Property Hunter Magazine August Issue 2014 | Page 60

/// Banking and Investment News

Top Tips When Buying Your First Property
your unit. So you don’t have to make
any progressive payments during
the construction period (Progressive
payments are payments made to
finance a housing loan during the
course of construction. Typically, you
only pay the interest element of your
loan during the construction period).
The public should be aware that
although this scheme seems to be
very attractive, never forget that
the developer would have factored
in their finance cost during the
construction period into the pricing
of the property. Other advantages
of buying off-plan is that developers
will usually give a lot of ‘freebies’ such
as free legal costs for your Sale &
Purchase Agreement and sometimes
even for your Loan Agreements
too. This will help reduce your initial
capital outlay.
Buying your first property? Read this
guide to make sure you don’t end up
paying more than you need to and
Save Money!
Buying your first property - be it for
your own stay or for investment - can
be very intimidating yet exciting at
the same time. This is not unusual
for most of us as buying a house
will probably be one of the single
largest purchases we would make
in your lifetime, and along with the
mortgage required for it, getting the
whole process right will be one of the
biggest ways to Save Money.
In this guide, we will look at ways
to Save Money on securing the
property itself. For this we want to
share with you the top 5 tips that you
ABSOLUTELY need to be aware of
when buying your first property!
TIP1: DEFINING OBJECTIVES
One must be crystal clear about
your objectives when buying your
property. The two main objectives
are:
(a) For Own Stay
When it comes to buying your first
home, it’s very easy to get carried
away with finding the perfect home.
Sorry to burst your bubble, but
perfection does not exist. So be
prepared to compromise. You need
to be realistic with what you can
afford given your budget. So make
sure you have a BUDGET and STICK
TO IT.

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(b) For Investment
If you are buying for investment,
you then need to be clear if you are
investing for Capital Appreciation
(rising price of property) or for
Rental Returns. As a general rule
of thumb, if you are still young with
high future earnings potential, you
should focus on properties which
are likely to provide the highest
Capital Appreciation. But if you
are approaching retirement, you
should be looking at properties
which will preserve its value yet give
good Rental Returns to fund your
retirement.
If you are buying for Capital
Appreciation, one would usually go
for off-plan properties (Properties
which are sold before they are
complete). However, things have
changed in the past few years
especially in the Klang Valley where
there is currently an oversupply
situation therefore making it very
tricky to ‘flip’ properties (Flipping is
a common term used to describe
buying a property ۈH