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Why buy/invest properties?

May 18th, 2018 Leave a comment

why-invest-propertyby Anders Ong

Like usual every property investment book or stories will have a section named “Why Buy/Invest Property?” There are FIVE main reason WHY:-

1) Roof Over Your Head

First and foremost, the main reason of one purchasing a property in the past is always for own stay. This is to make sure there is a house for family to stay under a roof and feel safe. But from time to time it became a form of investment because a home is always a necessities instead of a needs. No one will be willing to let their loved one stay outside without a place to sleep.

2) Capital Appreciation

Capital appreciation are one of the easiest way to earn money from properties. It is simply the increment of property price from time to time due to market sentiment and economy. Once the property price increase to a certain price we can sold it off to gain from the differences of selling price and purchase price. For instance, there is a condominium in Penang Island, the standard unit of 1,000 square feet was sold for around RM280K on the year of 2010 and once it is completed on the year 2013 the price valued at RM600K. So the property value had gone up and if you sold it off you will earn around RM320K gross. It’s a generous lump sum gain for those investors in terms of capital appreciation.

3) Cash Flow

Cash flow refers to the inflow of cash time to time from the holding and management of properties. It is a very simple practice of letting properties for monthly rental return or daily return, if you bought a 950 SQ FT property in Georgetown the average monthly rental return is around RM2, 000.00 per month with partial furnishing up to RM3, 500.00 for fully furnish. If you have 10 properties rented out it will be around RM20, 000.00 per month.

4) Property Equity Building

In the past people keep thinking of saving money to build their asset and have cash to go through bad times. If we were taking mortgage loan for our house and we made monthly instalment to the bank, slowly and surely the loan will be paid off and the house will be completely loan free. It is building equity in properties or more like saving slowly in bank but we can get the house in the end. Not to forget that the price will increase due to capital appreciation and we can get cash flow for renting out as well.

5) Limited Supply of Land

In the fast moving era as of today everything could be produced in a short time and even the construction of properties become faster and easier with technology advancement. But, there is one thing that could not be produced at the moment, which is earth or lands. Thus, once the land had been fully utilized in the future it will become a scarcity and demand will be higher than supply and price will increase.

Anders Ong, an avid property investor working in property industry. 

Categories: Readers Column Tags:
  1. NG AIK PEI
    May 18th, 2018 at 11:22 | #1

    Good inspiration!

  2. The Ciputeh
    May 18th, 2018 at 12:27 | #2

    Great Reading
    Direct To The Point, Keep It Up.

  3. ray
    May 18th, 2018 at 14:33 | #3

    Hi Anders,

    What you said is true, but who doesn’t know your mum is a woman??? You’re just stating the obvious. The biggest issue in property now is they are all over-priced, meaning too expensive compared to buyers income (therefore loans get rejected), too expensive compared to rental income (you are effectively subsidising tenants), all of which make property buying not worth the money. Of course, what I just said is also the obvious, who doesn’t know your father is a man right? But somehow some people just refuse to face the facts, and keep saying rubbish to confuse buyers.

  4. SoonHeng
    May 18th, 2018 at 14:57 | #4

    @ray
    Hey Ray, dont rubbish ur non-sense. u think u might know all but does other people know more about property? maybe ur mum is dad and your dad is mum. U might as well use your time scroll facebook and being sad not able to buy properties.

  5. ray
    May 18th, 2018 at 16:20 | #5

    Refuse to face the facts. See what I mean….;)

  6. ray
    May 18th, 2018 at 16:22 | #6

    @SoonHeng,

    I am very interested to hear your views about the property market now. Cheers!

  7. ray
    May 18th, 2018 at 16:24 | #7

    Oh wow, no admin intervention/moderation on our comments. Live stream! I likey!

  8. NG AIK PEI
    May 18th, 2018 at 16:28 | #8

    @ray
    Hi Ray, don’t be upset, there has many opportunities than what you seen and what you knew in this market. Maybe you just see a part of the puzzle now, try to throw the thinking away, looking for more and learn more effective information , there is nothing impossible once you understand the whole picture. You can achieve it when you believed.

  9. ray
    May 18th, 2018 at 16:41 | #9

    @NG AIK PEI

    Sorry I might have given you guys the wrong impression given my limited english proficiency. I am actually not upset at all, and neither is the affordability of properties beyond my reach. In fact, I own multiple properties, bought at very reasonable prices. But I’d say the same thing, prices now are not reasonable yet. Property price has to stagnant for a few more years, workers’ income has to increase by way of increased productivity, developers have to stop building for a while, let some developers go bankrupt and close shop if possible.

  10. Obak
    May 19th, 2018 at 10:50 | #10

    @ray
    If I’d compare you to Opposition before May9 2018. When MO1 spoke, group of his supporters and him lived in denial.

    NG AIK PEI :
    Good inspiration!

    The Ciputeh :
    Great Reading
    Direct To The Point, Keep It Up.

    Then you are being bantai left to right. And I realise this portal belongs to property developers and sales. When consumers raised their fear over the property market. The feeback perceived negative and bad to those people rice bowl. Hence, these people must be eliminated. Either, you will be mocked or admin will block your post. I bet my post will get admin mooderated or being removed soon

  11. anders
    May 19th, 2018 at 23:49 | #11

    ray :
    Hi Anders,
    What you said is true, but who doesn’t know your mum is a woman??? You’re just stating the obvious. The biggest issue in property now is they are all over-priced, meaning too expensive compared to buyers income (therefore loans get rejected), too expensive compared to rental income (you are effectively subsidising tenants), all of which make property buying not worth the money. Of course, what I just said is also the obvious, who doesn’t know your father is a man right? But somehow some people just refuse to face the facts, and keep saying rubbish to confuse buyers.

    Hi Ray, thanks for the constructive feedback. In my humble opinion everyone have the right to voice out or express their dissatisfaction with current house pricing and etc. But, lets thanks to the founder of penangpropertytalk as we could get the latest property news in Penang. Thanks to the founder Ken.

    This article contribution is mean to educate and sharing ideas. Yes, the article I contributed is
    made real clear and obvious and made purposely simple to understand on “Why Buy/Invest Properties?” to educate younger generation and I do not expect any return. There is no intention of hard selling any property or confuse any buyers. :)

    To be honest, property market always have a few price category that is why we have Low Cost, Low Medium Cost, Affordable, Apartment, Condominium, Terrace, Semi-D, Bungalow, Villa, and etc. Every segment of property have their respective market of buyer and it’s more to matching the market to the property they could afford instead. Overprice only happen when we look at property we couldn’t afford and the main purpose of property is always to have a roof over our family so it will always worth the money to make sure our family are safe under one roof except buying for invest as it will be other way round. Sorry if my statement seems like bantai people left and right like Obak statements.

    Thanks @Ray hope to see you one day.

  12. ray
    May 21st, 2018 at 17:07 | #12

    Hi anders,

    No, your statement does not seem like bantai people left and right, I like your slow and gentle ways in fact. I think the founders of penangpropertytalk have done an exceptional job, bringing people and information (good & bad & the misleading) together around the topic of properties that come with reader comments, in which human greed is clearly evident during times of bullishness.

    As in your selfless contribution of educational articles with the intention of educating the younger generation, as I said, there is the good, bad and the misleading.

    I would consider points (1), (4) & (5) good, whereas (2) & (3) bad info as you highlighted the capital appreciation from year 2010 to 2013, but conveniently forgot to highlight the capital depreciation from year 2014 to 2018.

    Also in (3), you said “a 950 SQ FT property in Georgetown the average monthly rental return is around RM2, 000.00 per month…… If you have 10 properties rented out it will be around RM20, 000.00 per month.”, you again failed to mentioned that if the monthly mortgage payment is RM3000 for each property, you will be RM10k short every month.

    So when you jumbled up the good (1,4,5) and the bad (2,3), it becomes MISLEADING. Therefore, I am not sure if this is really “education”, or just another greed provoking campaign. I hope you don’t try to defend yourself with a “reader discretion” clause, definitely not in the name of “educating the younger generation”. Cheers!!

  13. anders
    May 22nd, 2018 at 02:22 | #13

    Hi Ray

    It must taken u awhile to draft and write this reply. I wouldn’t talk about human behavior its totally unique and different for everyone. Appreciate it.

    As for your perception on the point 2 and 3. I would say thank you for so much feedbacks.

    Firstly, the title had stated *Why Buy/Invest Properties?* I believe the article should follow suit the title. If I were to mention the depreciation. Then I shall change the title to *Pro and Con of Buy/Invest Properties?* *Why We Should Not Invest Property*. I can explain the con but I wanted to share the pro. Also, during bad times NOT every property depreciate in value. So dont mislead or frighten people whom are not familiar with property investment by telling people all property fall in values from 2014 to 2018. Cheers.

    For the third point (3) yes I didnt mentioned the mortgage amount but if you bought properties during 2008 to 2011 the mortgage is just around RM1.5k to RM2K. The best thing is u can even reno and furnish it for higher rental. It is how we set our property to earn more return. Please dont simply make an assumption as property investment is not 1 or 2 month show. It could take 1 to 5 years.

    If you think this as a greed provoking campaign. I have nothing to say as I am not sure what I can get from this sharing and I had nothing to defend as you had your own way of thinking. :)

    Lastly, I know you have your own point of view but… lets have the thinking of *The Glass is Half Full instead of Half Empty. It will helps a lot.

    Nice knowing you and thanks for sharing your kind feedbacks.

    May I know you more in person?

  14. Ok ok
    May 22nd, 2018 at 08:31 | #14

    Why buy? Because u can and like it.

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