From our 3rd property onwards, the banks would also loan us 70 percent, at maximum. Imagine buying a RM600,000 condo and needing to pay around RM200,000 in total including the stamp duty and legal fees. An investing friend recently reminded me that when we really think about maximising our property investments, we should even rent the home we stay today instead of a 30% downpayment which ties up a lot of our capital. He said, there’s no need to rush to own a home because whatever we paid into this home technically is ‘wasted.’ Okay, his view is supported by facts and figures but I would still prefer to own the place where I stay even if I would not be rushing to pay it off as soon as I could.
I love the place I stay today. I loved the place I stayed when I was still based in Penang. Both have lots of open and green spaces for my family and I. I could swim in the landscaped pools or just brisk walking in the morning. In short, I do not believe that we should stay in a less comfortable place for a cheaper price and thus have more capital resources for investments instead. However, the thoughts about renting instead of tying up our capital can be considered. It never crossed my mind many years ago but I think these days, investments are becoming ever more important, else we have to be contented to remain within the average middle class. With investments, we may not be rich like the successful entrepreneurs but we can aim at the upper end of the middle class who definitely enjoy a better quality of life here in Malaysia.
Maybe if I move again, I will consider this seriously. The first home I stayed in was RM123,000 and it moved upwards until the current one bought nearly two years ago for RM540,000. The next home would most probably be even higher priced and 30 percent is really a lot of money to be ‘stepped on or stayed in’ no matter how we love that new place. Oh yeah, the rental market is also on our side too, at least for 1-2 years at least because there are many new units entering the market too, Klang Valley wise. Happy thinking and deciding.
written on 6 Feb 2016
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