StarProperty.my and Propwall.my held a forum for first-time home buyers at Tropicana Metropark Property Gallery recently. One of the speakers was Alexander Woo, and he presented “Important must-know basics of property investment”.
Woo speaking on the topic ‘Important mustknow basics of property investment’ at last Saturday’s forum.
Buying a property is not as simple or as easy as ABC’s. In order to be successful in property investment, you should do plenty of research to get substantial amount of information and also find a sensible investment strategy to adopt.
Woo touched on four basic points that first-time investors should know to understand the way around property investment.
1. Why invest in real estate?Investing in real estate is beneficial compared to many other investments because it is a way to hedge against inflation. Property investment is considered as one of the best ways to grow wealth and leverage to purchase more property.
“If you compare between buying, holding and selling your real estate, you make money when you hold the real estate.
“This can happen in two ways, through capital appreciation and rental income. Capital appreciation ensure increase in property value over time, whereas monthly rental can help with the mortgage and side income,” Woo explained.
2. Get updates on current issuesSome might not be aware of this, but certain current issues that are happening in the country can affect a property’s market value. Depending on the issue, it can either increase or decrease the property’s value.
According to Woo, the current issues that property investors should be on the lookout for are political stability, real estate bubble (also known as property bubble or housing bubble), depreciation of the ringgit (RM), bank rules on mortgage loan, government curbs and also the implementation of Goods and Services Tax (GST).
Another thing to note are the features that should be considered before purchasing a property, such as affordability, infrastructure, distance, security, maturity, as well as the return on investment (ROI) and future growth.
3. Be aware of pitfalls as an investorWitnessing a high return on property investment could make one eager to buy without careful planning, research and preparation.
Woo shared five pitfalls and mistakes that some investors have made which are:
- blindly following trends just because you see friends and relative buying property
- not paying attention to the absolute price versus psf value
- imposing own value on property
- buying during bad times or without a good deal
- buying even though the property is not within budget
4. Think like a savvy investorInvesting in property is not just about money-making, but also about having the right mentality to make savvy investment decisions.
Bear in mind that property investment is not a decision to be made on impulse. When it comes to making profit like savvy investors, make sure that you are familiar with the “Triple F” concept: Finder, Financer and Funder. Having all these three could increase the probability of you securing a good property deal.
One of the most important things in property investment is to know the necessities in order to build a solid investment strategy. Woo shared that even after three unsuccessful attempts at purchasing property, he never gave up. He continued with his investment plan and managed to purchase his very first property at age 20.
“It is important to learn and understand the game of investing in property, and to maintain objectivity. You also have to make sure that the property that you buy is always below market value,” Woo said.
About Alexander WooAlexander Woo is currently the chief executive officer of VIVO Capital Sdn Bhd, director of IQI risk management Sdn Bhd and vice president of financial education for IQI holdings.
He majored in Psychology, but has always had a keen interest in business. He started doing property investment as a part-time job when he realised that he was making more profit than earning a monthly salary.
Inspired by his late father, who has a successful business at a young age, Woo tendered his resignation at the age of 27 to make property investment as a full-time job.
He said that he is lucky to have an aunt who is a Real Estate Negotiator because she has been guiding and helping him in making the right investment decisions.
Property wise, he prefers to invest in high-rise developments because it usually cost lower than landed property, and also because it makes quite good rental income.
For more information on
Building and Construction event, please visit www.asiapacificevents.com
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