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Property investment: Is it for you?

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By : Eshkarvin Kenezer    99 or more times read
Google the phrase 'property investment' and you will probably be bombarded with 10 million or more search results offering you advice on how to get rich quick through real estate investments, the types of properties to snap up and numerous fail safe steps to retire young and loaded via properties. With so many people going into real estate and reporting on the great earnings they get in return, one would wonder if channeling hard earned money into buying and selling bricks is the best way to go. Hopefully, with this brief on the current property market in Malaysia as well as the dos and don'ts of property investment, you would be more confident in getting your hands onto your first investment, or not.

What is Malaysia's property market like?

To objectively determine this, we need to go back to a decade or so, prior to the Asian economic crash in '97. In the early '90s, Malaysia was a hotbed of growth with a flourishing economy that was resonant throughout the real estate sector. New developments mushroomed throughout the country and more so in the country's capital and its surrounding areas. The market then regressed following the crash, but has been magnificently recovering since then, albeit at a slower pace.

Sources from the Global Property Guide reported that the sector has even achieved an increase of 6.9% in property prices in 2006! This year, 2011, the Malaysian Institute of Economic Research (MIER) has predicted a further growth in Malaysia's economy, a welcomed result from the stimulus package, tax reliefs on housing loans and a low Base Lending Rate (BLR). On the whole, the property market currently has a rosy outlook and you could see your finances multiplying through property investment.

However, let's take a look at the things you need to consider:

The type of property

The type of property you are thinking of investing in, will have an effect on your investment in the long run. The rule of thumb is that condominium units will yield a higher return on rental, whereas landed properties will appreciate better in value. Although Malaysia's rental market is relatively small, nonetheless, the rental of luxury condominiums in central Kuala Lumpur and other upmarket areas are seeing a lucrative inflow due to the high demand by expatriates and businessmen.

On the other hand, it might also be worth mentioning that the market is seeing an over-supply of luxury condominiums at the moment. At the end of 2010, over 65,000 units remain unsold, according to Global Property Guide, but this figure is predicted to fall in the subsequent years.

Location, location, location

The whereabouts of the property you are planning to invest in will largely determine your returns. Obviously, a condominium unit in the suburbs up north would give you a lower yield than an apartment in the city center. Even if you don't have wads of cash to get your hands on that luxury condominium beside KLCC, try opting for a modest apartment unit somewhere in Petaling Jaya or even a landed property in the Puchong area.

Learn from the gurus

If you know someone who is successful in the real estate business, try buying him or her a cup of coffee and ask about their experiences - all the how, when, what and whys of property investment. Your own little investment of $5.00 for a hot cappuccino may blossom into a steady cash flow a little further down the road.

The bottom line

At the end of the day, it is you who will make the ultimate decision of whether it is worth participating in the property market. Your financial situation and expectations may be completely different to John's circumstances. But by all means, thoroughly research, compare and learn all you can before making up your mind to take the plunge... or not. If you do, it may be one of the best decisions you will make in your lifetime! The choice belongs to you.
Eshkarvin Kenezer is an avid property investor. He executes well thought out strategic moves by buying and selling high end condominiums to the right people at the right time. He owns multiple property websites such as the Malaysia Condominium website, which is a huge condominium portal connecting real estate agents, buyers, and sellers across Malaysia.

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