Tuesday, May 11, 2010

Should I Buy Landed Property or Condominium / Service Apartment as First Investment Property?


Question: My budget is below RM450,000. I am not sure to buy a landed property or condominium / service apartment?

Answer: if I’m in your shoes, I prefer to buy high rise residential property example: apartment, condominium and service apartment. The reasons being are: -
I’m neither a cash rich nor strong holding power investor. Therefore, landed property will not be the best property type for my investment portfolio strategy.
I need positive cash flow property to earn passive income for long term planning. It is a norm for high-rise property having better rental yield compare to landed houses.
I need good rental income statement (positive cash flow) to increase credit score so that banks are willing to lend me more money to buy more properties.
I always believe in “Power of Leveraging”, that is why I’m keen to buy property for investment, using others people money (banks’ money) to make more money. Banks are making big money using others people money too, isn’t they?
However, that is nothing wrong with buying landed or high rise property for your first investment property; the best investment strategy is all depending on individual needs and objectives.

Is Now A Good Time to Buy Property For Investment?

6 May 2010 | Category: Property Investment, Questions and Answers | Leave a Comment

Dear Horlic,
My name is CL (Miss). I found your contact through your webpage horlic.com when I am trying to search for property investment ideas and advice.
Knowing that from monthly salary, it is quite hard to earn sufficient money for better living quality and children’s education. Hence, I am trying to search for opportunity in real estate investment to make hard earn money grows faster.
Since it is my first investment in property with my hard earns money, it must be careful and smart. However, I am a bit stuck with few things and hope your kindness to advice me.

Question: Is now a good time to buy property for investment? My friend – a property agent, said now is very risky for secondary market, but new launch is ok. What is your opinion?

Answer: “Anytime is a good time to buy property”, sound familiar? I believe most of the property experts saying the same thing.
For me, now is not the best time to buy property in Malaysia. One of my major concerns is the rumor of Mortgage Rate Resets on 2011/2012, which might be another economic crisis disaster going to spread over the world.
Is it a rumor or going to happen? I don’t really care. It’s better for me to be prepared and restructure my investment profile and strategy, mainly to lower down the investment risk. Cash is King! Opportunity is always there when the cash with you.
For you, if you insist to buy property now, it is more advisable to buy within areas you are familiar with. At least, you have the first hand information on what is happening surrounding the property.
Next, I agree with your property agent, buying property from developer is lower risk compare to secondary market. But from my point of view, it’s nothing to do with the timing of you buy from sub-sale market either now or later. It’s about your foundation and knowledge in investment property.
Property gurus and experts do buy property and make money during good and bad times, right? Unfortunately, we are not one of them. So, play safe.
Basically, second hand property involves more procedures, slightly more complicated, so the risk is higher for you. Whereas, the procedures of buying house from developer is straight forward. Of cause we are talking about reputable property developers in Malaysia.
Why not take this sweet time (at least you are having the cash in your hand not the failure investment with bad debt) to learn more before making any mistakes which might cost u a lot of money. Try to attend some free property seminars or more reading on real estate books, it definitely helps a lot! Good Luck!
Stay tuned for Miss CL next two questions..


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