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10 reasons why we will fail to buy a property.

Not everyone loves to buy a property. Some (usually the younger ones) say vacations are better than a property. The former gives FEELING of happiness. The latter merely adds debt and worry of not being able to pay on time. Plus the fact that they can show off to their peers when they post those photos in Facebook.Here are 10 reasons why we may fail to buy that first property in the near future. They are in no particular order and some people may have more reasons than others.

1) Paying too high rental today versus your salary. Two issues here. One, rental of RM2,000 per month means you are usually staying in a property valued at RM500-600k. (Yes, rental market is not awesome for some owners right now). Two, you will not want to downgrade by buying a property of your own and paying more. RM600,000 property requires a monthly mortgage of RM2,700. We have yet to calculate the renovation and the furnishings…

2) No money left every month. Choices, Choices and plenty of Choices today (earlier article here). Wants versus needs is usually blurry until you really write it down and categorise them accordingly yeah. RM300 saved is enough to pay for a property which is nearly RM70,000 higher. Crazy but true…

3) Most of my friends don’t have a property anyway. (They have the latest iPhone though or that Yellow thing…). Peer pressure is working negatively here. Courtesy reminder yeah, usually only the minority will be better off than the majority. That’s why there’s just one manager and hundreds of junior executives…

4) Buying that property can wait. I am still young. Frankly, this is quite true. Prices will always have to be affordable regardless of when we buy, whether it’s today, tomorrow or 10 years later. The reason for affordability? They will use distance (build it further away) or size (build it smaller). So, think if we own a BIGGER property and NEARER versus in the future when it’s further and smaller, which will be more valuable?

5) Staying with my parents lah.  They love me and I don’t want to move out. Haha. It’s the best opportunity to buy a property, rent it out and still stay with your parents. Many people do not have this option…Alway be grateful with what we have and make it work. (Earlier article here) 

6) I need a BETTER car lah. Better is very subjective. For a junior executive, a Vios enables him to be ‘looked very high’ versus all his peers but actually there will be time when a Vios could be bought with just the credit card alone… (High credit limit). However, buying that Vios versus that reliable Axia for example will really take away too much of our salary every month.

7) Nothing fits me in the market.  This is a super-duper awesome reason.  The ones we want are too expensive. The ones we don’t want are within what we could afford. By the way, that first property will usually not be the property we stay until they say we say bye-bye. Buy one, start paying and a few years down the road, upgrade to a better unit and sell the current one or rent it out. Few years later, the rental yield is usually already positive.

8) I hate property lah. Ok, this one particular reason is a very good one. Just remember that a property can be a key to everything you like. Selling a RM400,000 property which has appreciated to RM500,000 6 years down the road is a vacation plus a new Vios and many more other smaller stuffs…. IF you still hate property at that time, you can sell and keep that RM100,000 or more. Surely we do not hate cash?

9) The banks kept rejecting my loans. Whoa, if this is the reason, is it the fault of the bank? (How not get rejected article here) Actually when banks stop lending, they stop earning profits. They want to lend to you yeah. Just try to ensure we qualify for one and everyone’s happy.

10) I actually want to buy. I am just waiting for the property bubble to burst. This is a question of when, right? Here are some reasons for a property bubble to burst. Real economic indicators, not speculations. 3 Property bubble signs and more

By the way, there are no ending when it comes to reasons not to buy. Here are just the typical 10 and if you know of other even better reasons, please feel free to comment. If they are ones I missed, I will add it in and credit you too. Happy thinking and not everyone needs a property, seriously.  They just need to be financially-savvy (article here) because the world today is no longer the world yesterday.

written on 6th Oct 2018

Next suggested article:  Financial risks, household debts and lower income households

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