Irresponsible “property gurus” are back. 100% loans and money back guarantees.

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I personally do not agree that when one gets cheated, it’s the fault of someone else. This is despite the fact that these schemers are always getting better. In the property market, many “property gurus” are using social media advertising to tell people that this is the best time to buy for lucrative returns. For example, the numbers mentioned are always very attractive and potential buyers just need to sign the loan documents. Once it’s approved, they will get cash back as well as 100% loans.

By the way, property investment is a hedge against inflation. In other words, instead of letting inflation eat up our returns, a property will continue its slow price increase so that the value of this asset continue to ensure our wealth is not dropping every year because of inflation. It’s a slow process. Thus, any sudden price increases are purely speculative in nature.

Article in thesundaily.my Property expert Siva Shanker who was also Malaysian Institute of Estate Agents past president shared that the Malaysian property market has moved into positive territory last year (2018). This is the first sign of improvement since 2012 and bringing with it the return of irresponsible “property gurus.”

He shared that the modus operandi of these “property gurus” would be to offer easy loan schemes such as 100% loans with money back guarantees aimed at speculative buyers. They will also conduct seminars on how to invest in property and promoting these schemes all over the internet which attracts many people.

He said, “Why is this so rampant? These property gurus are basically teaching people to buy without putting any money down. These are the same type of people who caused the problems back in 2012. We could potentially see a repeat of the same problem.”

He added that current overhang issue was because of excessive speculative buy in the past. He said, “Why did we get into this situation in the first place? Because everyone was building the same thing, within the RM500,000 to RM1 million range. Serviced apartments were built on commercial land, which is usually for office towers and shophouses. For a long time, these apartments were sold very quickly. But they were sold to speculators who could neither afford nor need the properties.” He shared many more in the article. Please read it here: Article in thesundaily.my

Think really objectively. If a property is RM500,000 this year, what’s the reason it could suddenly increase to RM600,000 next year? Our salary does not rise so fast. Most businesses do not suddenly earn super huge profits within a year.

Besides, the the construction cost definitely does not rise so fast. Land cost is usually 10% of the typical Gross Development Value (GDV) which meant that even if the price of land increases, it should not suddenly push up property prices so much! Cement prices even stayed the same! Happy understanding yeah. Property investment takes a long time and effort.

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<Featured Image is courtesy of Stock Photos from tolikoff photography>

Next suggested article:  Buying based on WHY. Not based on speculative thoughts

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