Issue # 3
34
PROPERTY360DIGEST
PROPERTY360DIGEST
Issue # 3
35
think for ourselves. It doesn’t mean that
just because Aunty Lim said to buy here,
you should. Or because everyone is buying
at a particular development, you should
too. Remember, it could be inflated with
bad initial research.
Talk to current property investment
tycoons. They may not share all their
secrets, but many of them like to help.
Always look for the Big Ms (McDonalds)
or the Green Coffee Man (Coffee Bean) or
even the 99 sundry guys (99 Mart)…please
don’t think that they set up shop to flip
burgers or to serve you coffee. They are
investing in an area; hence they always do
proper research before embarking. Ride on
their research.
Look only at upcoming areas (sure
growth areas) — The Southern Growth
Corridor.
Question: What next? Once you have
identified the area through all the
research and tips you gave earlier, what
do you do next?
Keep an eye out — but your ears wide
open. Don’t just see what is available, listen
to what’s being offered.
Study the units that are being sold, look
for the lowest in price first.
Visit the lowest in price first, so that you
are acceptable to certain lacking.
Buying at RM100K below market and
spending RM50K to renovate would put
you automatically in a RM50K profitable
position — a great way to assure profits
when you sell.
Always understand the property before
purchase — if it is way below market, find
out exactly what is wrong. Some things can
be fixed easily, but some could be a horror
story…to your pocket.
Remember, strategic purchasing could
work in your favour…if done right.
Here’s a scenario:
Leave the empty nest and get something that is easier to manage at this stage.
any longer. Keeping it clean is troublesome
and tiresome. So, you move back to a
smaller apartment/condominium just for
the 2 of you.
Question: Now, getting back to the
initial topic, how does buying for
investment differ from buying for own
stay?
When it comes to investment, unlike
buying for own stay, there are many areas
to look into.
•Research — location / potential area
growth / potential property growth /
potential rental
•Game plan — strategize when to buy /
who to buy from / how many units can you
obtain / which units would be best
•Finances — Understand your affordability
/ don’t bite too much that you can’t chew /
legalities and fees
•Exit strategy — When to exit / How to exit
/ What do you do upon exiting
Question: Why would someone invest
in property as opposed to the various
other forms of investing?
Do bear in mind that Real estate
investments are one of the most secure
types of investing nowadays. We all
know that stocks and bonds can be
badly affected by recessions, as we had
experienced during 2008. Real estate on
the other hand, can increase in value as
time passes even as an effect of economic
fluctuation.
Good real estate investments give you
better leverage hence makes it a desirable
collateral for loans. The earning capacity
for these types of properties makes it an
attractive mortgage subject for banks and
other financial institutions.
Good real estate investment appreciates
over time or increases its net worth
through the years.
Real estate is an investment where you
can have a “say” on what happens to it. You
can decide what to do with the investment
and not just let others think for you as what
happens with investments on stocks where
a board of directors generally does the
overall decisions for your investments.
Question: What is to invest smartly?
Don’t be a cow — human beings do not
need to have the herd mentality — we can
Prices around the City Centre are
extremely high. You may be able to
purchase a decent 1,000sq ft unit for
RM2million, this is a repayment of
approximately RM10K monthly on a
maximum 30-year loan, after placing a
20 percent down payment of RM400,000.
UNACHIEVABLE FOR MANY OF US.
However, you need to live closer to work –
and you work in the City Centre. So what do
you do?
Buy a house in areas such as Nilai /
Pajam / Bangi / Semenyih / Seremban for
RM400,000 (its between 40 mins to 1 half
hours from KLCC). DON’T LIVE THERE. Your
repayment back to the bank should be
around RM1,600 per month. Rent the unit
out for RM1,200. Rent a home for yourself
to stay, slightly away from KLCC for around
RM1,500. In totality, after receiving your
rental from your tenant, you will need to
fork out RM1,900 per month for the best of
both worlds. You live close to work, and you
have a house under your name. When the
property price starts to boom in the area
you purchased, sell and buy closer to KLCC.
Now that is smart investment.
Follow the big boys, they have done extensive research on the growth of areas. Why not
piggy back on their findings?
hoose strategic locations that have room for capital growth. This way, you can be rest
assured an increase in price over the years.)(picture sourced from klia2.info