October 11, 2018
kopiandproperty.com readers would have noticed that I do not usually do “top 10 reasons …. ” or “top ten things…” kind of articles. However, when I wrote “10 reasons why we will fail to buy a property” last week, the number of shares were like 5x higher than usual. Perhaps these type of articles are easier to read and thus to share. Here’s another one. “10 reasons why we should buy a property.”
#1 – It’s safe and real. Shelter is the first thing everyone needs based on Maslow’s hierarchy of needs. In brief, this is the foundation before we start thinking of other things. Imagine getting a job within Greater KL but we have no place to stay? Yes, it’s true, we do NOT need to BUY because we can rent too. Well, someone has to buy that property to rent to us, no?
#2 -It’s safer and easier. View a home, like it. View the surrounding amenities, like it. Check google map for the duration of drive to office every morning, like it. With these three likes, we have already done sufficient due diligence if we are buying a home for own-stay. Try doing the same with stocks? Understand the business… well. Get to know the management team…well. Know who their competitors are, know the industry and more… It’s not easy to buy a stock yeah… Let’s not even start about buying commodities or even cryptocurrencies yeah…
#3 – Leverage. Invest RM50,000 into the stock market and it rises by 10 percent, we gained 10 percent. Invest RM50,000 into the property market (10% downpayment) and even if it gains just 5%, that’s RM500,000 x 5% up which is RM25,000. Our total investment was RM50,000. Return on Investment is thus RM25,000 which is 50%. Sounds unreal, just like a scam…
#4 – FORCED to save. In a good way, anyway. We buy an affordable place to stay as a start. A RM200,000 home with just a 2% increase in price every year will be RM500,000 30 years later. It’s true, RM500,000 30 years later may not mean much but how else could we save RM500,000 if not forced, by property? By the way, the property price increase has been 6.7% on average for the periods of 1990 – 2016 for Malaysia. Here’s that earlier article.
#5 – It does not suddenly lose half of its value overnight. Many other types of investments would lose that. Remember a company called Enron? It was overUS$90 and in a few months dropped to less than US$1 and in the end, worth nearly nothing. Gold fluctuations? Oil fluctuations? It’s hard to control them but a property which is NOT a wrong buy will usually be just alright.
Part (2) tomorrow yeah…. Articles which are too long are usually not popular…
written on 6th Oct 2018
Next suggested article: My children and their future when it comes to property investment