In every property fair, I noticed a lot of people love to listen to property gurus talking about hotspots. As long as you continue to benefit from their talks, please continue to listen and take action. I am just a small time investor like majority of you. Thus let me explain my point of view which I think may also be a point for you unless of course you have huge amounts of money to invest and can buy in every area that the property gurus are saying. Allow me to explain a bit about hotspot, when you actually decide to buy and why you decided to buy.
Hotspots means that particular area is favoured by many. For an area to be favoured by many, it should have all the right ingredients. Well planned development, lots of nice properties versus squatters, a friendly mall nearby, schools and perhaps offices nearby for the working people and also the promotion by a lot of people that the area is a hotspot. Last but not least, connected by highways, LRTs, MRTs, KTMs etc. In essence, the news about it is also everywhere. You read about it online, you read about it in traditional media, all your friends are talking about it and every agent tells you to buy there because it is a hotspot. Correct? Yeap, that’s when that place becomes a hotspot and the prices? Raging Hot too.
However, have you ever thought about it objectively? Do you buy a hotspot for RM1,000,000 simply because everyone you know says it is a hotspot? Or do you buy it because you can see the MRT line being built which passed through that development. You also buy because the block next to it is already similarly priced today and you are buying it at a slightly lower price and after completion in 3 years, you think it will increase in price. Or you also buy because you simply needed to upgrade anyway and that particular place ticks all your requirements; mall for your wife, school for your kid and your office being just less than 20 minutes away? Suddenly, it is clear right? You bought the place because of YOU. Not because of any awesome presenters in a property show! One more question, if the hotspot is already extremely high in terms of price psf but a famous property guru shouted, ‘buy, buy, buy’, do you buy?
Hope everyone understands, property investment is not about which hotspots being bandied about by property gurus. Property investment is where you read, learn and do your own analysis based on all the actual facts on the ground. It is also where you buy because you have read about the particular area for many months or even years of its continuous development as well as future infrastructure being built there. YOU can SPOT the HOT area easily. I do love reading about where some of the hotspots are though. The predictions can help to pinpoint a few areas for me to do more research before deciding.
written on 16 March 2014
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