Property Investment 101: 7 reasons it does not need to be a new property

Property Investment 101: 7 reasons it does not need to be a new property

A close friend who’s a senior manager in a US MNC asked me about purchasing a property as she wanted to advise her staff who’s looking at new properties and mentioned to her that the prices are beyond his budget. She said her staff showed her many property brochures and the prices and told her that all these properties are priced beyond his salary.

I told my close friend that it does no tneed to be a new property because from what she told me, ther staff seems to be focused on only new properties from the developers. Sometimes, it is also possible that we only look at places very near to our working place. That would also mean that prices may be higher since everyone working nearby would want to stay at the same place too. Moving just 5-10 minutes further away would reveal lower prices. Here are 7 other reasons why it does not necessarily need to be a new property.

#1 – Touch, Feel and See Matters

Okay, when it comes to new properties, one can also touch, feel and see it at the developers’ gallery. Let’s understand that every developer would tell you that this is a show-unit and that it is as close as the actual unit would be when completed. No one is able to hold them accountable even if one were to take a super detailed video. However, if we are buying from the secondary market, there is no need to guess. We can drive around the area, we can touch, feel and see exactly what we are buying too. In other words, what we buy is really what we get.

#2 – Urgent Matters

Assuming one wants to move into the property as quickly as possible, then the secondary market will definitely offer a faster schedule. The unit is ready and will not take the next few years to complete for new properties. Even for leasehold properties, documentation should just take up to 6 months and one could move into the new property and start enjoying and perhaps even saving on rental since the monthly repayment is now going into an asset.

#3 – Choice Matters

Every year, there are maybe up to 400,000 property transactions. Roughly 20% of these are for new properties and the remaining is for secondary properties. Think logically, which would provide to potential buyers many times more choices? Not to mention variety because usually new properties are built based on trend and it will not offer some types of not-in-trend properties.

For example? Larger sized units. These days, due to the need to cater to the price, the units would become smaller. For high-rise, anything above 1,500 sq ft is not so common. Meanwhile for landed properties, it is more likely to be 18 x70 or 20 x 70 versus 22 x 70 or even 24 x 70. I am speaking only about terrace homes.

#4 – No Renovation Matters

A new unit usually comes empty. Buyer would need to engage renovation people to renovate the place. This will usually be another huge chunk of expenses. People usually say renovation cost is around 20 percent of the property price. Thus, a RM500,000 new property would mean another RM100,000 for renovations. Many may not have this money and may sink deeper into debt when this is the case. Sometimes, we forget that buying new means we also need to include renovation costs too.

#5 – Got Renovation Matters

A secondary unit which has been occupied for some years would most likely have renovations done. It is really possible to gain from these renovations unless you hate the renovations completely. Then again, if you hate the renovations completely, please buy some other unit because tearing down renovations would cost a lot of money too. If we assume we can accept the renovations with minor modifications, then we are saving up to 20 percent ot the new property price. Again, this is a lot of money too.

#6 – Discount Matters

It is common for people to say that with new properties, one would have hefty discounts from developers. Always, always and I repeat always be wary if the discount offered is very high. For example, 20 percent or higher. This means two potential things. The initial price was just too high. Or the developer may cut corners in order to be able to construct the property with a super high discount. UNLESS the development is ready and the developer just wanted to sell off all their units and move on to their next development.

Meanwhile, most of the time, a secondary property within the same area as a newly launched property, you will already see some discount in the price when compared side-by-side. The reason is an emotional one too. That secondary property does not give the new feeling anymore. It may have some stains in the kitchen, some of its paints are peeling etc. There would be some costs to spruce up these shortcomings but the cost is likely to be lower versus the new property’s price which is usually priced for the future as the home will likely be ready only 2-3 years down the road.

#7 – For rental matters

/Some told me they wanted to buy a property because they want to be a landlord. They want to earn rental income. If this is the case, then I wonder why would they buy a new property and then delay this rental income dream for a few years? If it’s truly for rental purpose, find a property whether new ot secondary and find out if renting out is easy. If the whole neighbourhood is easy to rent out, then buying a secondary property meant that one’s journey to earn rental income starts quickly without further delay.

Conclusion

There are many great reasons to buy a new property yeah. Emotionally, you will feel super happy seeing new things. This is why a new smartphone excites you more than your old one. The same thing applies to the new car, the new handbag and new everything. Nope, I never said a new partner. For a partner, find one who would love you and cherish you. It should not change just because you have been married for over 20 years okay.

Another reason for new property is that it will be based on the latest design. For example, broadband ready or even charging stations for electric cars or even very caring to the environment and more. It is not enough for these few lines yeah. I will have to write an article dedicated to just new properties. Personally, my first property is from the secondary market (Relau, Penang), second one was new (Sungai Ara, Penang), third one was from secondary market (Kelana Jaya), fourth one was new (Kota Kinabalu) and I think you get the picture. Over the years, I found that both have their advantages and we just need to buy accordingly.

Last but not least, kopiandproperty.com does not sell any properties for developers. We have been approached many times but the answer remains the same. We provide reviews but any selling is up to the developer and the buyer. Thus, any choice is a good choice as long as it meets the requirement so fthe potential buyer. This is why we are neutral and feels that both new property and secondary properties have their own advantages and disadvantages too. Happy deciding.

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