A lunch mate (property group) asked me what’s my focus in 2016. Another Facebook friend, someone who loves to comment on my articles asked me what would I be doing in 2016 if I already have enough ‘ammunition’ today. I think for investment, it’s an ever changing game. Nothing in particular is right for a very long time because it should not be. Principle may be the same; buying undervalued or maximising returns or even long term rental focus etc. However, how we achieve this would keep changing. Reminder, we are investing, not just simply saving money. Without savings though, nothing happens. Here: Idle money, savings in bank, unit trusts and more
In 2016, for property, I hope to buy a secondary property which can be easily rented out. Will hold it for at least till 2018 and will decide then what to do further. Perhaps if the property market is really extremely bad as per what has been predicted by all the property gurus, then I will sell some of my stocks (provided no losses) and buy two secondary properties instead of one. I have no intention to go beyond two properties within a year. These potential properties are not running away, I merely have to buy within my affordability and capability. Preservation of capital gains thus far would be of utmost importance. Criteria for checking out secondary properties? Here: 12 inspection tips on buying secondary properties
Where should we buy, if it is secondary property? If we are buying secondary properties, do buy in secondary areas. Skip all those Kiaras…or Bangsars… Buy as low price per sq ft as possible BUT must inspect the property properly and check its rental potential via online portals. How low is low? Well, I think RM400 per sq ft should be highest under current market condition. It’s cheaper, really. Here: Buy secondary. 30-40% cheaper. For all new launches, I think the prices are closer or higher than RM500 per sq ft. When the whole market moves, that property you bought which is still looking good will also be moving up, slowly. Anyway, a RM350,000 property moving up 2% per year is still RM7,000! Please enlighten me if there are that many jobs which can give me an increment amount of RM7,000 per year. At 5% increment, RM7,000 up per year represents someone with a pay of RM11,666 per month. This covers less than 10% of all working people in Malaysia today.
Am I not buying more stocks? Actually, in 2015, I focussed quite a lot in stocks and bought just one property, in Sandakan Sabah. Thus, I think my quota for stocks would be full currently unless the ones I bought suddenly went up by 50 percent, then I will use the gains to buy into other stocks which is undervalued. My stock selection criteria? Better learn from those specialists instead. Here: Good notes for stock investing from an investment guru When we are buying stocks because we believe it will give us sudden returns, then please do not buy stocks. Any company would need at least one year to show their results, thus share prices should not suddenly jump. That’s purely speculation….
Thus, for 2016, my main focus would shift from stock majority in 2015 to property majority in 2016. Remember, we should always treat U.M.N.O with keen interest. “Uncertainty Means New Opportunities.” My good friend, Dr. Daniele Gambero said this just days ago, in reference to potentially the worst property market ever in 2016. “Worst means also the best in terms of opportunities. Affordable it’s going to be the “forte” in property for the next few years.” Happy investing and Happy New Year 2016.
written on 31 Dec 2015
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