Are you an aspiring property investor new to the world of property development? Choosing the right one to invest in must be a daunting task to newcomers. With all the new jargon to learn and information to take in, how can one become a guru in property investment?
Well, we’re not sure if we can turn you into a guru overnight but we certainly can offer some insights for those aspiring to own some properties.
Tip 1: Do your research
Sun Zi says “Know your enemy, know yourself and you will win a thousand battles.” This is also true in the field of property development. Research in the features of your properties, in terms of attractiveness, completion period and quantum, developer heading the project, everything you can get your hands on! At the same time, know your finances well and how deep is your own pocket.
Do not overstretch and make sure to get recommendation from your property representative for a good banker to serve you. As long as you buffer some emergency funds and able to ride through if interest rate goes up or any slight price corrections after the project’s Temporary Occupational Period (TOP), your asset will likely turn profitable over time. However, unlike stocks or trading instruments, properties is often more illiquid in nature and takes more time to realise the capital appreciation with some exceptions like we had seen from 2009 – 2013 where property prices had soared immensely.
Tip 2: Personally visit the showflat yourself
With the magic of the internet age, we can now buy things at a click of a button and contact anyone we want and receive a reply almost instantly.
However, when it comes to property purchase, it is a big ticket item for many, there is no better way than to visit the showflat yourself, talking to the salesperson representivemarketing the project to have better understanding on the development and ask questions such as:
• Name of the Developer for the project
• TOP period (some projects indicate 5 years), amenities, land size
• Number of units, how many 1-bedders, or 3-bedders, dual keys, etc
• Lease tenure: 60 years, 99 years, 999 years or Freehold
• Materials for the interiors used by the Developer
• Future development in the surrounding plots planned by URA like any commercial plots, MRTs, sports facilities, or future vision of the nearby estate
• Indicative pricing compared to existing or new projects in the same district
If after careful evaluation, you are still keen to make the purchase, be sure to submit a purchaser form (with a blank cheque) to secure your ballot chance. There is absolutely no penalty in the event if you decide to pull out on the balloting date but if you did not do so, then you might loose the chance to select your choice unit!
Tip 3: Don’t be pressurized to make the purchase
Patience is a virtue. When you visit the showflat, you might be pressured to leave with a new purchase in order to feel like your time has not been wasted. But remember, the goal is not just to buy a property for the sake of buying it, it is to buy a suitable unit with intrinsic potential for capital appreciation based on the location coupled with any future development plans in store by URA. Therefore, take your time to scout out a good project and once you find the right one, it is time to make the move!
There is also a stark difference between buying for your own stay and for investment purpose.
For your own stay, it is rather essential to buy one with a better facing, example pool view or garden view or higher floors though price might be higher for such premium stacks.
However, for aspiring property investors, cost might be a more important factor than unit’s facing as typically, investors would want to maximize the Return On Investment or ROI based on rental yield. And since it is for rental, the tenants may be staying only for a couple of years, hence, most might also not be as particular in terms of the unit’s facing and likely would go for the amenities or location.
Hope you enjoyed reading these tips.
Take your first step to invest in a property and likely, you will be on the route to become a guru property investor yourself in the arena!
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