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RM300,000 property versus just increment

Posted in Personal Finance, and Starting Property Investing

At the recent South East Asia Property Awards (Malaysia), I was seated at the media table with a few big names in the media arena. As usual, property is what they love to talk about. One editor from a well-known business magazine told me that she is looking to buy a property next year. She said she is saving money currently. I told her that as soon as she is financially ready, she should take the plunge. In fact first property is just a roof over ones head. Property investment actually start from the second property onwards. She laughed and said she will do her best.

Another young lady from a big media organisation said that she was still saving for her first RM300,000 home. I told her to work hard because there are not enough editors in the property field today. The awesome ones are too expensive and the average ones may not know enough about property investment. She laughed and agreed. I also shared with her a simple reason why a property investment is much more lucrative than the usual yearly increments. Following was the calculation that I shared.

Salary: RM10,000 per month an increment of 3% per year is an additional RM600 per month. Unfortunately, NOT many are currently earning RM10,000 per month.

Once she could afford a RM300,000 property and this property increases in value by only 3% per year, this is already RM9,000 per year or RM750 per month. This is still higher than even someone earning RM10,000 salary and an increment of 6% per year.

This showed that even when both are increasing on a yearly basis, property is definitely faster. That’s why they call property investment a hedge against the inflation. She said the simple calculation motivated her and she would definitely read and learn more. Property investment is definitely must for all young people. I agree. Happy reading.

written on 12 Aug 2016

Next suggested article:  Fear of price increase, thus buy quickly?

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