Jan 21, 2011
extracted from starproperty.my
I’ve bought an apartment in Subang Jaya for my personal stay at a 10% downpayment. It was my first property, which I am also sub-letting to a friend. My motivation everyday in working is to acquire the funds required to purchase many more properties as I target to attain 10 properties by the time I am 30 years old.
The update by Bank Negara has struck a major blow to my plans as the capital required for each property is two times than required now, and of course a lot more thought has to be put in before the purchase. What is best now? Do I just accumulate the fund in the bank and invest in small stocks and wait it out? Or put it into the 3rd property onwards as soon as I acquire the funds to do so?
I love your plan of investing into property with direction. If you should achieve 10 properties by 30, you would have your financial future brighter than many!
To be honest with you Navin, you should seriously consider coming for our programme. If you truly believe in investing for your future, then you must come up with a definite plan of investing by building a safe and solid portfolio. Also, if you can afford to put 30% down on properties, means that you have the capability to fund the projects, meaning you have enough funds and time (due to your age) to achieve your necessary portfolio even in current times. It is the knowledge that you are lacking, that’s all.
Do understand that Bank Negara is implementing the current restrictions due to many investors who are buying properties at crazy prices. The government is doing the right thing. Sometimes, when people buy without thinking it through, it takes the “big brother” to kick some common sense into these people’s head. However, last I heard, many are still going on a buying spree. Everyone is looking for a way to circumvent Bank Negara’s restrictions.
My advice is to invest wisely. Take this time to study the market. Before buying, ensure that the rental returns can cover the property amply. Go beyond what most would do and look for the gems. Dig deep enough to discover good buys in the market. These are what we call motivated sellers or properties that are priced below-market. Yes, there are still quite a few around. A hot market just makes it harder to find, but not impossible.
Also, think of it this way, if you did buy a good property, even though you bought it with a 30% downpayment, consider alternative strategies to cash out the money. If it is a good property, you can consider refinancing it later to get the money back. Just make sure your tenant is financing the installments (with a bit more margins) than you.
Last but not least, when is there a good time to invest in properties? The answer: Anytime. You just have to know the right strategy for the right time. Sometimes, it is a good time to buy, and other times, a good time to sell. But it’s almost always good to rent out.