By Charles Tan
Articles with titles such as “Top 10 hotspots to look out for” should not be taken too seriously. And here’s why – if the writer of that article was also an investor and had knowledge of those hotspots, why would he or she share that precious information with the world?
It’s tough to argue that the writer wants the world to benefit. Perhaps the writer has some other motives instead?
Anyway, even if you often read such articles, does it mean you would now buy anything within those hotspots at a whim? Get real. So-called hotspots already carry a big price tag by the time you intend to buy, else it would be called “undiscovered warmspots”, for lack of a better term.
Different people will hold different views about which areas are profitable and which are not, depending on how much each profited (or not) when buying properties in different spots.
So, who’s right? Well, it boils down to what kind of property was bought and the many valid reasons why that property was bought in the first place.
If it’s for purposes of rental, then it’s foolish to buy in places where not many people want to rent, no matter how cheap the property price is. You should instead buy a piece of property in developments favoured by many, especially working people.
For example, a colleague placed a deposit to buy a secondary condominium for RM730,000 (560 per sq ft). It promised good rental and was within walking distance of an LRT station.
He said that if it was for himself, he would have preferred landed property, even if the development was slightly further away. See the huge difference between deciding only for investment purposes versus for one’s own stay?
Another colleague’s brother is doing very well with property investments because he focusses only on property best suited for student accommodation. As they say, education is a recession-proof business. In fact, when some people are retrenched, they further their studies.
Each of the property investors above are buying based on the end goal. Their intention matters the most. None are buying simply because they have read an article about the various property hotspots around.
Always note that even during boom periods, there are still people who get cheated when buying property in the wrong kinds of projects, or as a result of paying too much because everyone else was “crazy” during those times.
It’s best to buy during downturns because sellers are slightly more “sane” then. Besides, buyers too are more cautious during these times and are able to evaluate the value of a property more objectively.
Always remember, understand “why” you want to purchase a property, and do not buy simply because others are shouting, “Buy!”
This article first appeared in kopiandproperty.com
Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.