Property Investment 101: Here are 5 reasons why buying a property is always very challenging (then, now and future)
#1 – Price is never at the level I want
As soon as someone said that property market is challenging, many potential buyers would tell all their friends that they are waiting for the property price to fall lower. The price has to be right. When asked what’s the price they were waiting for, the answer is usually they have no idea yet but they will make a decision as soon as the property price falls to a level they want. Decide lah, which level… is the level?
The unfortunate thing is this. Too many people arre looking to buy into areas where everyone is also thinking of buying. This caused the demand to be higher than the typical limited supply of properties in these areas. Most of the time, mature neighbourhoods where everything is already fully built and everything is available too.
#2 – Property market is never ready
When property market is booming, too many people who does not own a property said that the property market is likley to crash. When the property market is closed, for example during the Movement Control Order (MCO) periods, then people say that the property market is too quiet. When the property market is neither quiet nor booming, people say that they cannot see the direction which the market is going yet. Hahaha.
#3 – Renting is more comfortable
Not many people could save RM50,000 in order to pay for a downpayment for a RM400,000 property. RM50,000 savings in 5 years meant that this person may have to forego many, many, many things he / she loves to do. From vacations to nice restaurants and even to buying new gadgets. The more comfortable thing to do is just to rent a very nice place and enjoy that nice place and not thinking of saving like crazy, forego everything one loves and then buying a place which is inferior versus the place one is able to rent for the same amount every month. This is why renting is much more comfortable and easy to do too.
#4 Salary is just too low
This one is definitely the fault of the employers. They should pay me more money so that I could use the money to do everything I want including buying a property. If they pay me so little, how do they expect me to balance my expenses and savings and then still having funds to buy a property? Definitely the fault of the employers who are earning huge profits but paying me peanuts and thus cusing me unable to buy the property which I want.
Salary too low has always been a complaint. I have an ex-colleague who told me she bought her second property after listening to my sharing. She told me she was aiming for the third one. Her salary is nowhere near T20 catagoery yeah. She brings her own lunch… she drives a typical national car,… she has a handbag which I have no idea about the brand…I salute her for not complaining about the same thing as most people.
#5 Have zero idea that property is compulsory
Too many people continue to read too many investment ‘experts’ who does not think property is compulsory. Continue to share all those calculations showing their favourite investments could give returns which are double that of property. They also show that many people could retire without the need for property investment. They also show how much one could save if they did this and that. Frankly, majority would need a property because they cannot SAVE ENOUGH, they cannot EARN ENOUGH and they cannot AFFORD to pay rental forever.
Without a property, this is the needed amount in order to keep renting till we no longer need to rent.
20 years x 12 months x RM2,000 (rental and we assume price does not change) = close to half a million; RM480,000.
As long as everyone has this half a million when they stop working, OF COURSE you do not need to own a property.
Conclusion
All the best no matter what you chose to invest in. In fact if you could start a business and it could earn you much more money than needed to keep renting, please keep renting and make that business work. Property is NOT needed when one has by far more money than what is needed to rent a place to stay for probably 20 years. Most working professionals stop working between 55-60 and they usually live to 75-80 years old. Or perhaps just work far longer than the typical Malaysians lah. Then, one would continue to have salary to cover rental every month.
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