Did I mention that the Estate123 team had a really educational trip to Maspex 2015? Well, we sure did, and we’re here to share with you some of the things we learnt there. 🙂
I won’t bore you with a long, draggy introduction, because if you’re reading this, you probably already have a plan for investing your money in Malaysian property, or keen to gain some insight into property investment here. So let me present to you, 7 tips for property investors in Malaysia:
#1 – Buy when others are rushing to sell
In an uncertain economy and softened property market, many people sell off their properties as a way to minimize their loss and protect from further depreciation. If you have the ability to purchase properties when others are selling, this will be an advantage because there is room for negotiation and plenty of choice for you as a buyer.
Tip: 2015 and 2016 is expected to be a buyer’s market!
#2 – Sell when others are rushing to buy
Similar to #1, it’s simple economics: provide supply when there’s demand, and you’ll be sure to make a successful transaction. When many buyers are vying to purchase, you can easily find a buyer that is willing to agree to your price, or even offer a better deal than what you are asking for.
#3 – Adopt a long-term outlook
One mistake that property investors often commit is failing to adopt a long term outlook for their investments, instead preferring to use short term strategies like flipping properties to earn a quick buck. While there is no denying that doing so can prove lucrative in urban areas where property prices increase rapidly, the same cannot be applied to areas that have not yet fully matured but are full of potential. Besides that, the government is trying to curb such practices by implementing taxes such as the Real Property Gains Tax (RPGT) to ensure that buyers hold on to their properties for a certain amount of time before selling them.
#4 – Vary your portfolio
Savvy investors know that in order to avoid any potential risks arising from any single type of property, diversifying your portfolio is one of the most prudent and logical things to do. Therefore, your property investment portfolio should consist of properties from different categories or types. For example, if you are focused on low-end properties, consider investing in both residential and commercial real estate that suit your criteria.
Note: During his talk, MIEA vice president Lim Boon Ping advised investors to only purchase maximum one unit of affordable housing as part of their investment portfolio. This is because affordable housing units are primarily meant for those who really need it (e.g. first time buyers), and doing so is part of the social responsibility as good investors.
#5 – Location is important but it is NOT everything
The mantra of ‘Location, location, location‘ may be the heart of the real estate industry, but it has become increasingly apparent that location is not everything when buying or investing in property. That doesn’t mean that location is no longer important, but when it comes to rental properties, tenantability (the ability to find and/or retain a tenant) may be just as, or perhaps even more, important a factor. If there’s nobody to rent your property, you won’t be able to collect any rental yield or see any return on your investment, right?
#6 – Seek advice of a qualified REN
Thanks to all the news about fake real estate agents, it has become a legitimate concern for buyers and investors when it comes to dealing with agents regarding property transactions. Always seek the advice of a qualified real estate negotiator (REN) or agent to ensure you don’t become a victim of scams or frauds.
Tip: We teach you how to identify a licensed real estate negotiator!
#7 – Continuously study and research the market
As the saying goes, ‘live and learn’. Don’t become complacent and lazy if you want to succeed as an investor in the property industry, because the market situation today may not be the same tomorrow. You will have to constantly keep abreast with the latest news and research the market, especially during troubled times, which can help you to make decisions based on facts and figures.
For more investment tips, check out our Top Tips For Property Investment in Malaysia.
*This is a series of short articles from our Maspex 2015 Penang experience. Although the exhibition focuses on secondary property and its corresponding market, most (if not all) of the information here is applicable to the Malaysian property market within the proper context. We hope you find these articles helpful and interesting, regardless of whether you are a real estate agent, property investor, or just a member of the public trying to learn more about property and real estate in Malaysia.