property rush

Now I can see a lot of people are rushing to buy properties (including me I guess..;)). It’s a good move actually, as long as you know what are you doing. So in this case, it is proven that the english education is really important. Opps sorry… it is about property education…;)
But the question is, are they really know? or just follow the crowd? or maybe just follow ‘somebody’? Hopefully they know lah (including me lah..;))
Ok take this one example:
Year 2012/13 – Under Construction
If you buy 1 small unit (studio) with the price RM300k++
Monthly Repayment : ~RM1,500
Maintenance Fee : ~RM100
Other Cost : ~RM100
Monthly Rental Income : ~RM1,800 (realistic? at certain area no doubt but not at all areas)
Perhaps, we can make RM100 extra every month if we are lucky enough.
Ok, now we look at the completion date:
Year 2014/15 – if you want to flip : this will be under new Owner.
Let say, we assume the price is go up to RM400k (realistic? at certain area no doubt but not at all areas)
Monthly Repayment : ~RM1,900
Maintenance Fee : ~RM100
Other Cost : ~RM100
Monthly Rental Income : ~RM2,200 (realistic? at certain area no doubt but not at all areas)
So the new Owner is still making RM100 extra every month, isn’t it? A pretty good deal!!
But it is really tough to sell to the new Owner at that price (if he/she is the investor – ROI is not good right?) unless we sell it to the genuine buyer. But the question is, are they really want to stay there? with all the tenants (students, expatriate, etc). Maybe they will, but I don’t.

What happen if we can’t sell at the target price? It is go back to our buying objective (flip? rental income? combination of this 2?)
Plus with the superb offer from the Developer:
No/very low down payment
Rebates/Discounts
Free Legal Fees
DIBS
Why the offer is very superb? Must be something right? BTW, nothing to loose right? Just small amount of down payment. But remember the remaining 90% loan is under our name right? We have to pay the 90% but the good news is – not now.

We have to consider from all angles – what is our objective, our risk tolerance and our personal financial strength.
P/S : Just to provoke thinking and provide different perspective. Right or wrong purely based on your personal ‘analysis’.

3 thoughts on “property rush

  1. noreply@blogger.com'Anonymous

    Nice entry bro and totally agreed.
    Simple words to describe this phenomena, ‘property bubles’.

    It will burst in 2yrs time (2015), lets meet up and celebrate if it’s really happened.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge