The decision to own property is a crucial one. You need to do some detailed research before you decide whether you're getting a good property deal or not. Attending a property forum is one of the best ways to get professional insights on property investment.
At a recent StarProperty.my Own It forum, organised by StarProperty.my and Propwall.my, one of the speakers, Alexander Woo, shared some basic but important points on his topic, "How to spot a good property deal and are you ready to purchase?".
Woo discussed four main points that could help in making the best decision when it comes to choosing the right property.
1. Realising the need
Everyone needs a place to stay. Once you realise that you need a roof of your own over your head, it becomes a necessity to look for a property. Regardless of whether you are buying or renting, you should look for a safe area with good security features, a good neighbourhood, a suitable property type and a convenient location.
2. Key research on property
It is important to always look at the surrounding areas, and not just base your decision on how the property looks. Woo expressed the "3P's" that you should research on when deciding to buy a property.
1. Past performance: Do a background check on the growth rates, rental rate and rent demand of the property and its neighbourhoods. Find out whether the property type and location is worth spending your money on.
2. Present competition: Has existing projects affected the property's value? Explore the surroundings, and don't be afraid to approach property experts to find more about an area.
3. Possibilities / potential: Analyse the potential of a property by looking at its future developments. Will upcoming developments influence the value of the property? Find out more about the future projects, infrastructure, schools, and other big developments that might increase the possibility of capital appreciation.
3. Buying vs renting
The answer to whether you should buy a house or keep on renting is not an easy one. Woo touched on basic things that you can consider before making a decision on whether to buy or rent a property.
"If you are staying only for a short while, still can't afford to buy, or are able to get a better investment, then it might be best for you to rent. On the other hand, if you are financially capable of paying for a house, planning to stay for a long time and could not find any other better investment, then it might be a good idea to buy," said Woo.
Another thing to note is that the initial cost for renting is lower than buying because when you rent, you will only need to fork out about 2.5 months of deposit. However, if you buy a property, you need to pay 10 per cent of the property's price as a downpayment, and plus some other fees.
4. Subsale or new property?
If you can afford to buy a property, should you go for a subsale unit or a new project?
If you are planning to buy a subsale unit, you could get a mortgage loan of up to 90 per cent, but you are also responsible for the additional cost, such as 3 per cent booking fees, 7 per cent upon SPA (Sales And Purchase Agreement), legal fees, valuation and stamp duty.
For a new project, you could also get a mortgage loan of up to 90 per cent, but depending on the developers, you might get a special package, such as free SPA and legal fees, cash rebates and special early bird discounts.
"Buying a new unit seems to be more advantageous compared to subsale, due to lower initial cost, less repairs, it might come with new furnishings, and has loan valuation that is taken care of.
"However, for a new project, you usually have to wait a few years for the completion before you can move into the unit," said Woo
The key to finding a good property deal is to know what you want and what you need. You are the one who has to decide whether you can buy or rent, know what you can afford and what property suits you and your budget best.
Whatever your decision might be, make sure you weigh the pros and cons so you don't make a wrong move.
Monday, Sep 07, 2015
The Star/Asia News Network