4 important things to understand for first time home buyers
I was once a first time home buyer too
Are you a first time home buyer? I was one as well, once upon a time ago. Are you worried because this is going to be a purchase of a few hundred thousand ringgit? I was as well. I thought buying my first property was very scary and buying my second property would cause me potential bankruptcy!
Do you want to know some tips from a former first time home buyer who is NOT from any property developer, not from the bank, not part of any real estate agency and does not run any property course? Yes, that’s me. There’s no link below to ask you to buy any property or whatsoever. Just tips from a former first time home buyer who now have access to swimming pools in condos in 6 cities and towns in Malaysia.
Yes, all that description describes me, a blogger in kopiandproperty.com Happy reading and joining me in this property investment journey. Just 4 questions to start pondering. Note, nothing in this article tells you to buy tomorrow. That decision is up to you yeah.
#1 – When to buy?
Honestly, for first-time home buyers, stop worrying about when is the market going to recover or when will the market reaches the bottom. No one could ever tell you when that will happen. Property buying is LONG-TERM. This is not buying this year and sell next year! These stories were very yesterday. Today, it’s more of finding the right property and ensure we do not buy something overvalued just because everyone says it’s a great buy.
Always understand that when we buy that first property and use it for own-stay, we save on rental which will likely be HUGE if we are to calculate them for a few years. Earlier article here.
#2 – When is the crisis coming?
Second thing everyone thinks they will gain a lot is when a crisis comes and the property prices crash. By the way, every time there’s a crisis, home prices will drop. This happens in ALL markets. The reason may not be due to property though. It may be due to loss of jobs, thus the seller selling the property and starts renting instead. In other words, when a crisis comes, it does not just affect the home owners, it affects the home buyers too.
In fact, from the 1998 to the 2008 and even when we look at all advanced property markets, the same things happen! However, it will soon recover once the economy moves again and well, prices are usually up because salaries tend to rise with time. Earlier article here.
#3 – What’s the future like?
Frankly, no one knows for sure. If anyone were to tell you 30 years ago that China will be the 2nd largest economy today, you would have been rolling to the floor laughing. Well, it has happened. If someone were to tell me a property I bought for RM247,000 could be sold for RM640,000 8 years after, I would also laugh and tell the person to stop joking. It did. Just remember, inflation would continue to make the value of money become smaller and that’s why prices move upwards yeah.
If we look to Malaysia, then we should realise our median age is 30. In other words, our young population is still many times our older population. Note though that ageing nation will happen sooner than later but it’s a mere 7%. Demand for homes remain robust unless everyone prefers not to stay in a home instead. If not stay in a home, then stay where?
However, it has got nothing to do with buying property only in the youngest country yeah.
#4 – Where to buy?
That mantra of location, location and location is a correct one. However, for first-time home buyers, if we buy based on the mantra of WHY, WHY and WHY, then our choices will suddenly expand and the price range will drop too.
Everyone must remember that once upon a time, there were only those few mature neighbourhoods. Today, there are so many new emerging neighbourhoods. Most of these are not within 10km away from the KL city centre. In fact it’s moving further away too. Open up your choices and stop looking at places where everyone is looking. Value is to be discovered and usually does not show up if everyone knows about it already.
Usually, driving just an extra 10 minutes would reveal properties which are much more affordable compared to that area we wanted to buy.
Buy one which meets many of what we like, not when we find one that is PERFECT because it’s likely to be EXPENSIVE too. Buy one when we could afford, so that we do not spend that extra money on something else which we could afford but does not need.
Buy one so that if we do become those countries where properties got too expensive, at least we are benefiting from it and not suffering from it. If we think of Malaysia as a follower when it comes to real estate, then get ready for what has already happened in many of these advanced property markets.
Happy reading and please feel free to write in to share. Let’s help as many first-time home buyers as possible to understand that opportunities do not exist only for the super-wealthy or those buying to speculate. It exists for all Malaysians but some just do not have enough information to make their decision yet.
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