your bikers as well. 'The best deals are through friends, where you can get rock-bottom, fire-sale pricing,' said Mr Chia.
His biking buddy, Darren Peh, 36, can bear testimony to this. Mr Peh had bought a Kawasaki Ninja ZX-9R from Mr Chia at just $4,000 in October last year, and managed to flip it for $400 in profit three months later.
'That's a 10 per cent return in three months. Better odds than the stock market,' said Mr Chia.
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