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True cost of a property is NOT when you are young.

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True cost of a property is NOT when you are young. It’s when you are old.

I share because I care

By the way, I do not run any property investment courses. kopiandproperty.com is also not part of any property developer group. I do not even have a Real Estate Negotiator (REN) tag. There are also no links in this article to buy any property as well. My hope is that everyone understands the importance of owning a property because I have experienced the advantage of property investment. Let’s start today’s article.

Property Ownership is “insanely expensive”

I saw a tweet along this line. If someone is under 30 and they start their property ownership journey, they are going to suffer because it ties someone to “insanely expensive”. This tweet received over 800 likes which is great. It shows that people truly agree with this statement. By the way, let me tell you this fact. I agree too! I struggled to pay the monthly repayment for my first apartment when I was in my 20s.

Struggle to pay continued!

I struggle even more when I bought my second property when I was in my 20s. If we combine the cost of these two properties versus my salary then, it’s exactly “insanely expensive.” In fact I needed 3 months to think before I could decide to buy my second property which is a condo. Paying for two properties at the same time is definitely categorised as “insanely expensive.”

Struggle has its advantages

Guess what happened when I struggled? I started thinking where I could save more, how I could earn more and all these meant that my struggle helped me to become better as well. Think of the butterfly trying to emerge from the cocoon… It meant that I did not buy a new car until when I was 35 years old… For many people, by 35 years old, they may be already about to buy their 3rd car… I continued to drive my father’s Nissan Sunny until it reached close to 400,000km.

What if I did not struggle to pay my monthly mortgages then?

Now imagine if I did not struggle then… what will happen when I am old and is still renting a place? It’s going to be a super expensive decision because I will realise that property prices do not actually go down over the years. I would realise that the money I spent to buy other things have all gone to waste because those things did not hedge against inflation and did not appreciate in value as well.

For example? A new smartphone every 2 years… That’s 15 handphones easily during the time when we are working and 15 x RM2,000 = RM30,000. Oh… that’s where my RM30,000 has gone to… This is just one example yeah. There are also the shopee and lazada examples over 30 years which you could buy simply because you did not struggle to pay the monthly repayment.

A property would soon become insanely expensive forever when we are old

It does not stop here. Once our income stops, then we will realise rental is still continuing. Oh dear… that’s insanely expensive. This is they the true cost of a property is NOT when you are young. The true cost of a property is when you are old and have no other options. Imagine just paying RM1,500 per month x 12 months x 25 years… That’s RM450,000 which will disappear from your bank account after your income has stopped. This is why true cost of a property may only be known to us when we are old…

This assumes that rental remains the same forever which does not happen yeah. This did not include all the rental one has paid from the day one started working until the day they retire. Plus the fact that if you have children, they have to continue paying as well since the property is not yours and thus not theirs either.

It’s NOT just any property yeah

If we do not know what are we buying, if we do not know the typical price per sq ft, if we just simply follow what our friends say, then perhaps buying a property is really not for you yeah. Anyone buying an overpriced property is likely to pay for it for a very long time and this may also be one reason why some people say they were trapped because of property investment.

Actually, they were trapped because they bought the wrong property, that’s all. It has nothing to do with property investment. Last year, we have close to 200,000 residential property transactions in Malaysia. Now imagine if majority would lose money 5 years down the road… Do you think more people would buy? Happy thinking and deciding which is the true cost of a property and which is really insanely expensive. When we are young or when we are old.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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