Category: How To (5)

Woman Balancing Her Checkbook

The most important thing need to keep in mind when buying your first house is your affordable budget. This is because most important thing when come to buying a property is “Money”, rather “with house with cash” and “no house with cash”, are not “with house but no cash” or worst to worst is “no house no cash”. Everyone need to avoid buy a house and turn your status into a “with house but no cash”, that’s the reason why you need to understand how much you are able to afford.
Here is a simple formula to find out your property purchase budget:

 

property purchase budget = annual household income * (3-6 times) + rich dad rich mum financial support

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Property-Valuation1

  1. Be realistic and objective – don’t let your heart rule your head. This is business.
  2. Research your market – This is the cornerstone of understanding value. Take your time, talk to local agents, go to auctions and jump on the internet. Informed decisions pay off.
  3. Carry out a thorough inspection – measure the home’s dimensions, turn on the taps, look at the stumps and walk the boundary. Look for every positive and negative you can.
  4. Seek independent information – estimated projections on rising values and rentals from the organisation selling you the property are worthless. Seek actual information from local independent professionals and try to substantiate any information yourself.
  5. Position, position and what was the other thing? Never ignore the basics. If it’s on a train line or next to an arterial road, it will be trouble. Look at the surroundings.
  6. Compare like with like – try and find comparable as similar as possible to the subject. These will be your beacon.
  7. Think like a local – if everyone in the street wants lock up car accommodation, make sure your property doesn’t buck the trend.
  8. Watch for over capitalization – a half court tennis court may seem like a good idea, but unless the owner is raising a Tomic, most buyers will find it next to worthless. Be honest about what it really adds.
  9. Think land, dwelling, ancillaries – breaking down the property into its parts can help you see the whole.
  10. Use recent comparables – if you’re using sales from a year ago when the market was booming, you are relying on false evidence. Keep it current.

 

Investment-Property-300x211

So what should you do if you are young and thinking about investing in properties?

 

Do you ever ask yourself; should I be investing in property at all, and what can I expect to get from it? If it is the road to quick riches that you are seeking, then this is not the right path to take.

 

Yes, we have seen some huge run-up in prices over the years, and it is true that property prices, like the economy, tend to run in cycles. As such, we will obviously see more price increases in years to come, despite the current negative sentiment enveloping much of the globe.

 

There is a whole bunch of other factors pointing to future price increases too. In some cities, the lack of new building stock will keep the supply lower than it should be, yet the population continues to grow and so does demand. However, do not bet everything on this happening. Instead, expect to see, over a longer period of time, steady increases with plenty of troughs along the way as the economic cycle rises and falls.

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Property buying tips

Buying a property may be a most expensive product that every one going to purchase, so before you actually make such important decision, here are some of the guide line and tips that you may go through.

Make sure you visit the area where you plan to buy. It sounds obvious, but many people are pressured into buying at property shows before even setting foot in Malaysia. Don’t be seduced by promises of rising prices. Just because developers are raising the prices of new flats it does not mean there is a genuine market in second-hand properties. Indeed, they may actually be changing hands for substantially less money than off-plan ones

Talk to people who have already bought in the development or in the area to see if they are happy. Internet chatrooms can be a source of useful information — although bear in mind some contributors may have axes to grind.
Choose your property carefully. Be prepared to pay a little more to buy a flat on the beachfront or in a better location. It will hold its value better and be far easier to let than a property in the middle of nowhere

Beware of so-called ‘rental guarantees’. Be sure of who is making the guarantee and what you can do if they don’t honour it. Some unscrupulous developers will offer a 10% return for the first few years to make the property look more attractive — and will have simply inflated the sale price accordingly. Some developers even offer ‘rental guarantees’ for up to 13 years at 8% and you need to be aware that these offers cannot make sense for anyone except the developer.

See the check list below:

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Step Action
1 As the buyer, you have to find the property. After you have made your decision, you are required to fill in an application form prepared by the broker and pay the booking fee (min 2% or more). A receipt will be given to you after you pay the booking fee. If you, as the buyer go back on your word, the seller has the right to confiscate the booking fee. Otherwise, the seller has to double pay the booking fee to you if he or she goes back on his or her word.
2 You have two choices:1: You provide the financial documents to the broker. They will assess your credit, income and assets to quickly determine what loans you qualify for.2: You provide any relevant details and financial documents to the broker.The buyer has to prepare his or her identity card and deposit. The broker will hand over seller’s detail, buyer’s detail and title to the lawyer for preparing the Sell & Purchase Agreement. The deposit will be handed to the seller only after both parties (seller and buyer) have signed the Sell & Purchase Agreement.
3 All the relevant financial documents will attach to the application form and submit to the bank for approval.
4 After 7 days, as the bank reply the approval, loan will be processed and an offer letter will be prepared. The buyer needs to sign the offer letter.
5 Before signing the Sell & Purchase Agreement, both parties can decide the date of settling the rest of the deposit. Normally, the buyer is given three months for settling the rest of the deposit. The buyer can request the seller to extend for one month. However, within this one month, the buyer has to pay the interest that is calculated per day. The amount of the deposit depends on the amount of the loan. For example, if you loan 70%, you are required to settle 30% deposit within three months.
6 The buyer will hand over the deposit to the lawyer for settling the ransom from the bank or financial company and property tax in order to redeem the property. Then the process of transfer can be carried on.
7 As the property is being redeem and the seller has settled the property tax, the lawyer will submit the transfer form to the Land Service for registration. If the transfer form is approved, the lawyer will hand over the rest of the deposit to the seller. At the same time, the seller has to pass the right of the property to the buyer as final realize.