Why buy secondary property? 6 things you should know.
My First Home
My first home was from the secondary market. My second home was from the developer. My third home was from the secondary market. My current home is also from the secondary market. My future home is from the developer. I have worked for 23 years and by the time I move into my 5th home, I would have worked for 25 years. On average, I move once every 5 years. 🙂
I do think by the time keys are handed over and renovations are completed, it would already be in the 2nd quarter of 2023. I think it’s okay. The more time I have the better. I still do not know where the renovation money would come from yet. Perhaps I need to start saving more every month.
Alternatively be better with stock investments? That topic is later. Today, we talk about the reasons I bought properties from the secondary property market.
Advantages of Secondary Property
1. Choices are aplenty. Actually, the number of available units may just be one or a few but if we look at the secondary property market, the number of choices are aplenty. We could even buy secondary units from mature areas where there may no longer be any land to build new properties.
2. Location Availability. In fact when it comes to landed units for example, there are definitely no new units in mature neighbourhoods anymore. Thus for certain type of homes, the availability is only within the secondary market.
3. Prices are negotiable. Beyond just prices are negotiable, there is a possibility for good deals. If we are lucky, we may get to buy a unit from an owner who’s moving back to her home country for example. This is very different from a fixed price from the primary property market.
4. Quick Turnaround. We buy, we get a loan and we get the keys within a few months. Even if it’s a leasehold property, we could still get the keys between 6-9 months unless we are truly unlucky. Thus, if we needed a place to stay, this is the fastest. If we needed a place to rent out to others, this is also the faster choice too. My unit in Penang was sold and completed within 1 month because the buyer bought it in cash. Yes, it happens.
Disadvantages of Secondary Property
5. Looks Older. Let’s face it. Everything we buy, we want it to look new. Thus, sometimes we may lose interest with the property simply because of its design, maybe even because of its neighbourhood of narrow lanes for example. This is also the reason why secondary properties usually carry a discount versus new properties even for similar units.
6. Need for Repair. The piping, the electrical lines would have to be checked and changed if necessary. Once we move inside and we want to change, our nightmare will begin. So many times, these are the potential costs. There’s also the maintenance for many of the items such as the front gate… (landed home), the paint job (internal and external), cleaning and more.
If any speaker were to tell you about a certain property, they may have incentive to do so. If you actually like the property, then proceed to buy. Do not buy because of the speaker. It’s not his home.
If the real estate negotiator were to tell you about a certain property from the secondary market, ask him lots of questions and do your own due diligence. Again, it is not his property. It’s yours.
If you ask me, my answer remains the same. I have bought both and I do think both primary or secondary property have their own advantages and disadvantages. You buy the one which fits your needs the most. The rest are not that important anymore. Of course, do not overstretch yourself just to buy one to please your friends. It’s really not worth it.
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