Property Investment 101: Property price too high lah. Who should we blame?

Property price too high lah. Who should we blame?

Seriously, that’s the price you paid for? They promised you? They gave you rebates? You spent it all?!

Property prices don’t necessarily go up just because the market is moving or seems to be getting better. If we bought at a high price because of a great sales pitch by an attractive sales person, someone offered us a big discount, or an area which is the rage, that doesn’t guarantee a price increase.

Also, if you used the money from the property purchase to buy things instead of saving or investing, it affects your finances. This is why some people struggle with property downpayments. They might follow financial advice to save money, but then spend those savings on purchases. Some people believe renting is better than buying, and on kopiandproperty.com, it’s suggested that “renting is forever.”

Be careful and know what you buy

One easy way to know if you are buying an overpriced place is to look at the property price versus similar properties (secondary market) in the area. If these properties in the secondary market are not showing any increasing signs and the rental seems stagnant, then that whole neighbourhood may be an issue too. This is why when we buy, we need to know what we are buying. The discount percentage alone must not be a reason to buy yeah. There’s a reason why a huge discount is given too.

Another way to know if property price is too high is to compare versus rental

Can the rental cover the monthly mortgage? I think the answer is no. However, can the rental cover at least the interest payment? Maybe this is worth considering IF the unit can be easily rented out. Then, someone is paying all your interest to the bank for you. Note that the danger is always when you could not find someone to rent the property yeah.

If however it’s for your own stay, then you have nothing to lose yeah. Else, the rental you pay may be equal or higher than the interest payment on your mortgage yeah. At the end of the day, when you buy, it’s yours after 30 years. If you rent, you just need to keep renting even after 30 years or even 50 years.

If need to find someone to blame, then blame the one who bought lah

Many friends said they bought because someone told them to buy and promised them great returns. Many friends said they thought the good times will last forever. Many friends are now in trouble and still struggling to keep paying high mortgages while having low or no rental. Understand what we buy thoroughly. If something is overpriced, it will be overpriced even whether it’s in popular area or new area. Buy too high, we will suffer the consequences. Happy buying a good property.

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