What is the golden rule for profitable real estate investment?

What is the golden rule for profitable real estate investment?
What is the golden rule for profitable real estate investment?

Deposit.redaksinet.com – Getting into the real estate game has always been a proven way if you want to increase your fortune.

It is one of the few assets that will appreciate during boom times and safely hold its value (or at least have only a slight decline) during an economic downturn.

While there is no secret trick or special formula that you need to follow when it comes to choosing a good property that is profitable, it actually takes a lot to apply common sense.

We’ve put together a list of rules of thumb that apply the basics of ‘propenonomy’ for your reference.

Hopefully, you’ll gain the basic (but essential!) knowledge to find the most affordable home that fits your budget, while having the most room for capital appreciation.

Rule #1: Perception vs. Reality

Buying a home is one of the most important financial decisions a person will make in their life.

It is not recommended to make one based on mere perception, not all glitter is gold; It is wiser to do some due diligence on the property and its surroundings before putting down any money.

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There should always be a good driver of demand to help your investment appreciate in the future.

Some of these include educational institutions, nearby public transportation, excellent accessibility, several well-established facilities, as well as upcoming future developments.

Rule #2: Fully understand the current and future market situation

It seems that wherever you go now, you will hear talk of an impending housing bubble. However, there are facts and figures that seem to tell a completely different story.

While there has been an oversupply of high-end properties that the market can absorb in the medium term, the supply of affordable housing has been (for years) well below actual demand.

The 2018 Financial Stability Review by Bank Negara Malaysia (BNM) details how the supply of new affordable housing is still woefully unable to keep up with high demand.

This scenario then puts upward pressure on overall property prices.

This situation has subsequently led to an increasing number of unsold units (also known as “excess property”), including unfinished projects.

BNM also stated in a news report that for households earning an average income of RM5,228 (figures released from the Statistics Department’s Household Income and Expenditure Survey), affordable prices should be capped at RM282, 000.

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As for claims by other parties that the property is in the price range of RM300,000 to RM500. 000 was in the ‘affordable housing’ category, which BNM said was “inaccurate”.

Rule #3: Find Request Handler

A good developer will carefully build a project according to demand, as potential buyers who have done their homework will always ask about the demand factors that set them apart, before confirming a purchase.

Some examples of these factors include determining future infrastructure (such as high-speed rail).

There’s also Putrajaya Sentral (which HSR will be calling at), which is located almost in the middle of the Klang Valley’s southern corridor, and is poised to become another central transportation hub.

This will create long-term demand and eventually the surrounding property values ​​will see a rapid increase.

Rule #4: Identify the correct location

The point that all real estate experts talk about the most: the location! Highly accessible places are always recommended as mobility is something that cannot be taken for granted.

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Since property prices are related to the scarcity of developable land and the cost of land, it is not surprising that the southern corridor of the Klang Valley.

Like Semenyih and Bangi, they are now Next hotspots for developers and therefore investments.

Take, for example, Puchong. In 2006/2007 the area used to be a mud field with mostly industrial projects, seen as a ‘cheap’ destination with no chance of capital appreciation.

At that time, residential properties can be purchased for RM180 psf. But in less than 10 years, occupancy values ​​have increased tremendously.

Puchong has now become the new ‘PC in the South’, or seen as an extension of that.

In 2020 and beyond, the rest of the South corridor is expected to follow suit, becoming the next hotspot for those looking for highly profitable real estate investments.

It is also important to note that the top 20 Malaysian developers have now made their presence felt in medium and large cities in these locations.