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Simply buying? Or only think of popular areas?

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I know the mantra of location, location and location. I think this was a term coined quite some time back, at least over 15 years ago because when I bought my first property investment book, this was already a term used by many. Of course, these days, another term is becoming more famous; TOD (Transit Oriented Development). I have personally called it the ‘Accessibility Popularity‘ Anyway, the term used is secondary. The knowledge is primary. Understanding that new public transport stops would start to enhance many new and less popular areas. Understand also that many are still thinking ot he more traditional areas and only fewer more adventurous ones are starting to accept less popular areas. Finally, understand also that when there are lesser demand, the prices tend to be lower too.

Sometimes, it is because the area is really bad (for whatever reasons we dislike or hate) but sometimes it is because the area has not yet been discovered by everyone. Shouldn’t we be the ones discovering them before majority? Buy what others did not think, see, view, yet  For those who have read kopiandproperty.com for sometime, I coined the term ‘Location Supply Scarcity.’  This basically tells us that when a location is favoured by many, the prices would go up simply because the supply within that location cannot suddenly increase or has already peaked but demand will keep coming due to popularity of the particular area. This will happen even if within just 10 minutes away there are by far lower priced homes. Haha. Do note that there is nothing wrong to love a popular area, I think it should always be safe. However, just don’t think too much about prices doubling because the prices of today are indeed very high. In the stock market, it’s called fully-valued or even over-valued. More often than not, these fully-valued or over-valued stocks are also the known blue-chips. So, buying blue-chip stocks can hardly be a wrong decision.

The great thing about property investment today is that there are so many resources available. From thousands of property listings to reviews and even rumours. Let’s not forget the weekly free property seminars / workshops and fairs where we can compare properties side by side. Property news are a prominent feature of many property sites and even the usual media outlets. Even our lunch mates can be a great resource as they may be sharing with us the area they are staying, the good the bad and the ugly. What should we be doing? Do not buy without knowing and understanding. Buying the wrong property regardless of good or bad times would still ‘cripple’ our ability to invest for many years. My proposal? Buy to stay first, invest later. Buy those we like not those we believe others may like. Happy investing.

written on 18 Dec 2016

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