Safe Way Property Investment

Safe Way Property Investment Image

Whether you are a first time Iskandar Johor Bahru property buyer or a real estate investor, the current uncertain economy climate has made us hesitate on purchasing a property. Today, I will try to give you some insight from a financial planning point of view, on how to invest in a “safe” way.

Basically, there are only 3 possible outcomes after you acquired a Property Iskandar Johor Bahru :

1 Rise in value / Appreciation
2. Depreciation
3. Price remain unchanged

Therefore, If you have done your homework and equipped with strategy to face this 3 possible outcomes, your investment risk can be minimized.

One of the critical elements in the scenarios above is “TIME’. Why? Take an example, after you made a deposit, the developer immediately introduced the second phase of the project on the following day, this time with selling price 15% higher than the existing phase which you have booked. Technically, that means you have made a return of 15% in merely a day. Excited, don’t you? What a catch, you thought.

In a different light, what if the project is completed now, and there is an unexpected economic down turn? After paying the deposit, you are now left with an empty pocket with an unoccupied property that has dropped 20% on market value, would you be disheartened with the news and concluded that you have made a “bad” investment?
Think this through, from the moment you paid the deposit to the time when the project is completed, what is your “Actual Gain” and “Actual loss”? Basically, “Gain and Loss” only happens when you perform a transaction to sell the property to a 3rd party buyer, you can work that out. For the speculator, he/she may face the risk of “Loss” in the investment because of his/her plan to “get rid” of the property as soon as the project is completed. Otherwise, the speculator may face some sort of financial issues especially on cash flow for keeping the property! But for all the other investors, or you simply planned to buy the property for your marriage, it really does not really matter what is the prevailing market price when project is completed, all you’d feel is excitement knowing that you’ll receive the house key!

Therefore, the 2 outcomes below will be the core elements when you decide to purchase or invest,
1. Set your objective clear! What do you want from the purchase? The purpose of purchase can be for own consumption, future income resources, legacy to next of kin and 5©

2. After the objective is clear, think about the strategies to apply when any of the 3 possible outcome falls on you
a) Property appreciated
b) Property depreciated
c)The price remains unchanged.

From the perspective of financial planning, I would like to share 8 important factors,

Healthy cash flow
Strong Capital
Assets portfolio
Clear Objective
Long term investment purpose
To generate income
Accumulate property through leverage property income
Avoid “unhealthy debt” in property investment

In conclusion, as long as all these points are in places, you are in the “safe zone” of Iskandar Malaysia property investment.