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Real Estate Investment: Secrets That Guarantees Success

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Buying real estate is about more than just finding a place to call home. Investing in real estate has become increasingly popular over the last few years and has become a common investment vehicle.

"Developments and construction do not make money. That's a fact. It's only when you start selling (your property) that you start making money”, said Colin Tan, Asean's renowned real estate analyst.

Delivering his paper, "Real Estate Investment: Secrets That Guarantees Success”, at SHAREDA's PropEX 2017, Colin commented that a smart developer would study on the consumer needs and see the demand before planning to build something that suits the community. Here are Colin's 5 secrets to success:

1. Timing, timing, timing
• 1976 – 1997: Singapore was still a developing country. In an emerging state, you can buy anytime and chances are your investment will appreciate.
• In a mature market, you have to watch what you buy. A mature market tends to go on a seesaw ride and plateau.
• When there's a little sign of "recovery”, that's when you should consider buying – this is applicable on a global, national and regional level.

2. Prices will NOT always go up
• Advancement in construction methods makes developments cheaper
• Land is not that scarce
• Most people's real income doesn't grow that fast to push prices
• Malaysia national price index remained cheap despite overcoming the crisis 2008, despite the subprime and Lehman crisis. Malaysia property market is matured.

3. Invest with governments
• Government penalises those who goes against and reward those who go along in terms of cooling measures, legislation etc.
• They are the single most powerful entity in any country. They can make things happen.
• They are also mostly the single most wealthy entity in most countries.

4. Invest in beauty
• A unit with a nice view with pretty architecture is important – it changes the price of the property
• Beautiful properties will generate more demand

5. Worst case scenario
• Can we service the loan if one of us loses our job in a few months?
• Can we service the loan if the unit is not rented out for a few months?
• Will we be forced to sell at the wrong time?
• Be careful of excessive rebates – greater risk of loan clawback


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