Property investment – back to basics

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Passive income. If you buy a good property for RM250K to RM300K today, typically you can rent out for RM1,100-RM1,300. Depending on how old you are, this is sufficient to cover your mortgage and gives you a yield which is equivalent to FD, at worst. If I can, I would like to continue buying to rent. The reason being after a while, this becomes a passive income for you. The capital investment that you do would most probably be once, apart from the maintenance but the rental will only increase over time and the property will only increase in price over time. If you are able to rent out for a few years, you would notice that the rental yield becomes not just better but GOOD.

Family planning. Don’t tell me you want to buy a property for your kid in the future. Do it now. Chances are when they are old enough, you can either sell the house for their education or even give them the house as a gift. Even if a property is worth just RM300,000 today and rising with just the same rate as inflation, it will more than doubled when you sell it later. If you are staying in a landed property today, when you are older and your kids are no longer staying with you, it may be wiser to move to condo for easier maintenance, security and convenience. By then, your current landed property would be worth so much that after you sell and bought a condo, you would have enough for your retirement. Just do not gamble it away!

Great investment. Honestly, if I was richer or borrowed from my parents and bought double of the properties I bought and sold off everything today, I could now be sipping coffee and reading a book beside my swimming pool. Yes, it is true. However, it is ok, I may still retire earlier by 5-10 years perhaps than the official age of 56. You can save a lot of your income by not going to Starbucks so often, buying a Saga instead of Vios but if you take the ‘save your way to riches’ route, it will take you a very long time. Surely you will get there but it will be slow. You can also borrow huge amounts of money and drive up to Genting and perhaps you may win big or lose it all. With property investments though, the route is faster, more fun and ‘surer’ than many other investments because property is after all, a human need. That’s why they call it ‘home sweet home’, ‘home is where the heart is’ and when you feel tired after a full day of working you call your wife and said, ‘I wanna go home’.

There, back to three basic reasons why I love properties and perhaps the reasons for you to start loving properties too. Just be reminded, there is no super fast route in property investment. On and off, you may hit a jackpot but that is just pure luck. The fortunate thing is, ‘luck comes to those who work hard’. 🙂

written on 31 dec 2013

Next suggested article: Buying property – too far, too expensive, too soon

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