Majority of everyone would like to own a property. The feeling of ‘I own my own home’ is definitely better than I am paying so that others can buy another home. Assuming we are really serious in buying one, what can we do in order to ensure one of these days, we really could do it? Let’s assume the market would continue to be slow, negative and perhaps even on a downtrend for some time more. As per many predictions which we can read online, it does seem that 2018 may be a more probable year for the transactions to rebound and of course followed by increase in prices. There are three steps that I propose.
Identify. Do we know why are we buying? WHY is important because if we are buying for own stay, then it may be a bit more flexible, buy further for cheaper or buy nearer but smaller so that the price that we pay is almost the same. However, if we are buying to rent out some of the rooms, then it should be near enough to office towers or other commercial properties. This is the WHY that we must answer before we can then start identifying where and what. Remember, WHY is first, way before the where and what.
Price Set. Set a price. How do we set a price? Use the rental as benchmark. Anything positive should be good enough as property prices has indeed jumped a lot and rental has yet to catch up. Of course the higher the better in terms of returns. Setting a price means we want to wait / negotiate for the price we want before we buy. There is little need to keep moving your targeted price unless the price set is too high. Do note that just like stocks, no one would know when is the lowest price…..
BUY. If the place we want to buy and the price we set arrived, buy lah. Don’t just talk for fun. Else, we have just wasted a potential return a few years down the road and perhaps this may be the property that would at least give us something because relying on just EPF savings when we retire is going to be hardly enough. By then, sell this place we bought, then we rent a room and we can start travelling a bit. Life is meant to be enjoyed as long as we have something valuable we can sell when we needed to.
Simple, right? Identify, Price Set and Buy. I would like to dedicate this to all the most awesome young people in Malaysia today. Oh yeah, any new handphone costing RM3,600 and to be used for one year would set us back RM300 per month. In property price terms, RM300 extra in mortgage payment per month would have enabled us to buy a property which is RM80,000 higher. (35 year term). Quite a lot of difference. It may mean a condo versus an apartment. Or an apartment versus a flat. Think about it and act. It’s your life that we are talking about. Cheers.
written on 14 Oct 2016
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