Buying in the Secondary Market
Beyond new property launches, there is also the vibrant secondary property market. In fact, the secondary market makes up the majority of property transactions. As someone who has purchased from both the developers as well as owners, let me share that both do have their advantages. Today, let's focus on the secondary market.
Time. If you need a property that you could move in sooner rather than later, then the secondary property market fits the bill. Renting a place will make the owner richer. Buying a place would make you richer instead, even if not in the medium term. In fact, in many cases, when it comes to secondary properties, it is possible to negotiate with the owner for access to the property earlier so that your renovation planning can start sooner. Yes, as an owner, I have granted this flexibility before as long as all the documentations are already completed and I have confidence with the buyer.
Price. There are bargains in the secondary property market. A close friend managed to buy a condo unit near KLCC for RM100,000 below the usual market price. The reason? She was keeping an eye on the development EVERYDAY and she called the real estate negotiator within 5 minutes of the advert being released by the owner. Why was it RM100,000 below the market price? The owner was moving back to Hong Kong and did not want to wait for other buyers. The idea of getting into more negotiations wasn't appealing and the owner didn't want the hassle.
Choices. Let's be savvy about this fact. The number of new launches can never beat the number of available secondary units. Choose the area you like, drive around and even explore the neighbourhoods next door. Understanding all the different choices, putting them down into Microsoft Excel helps too. Plenty of times, people miss out on good deals with low prices simply because they are too pre-occupied with the usual few hotspots.
Have a look at what you want to buy before you buy. You can view the actual unit. You can chat with your potential neighbours. You can touch the actual walls and walk around a bit. You can even negotiate for a lower price if there are issues and things which are really not working. You can also drive around the area in the morning and in the evening to know what the dynamics are. Last but not least, you can read reviews online for the good, the bad and the ugly.
Beyond just the usual advantages, however, do note that secondary properties may also mean some renovations are necessary. You may not like what the previous owner has done to the unit. Be reminded that you can change it! That's the reason why higher renovation costs may not correspond to higher property prices when the owner wants to sell in the future.
Secondary units may not evoke emotions comparable to owning a new place complete with a new coat of paint, fully functioning facilities and even the excitement of meeting new neighbours, equally excited, who bought the unit next to yours. Normally one may share a lot more in common with these new neighbours versus moving into a new area where the people have been staying there for the past 10 years, with you being the â€˜newbie' to the area. It does take a bit more time to get to know everyone.
The most important thing is that you love what you buy. To love what you buy, you need to get to know what you buy. To get to know what you buy, it is important to view, view and view before buying. Property investment starts from the second market onwards. Buy your first one, enjoy it and perhaps upgrade in the near future. For those with kids, it is even more important to hedge for their future with property investments. Whether it's secondary or new ones, I wish you happy buying.