Knowing how to spot a good property development may save you from making a bad investment decision and protect you from the unnecessary heartache in the future.
Done right, property purchasing can be one of the most rewarding investment decisions you’ve ever made in your life, which also makes it one of the hardest to make.
One wrong call and you’ll end up having a large portion of your life savings tied in an abandoned project or a property that you can neither sell nor lease out. Therefore, it is crucial to do a thorough check on a development that may seem like heaven-sent on paper at first glance. If it seems too good to be true, then it probably is.
There are many ways to identify a good property development. We speak to the judges of iProperty Development Excellence Awards (iDEA) 2018 to learn how to identify a good property development from a bad one.
1. Does the developer have a good track record?
This a step you absolutely can’t afford to skip, especially when buying an under-construction development or a massive integrated development project that’s being completed phase by phase. When you buy a property that falls under either one of these categories you face the risk of the developer abandoning the project due to fund insufficiency.
Dato’ Sr. Lau Wai Seang, President, Royal Institute of Surveyors Malaysia (RISM) says that the it is paramount to be aware of the credibility of the developer. “You need to know whether the developer is able to develop the project and deliver it to the consumers either on time or at all.”
The Ministry of Housing and Local Government has recently released an updated list of blacklisted Malaysian developers to help consumers avoid getting tricked into making a bad investment. You can look up their names in these lists which include the names of unlicensed developers, developers who defied the Tribunal for Homebuyer Claims (TTPR), developers who failed to pay their compounds and developers involved in abandoned housing projects.
2. Is sustainability an important feature of the development?
“A good development can be identified by its contribution to the environment, and whether it takes sustainability into inconsideration of its design,” shares Ar. Ezumi Harzani, President, Malaysian Institute of Architects (PAM).
Assoc Prof Lar Osman Mohd Tahir, President of Institute of Landscape Architects Malaysia (ILAM) and Ar.Sarly Adre Sarkum, Deputy President of Malaysian Institute of Architects (PAM) both agree that the building’s sustainability should be a good indicator in identifying a good property development.
“When a development is designed for sustainability, it will automatically translate into better returns in terms appreciation and profitability for the purchasers in the future. Good design is the core of everything,” says Sarly.
Osman adds, “The development has to be smart as well as time resilient. It should at the same time fulfil the requirements and needs of the public (such as public transportation), as well as improve the quality of living and environment.”
3. Was the developer efficient in managing previous crisis?
Ho Chin Soon, Chairman of Ho Chin Soon Research stresses that knowing the public’s perception of a developer is very important. Therefore, although a developer may a have clean track record in terms of delivery and completion, pay attention to what the public has to say about their previous projects and if there are any previous complaints lodged against the property developer.
It is impossible for a developer to be perfect and flawless at what they do, they are only human after all. However, the hallmark of a good developer can be seen by its efficiency in handling complaints and grievances in times of crisis.
4. Is there potential in the location of the project?
Say what you will but the old trope of “location, location, location” is still an accurate measure of a property’s potential. No matter how good the quality of the development and no matter how grand the facilities, a good property development will not thrive in a location that has very little developing potential. Location is integral when it comes to acquiring a good investment property.
“The ultimate thing is to look at the location because that’s where the return is,” says Dato’ Sr. Lau Wai Seang, President of Royal Institute of Surveyors Malaysia (RISM).
5. Has it received any industry awards or recognition?
Awards are created to give recognition to those who excel in their field. So, it makes a pretty accurate measure of a good development and it can help distinguish a trusted, reputable developer from an unreliable one.
Check if the developer’s previous projects have received industry awards such as the Green Building Index (GBI) award, Fiabci Malaysia Property Award, QLASSIC Excellence Award, BCI Asia Awards, iProperty Development Excellence Awards (iDEA)and so on.
Dato’ Seri Matthew Yeoh, Co-Founder of ASEAN Legal Alliance and Ir. Ahmad Izdihar, President of Malaysia Green Building Confederation both agree that it is very important to buy into a project that has brand recognition, which is why industry awards such as these would help property buyers in making the right investment decision.