After the article on “10 common reasons why people don’t buy property” that was very well-received, the time seemed fitting to address the many pressing reasons why we should buy property in Malaysia.
So here goes…
1. It’s safe and real. Shelter is the first thing everyone needs based on Maslow’s hierarchy of needs. In brief, this is the foundation before we start thinking of other things.
Imagine getting a job within Greater KL but having no place to stay? While it is true that we do not need to BUY a property because there is the option to rent, consider this – someone had to buy that property in order for us to rent it from them, no?
2. It’s safer and easier. View a potential house, and be honest about whether you really like it. So too for the surrounding amenities. Check Google map for the duration of a drive from this property’s location to the office every morning. If you get three “likes”, you have already done sufficient due diligence about buying a home for your own stay.
It’s the same with investing in stocks. Understand the business… well. Get to know the management team…well. Know who their competitors are, know the industry and more… It’s not easy to buy a stock. Let’s not even start about commodities or cryptocurrencies.
3. Leverage. If you invest RM50,000 in the stock market and it rises by 10%, you’ve gained 10%. Invest RM50,000 into the property market (which is the 10% downpayment) and even if it gains just 5%, that’s RM500,000 x 5% up, which is RM25,000.
Your total investment was RM50,000. Your Return on Investment was thus RM25,000 which is 50%. Sounds unreal, just like a scam…
4. FORCED to save. In a good way, anyway. You buy an affordable place to stay as a start. A RM200,000 home with just a 2% increase in price every year will be RM500,000 30 years later.
It’s true, RM500,000 30 years later may not mean much but how else could you save RM500,000 if not forced, by property? By the way, the property price increase was 6.7% on average for the periods of 1990–2016 in Malaysia.
5. It will not suddenly lose half its value overnight. Be prepared for such an outcome in many other types of investments.
Remember a company called Enron? It was over US$90 and in a few months dropped to less than US$1 and in the end, was worth nearly nothing. Gold fluctuations? Oil fluctuations? It’s hard to control these but property, which is NOT a wrong buy, will usually be just fine.
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.