Charles Tan dissects the public’s obsession with property investment – Are you a genuine purchaser or a trend follower?
1. Do you like the idea of purchasing property as an investment? (A)Yes (B)No (C)Maybe
2. Do you believe that property prices will be going up over time? (A)Yes (B)No (C)Maybe
3. Are you an aspiring first-time homebuyer or waiting to buy another property? (A)Yes (B)No (C)Maybe
Most property investment surveys start this way and almost all respondents will pick (A) as an answer. You have to admit, Malaysians are pretty kiasu and will pick yes even though it is at most a ‘maybe’. Read – fear of missing out. #FOMO
Hence, these surveys usually produce the following results: Many people are looking to buy a property.
Yet, the public’s sentiment is muted and transactions are slow even though developers are currently pushing more affordable products. This could be partly because many ‘wannabe’ purchasers or investors usually have their dreams cut short by reality. They fail to carry out a temperature-check beforehand by asking themselves:
1. Am I ready to purchase a property now?
2. Do I have the financial capability to buy a property?
3. Do I have the time to research and carry out the necessary due diligence required for property purchasing/investment?
Only then can one ascertain whether he/she is genuinely interested to purchase a property should the opportunity arises and not because everyone else in their immediate social circle is talking about real estate.
If you are considering investing in property or purchasing a home, it is important to do things right.
Determine your target area
Most aspiring purchasers have a macro-view on their target area and will just drop popular names off the bat. Prime examples are Klang Valley (KV), Penang and Iskandar Malaysia or Johor Bahru. KV or Greater KL is huge, with various residential neighbourhoods nestled within. Similarly, Penang consist of the mainland and island. Some will just focus on the mainland, aren’t prices crazy high on the island? Well, it is up to you to research and unearth good deals.
Whether it’s Iskandar Puteri, Kota Kinabalu or even Malacca and Ipoh, determine where you intend to buy into first. Only then can you carry out the necessary research and look for more information on the area’s livability or tenant demand.
No money, no honey (property)
Many believe financing is the first step in property purchasing instead of deciding where your target location. Admittedly, it is a chicken and egg situation. Nevertheless, if you do not even know which area it is to purchase a property in, how would you then put a savings plan in place to ensure you achieve your downpayment goal.
Also, make sure to research for at least 3 potential areas (projects) as a backup. You can always settle for our second or third property choices should you realise that the first one is unattainable. One should always aim to save up for as much as 15% of the property’s downpayment. This is because there are other costs involved throughout your purchasing journey – think renovation and furnishing costs. At the risk of sounding like a broken record, a solid nest egg is key to owning a property and the right property(ies) will drive and sustain wealth creation.
Know your unit
For aspiring home buyers, if you hate the area, then don’t bother viewing a ‘potential’ unit, as you have already made up your mind about the property. However, do not put off viewing potential units as you would want to fully understand everything there is to know about a property before shortlisting it as one of your top 3 choices.
Remember that a higher-priced unit within a project may not necessarily be a better fit for you and your family. Ask your partner and kids, if you have any, to tag along as it is imperative that they get a feel of your target property too.
After all, they will be living in it as well.
So if are you game in carrying out these three steps, then you are one big step closer towards achieving your property ownership dream. To the other half, well you can continue renting because there’s nothing wrong with that too!
This article was repurposed from a blog post written by Charles Tan and first published on kopiandproperty.com.