What’s your dream home? A bungalow with lots of land around the house and you could even drive a car around the house? A luxury condo with a 12 feet ceiling height and an olympic size swimming pool within a super low density development of say 100 units? An affordable apartment of 900 sq ft and priced at RM288,000? Or perhaps just a roof over the head, close to the place of work and near enough to the grocery shop and restaurants?
To everyone who’s thinking of a dream home, stop dreaming. When we first started working, our dream home will be one that stretches our income to the limit or perhaps we need help from the PA-MA (father and mother) bank too. My dream home when I was 25 years old? An apartment of 730 sq ft. My dream home when I was 27 years old? A 1,258 sq ft condominium in a secondary area in Penang. (That’s what my salary could afford!)
However, when we rise up the corporate career ladder, our dream home when we were earning much lower salaries will change too. The new dream home will again stretch our income to the limit because now we want something even more expensive because it shows our social status… This does not stop here yeah.
If we suddenly become a CEO one day (earning millions of ringgit per year), then the dream home will change again. Perhaps the only difference then is that when that day arrives, our dream home can be most of the homes in Malaysia and need not be an aspiration anymore. This is why there is no need to stretch ourselves so much that we become a mortgage slave (read here to know what is a mortgage slave).
It is much more important to buy a place which we could stay for a couple of years and during those years to keep earning higher salaries and saving ever more money. Once we found a property which we see as an upgrade to the one we were staying, go for it. As for the one we were staying, we could sell it for capital gains or even rent it out for continuous rental yield. If we had hold it for 5 years, chances are the rental could give us a positive yield already.
I said, chances okay. There’s no guarantee. However, what has happened when we bought that second property is that we now have two properties instead of only half-dead paying for one… A dream home should be an ever evolving one yeah. It’s definitely not that first property which you want to buy to impress your peers… Oh yeah, that applies for a car too. Buy a convenience (transportation) and not buy a suffering (paying through the nose every month. Cheers.
Next suggested article: Yeah. Lower mortgage rates. Oops, lower FD rates too.