If you buy the 2nd property, you are a property investor, agree?
One recent article got a lot of hits / clicks. This article: Article in kopiandproperty.com “Investors Make Up 81% of Residential Property Purchases in Klang Valley in 2020; more than first time home buyer.” Briefly, this was an article with charts showing that first-time home buyers (means buyers who were buying their first property) is down to less than 20% of all the total of all property buyers. In other words, over 80% of all the property buyers in the market were buying a second property or higher.
In fact, it seems that everyone was worried what would be happening next. So, who are these people who were buying their second property or more? Property investor? Some answers as below for all to ponder yeah.
Second property purchaser could have been an upgrade too
When I bought my second property in 2007, it was an upgrade. From a 730 sq ft apartment, I was moving to a 1,258 sq ft condo with full facilities and even a running track which runs through a small secondary forest. Okay, I only did manage to run a few times throughout my 4 years of staying there. Still, it’s available and that’s what matters. It’s the same with all the special features on your phone yeah. How many do we really use anyway? It’s also the same as a modern car too. However, we want it to have more… than others. So, if we could do without all these ‘extra’ then we could buy something cheaper. Think, decide. It’s an option anyway.
Second property is when property investment starts?
I always share with everyone that property investment really starts only from 2nd property onwards. First property we buy should preferably a home unless of course we were staying for FREE in our cozy parents’ home. If you are staying for free, then even the first property could be an investment property too. Usually when we buy the second property, we may have wanted to rent it out for rental income or we could have bought it as an upgrade and renting out our first home instead. Whether it’s renting out first home or the second property, we have stepped into the property investment journey.
First property always the hardest, especially when there’s uncertainty thrown in
Saving for the down-payment usually takes a very long time (sometimes like forever) because there’s just so many temptations of things to buy. When my parents were young, they did not have that many gadgets which they could buy and certainly not as easy as a few clicks. These days, there are those latest things which others have and we want to be seen as equal to them. There are items which we believe would make us more respected if we are seen to be holding one.
Furthermore, there’s too many ‘guru’ among our friends, especially those who have yet to buy but seems to know everything about the property market. (Heck, same as those who has yet to be jabbed but seems to know everything about the vaccine, especially all the unverified news or lopsided news about their favourite vaccine.) The most amazing thing is however not our ‘guru’ friends giving advice but the fact that we chose to believe them!
This is why most first-time home buyers may be the ones who would prefer to wait-and-see versus jumping in and fearing that they may drown. Not many have the courage to buy a RM500,000 home or even a RM400,000 home yeah. I remembered it took me 6 months just to decide on a RM123,000 apartment yeah. Of course, it has gotten way shorter ever since but since we are speaking about first time home buyer in a COVID-19 situation, it’s definitely very scary to them. This may be that reason why the number is small versus the ones who were buying 2nd property or more.
Just need to know how the number came about, that’s all
We can see the number of first time home buyer as very small versus the ones who are not or we could also realise that this number for first time home buyer is small because they are all waiting until situation gets better. Thus, it’s possible the number may suddenly grow in the near future when times get better.
There’s also the fact that many of them may also have been investing into other places instead of a home. We also have many of these “guru” of other types of investments who continue to tell them that property investment is slow and returns are low. By the way, this is TOTALLY NOT TRUE. Unless we are talking about quick returns of days, then they are right. If we are talking about returns within a few days, then just remember that the risk of losing money is also within days too yeah. Property investment meanwhile, no matter which country we look, if it’s for long term, the price is always up. Buying a property is a simple hedge against inflation everyone must have. Cheers.
Next suggested article: 4 reasons to rent a place versus buying a place