designing life

To invest or not in the property

There are many saying that investing in property is always a good move.  The price of the land or building is increasing always though out the year.  This saying could be 99% correct if we bought the property 50 year ago.  Nowadays, you need to take care in buying property.  The high price in the city area is somehow a little bit saturated.   Though that the price is increasing, it increases slowly.  Also, when you want to sell, it will not be easy because of the high monetary value.

This slowly increase in price, for me, is not good choice of investing.  We even experience the opportunity loss with our money that can be put in other type of investments.  Not to mention that if the property is just sit still with nobody is renting it.  You just need to pay expenses instead of giving you additional income.

From my personal experience, especially with smaller budget.  I’d like to do the following when choosing property to invest.

1. Find smaller property in the border of the city.  Since my budget is limited, I would like to find these kind of investment.  However, when I have more money, I still find these kind of properties.  Why?  These kind of properties will be easy to sell.  Let’s face it, in a country, the number of middle and low class are always much higher than higher class.  And most middle and low class would like to buy a house for settlement. This could  be my market in the future.

2. Find properties that are currently being rented.  This could be quite a work.  Why somebody wants to sell a property that is giving him/her a passive income.  Well, that’s life… someone has a reason, either he/she wants to move to another city or other reasons.  My rule of thumb is that the property should be able to give me a net return from rental pay as much as 1% from the money that I spent for that property.

In the end, my strategy could be different with yours.  Let’s share it!

This entry was posted on Sunday, June 1st, 2008 at 5:01 pm and is filed under what i think. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.