Many say they want to buy a home. Many say they want an affordable dream home. Many could describe their dream home. Many say even affordable is still not affordable. Many say the problem is not them, it’s the banks who refuse to lend them what they wanted. Truth is, many are still without a home because many did not do something in order to buy an affordable home. What could we do if we really are serious about buying an affordable home? I offer to you 7 important things to start doing today.
#1 – How much is affordable for you. We need to understand how much is affordable to us because everyone’s definition of affordability could be vastly different! As a general benchmark, the mortgage repayment per month should be 35% of your monthly net pay. If we earn RM5,000 per month, then the maximum repayment should just be RM1,750. What is the price of the home which we could afford with RM1,750? Looking at calculator.com.my that amount is around RM450,000.
#2 – Have you saved enough downpayment? It’s always good to be ready with this part, whether or not we intend to buy today, tomorrow or next year. Just remember that planting that tree is needed today whether or not we intend to eat the fruits in the future. The reason is because if we suddenly wanted to eat the fruits, it’s impossible to plant a fruit tree and have the fruits tomorrow!
Are you saving every month? Have you ensure this particular savings is NOT accessible for you to use to buy some other unnecessary stuffs? Downpayment is usually the hardest and this is the reason why many people say, ‘just rent lah, it’s cheaper.’ Truth is, they just do not have the downpayment and they have also forgotten that paying rental is forever. That expensive mortgage usually has an end date. Think seriously.
#3 – Do you really want to buy? Being able to afford is a great feeling. However, think really carefully if you really want to buy. If we do not think the current company is the one we will be working for a long time and we may not know where would we go next, perhaps it’s better to keep renting for a while more. If our rental for that home is super low because the owner is under pressure from many competing units, I do think it may be worth to continue renting for a while more. There are definitely other reasons and if those reasons are strong, there is really no need to buy even if they say there are campaigns or exemptions. Stay focused on what matters more.
#4 Have you understood what you really need? If that affordable home you are eyeing is because your good friend is buying, please understand that your good friend would have his reasons. Are your reasons same as his? Close to office? Close to wife’s office? Close to the favourite mall? Right next to the mother-in-law’s home? There has to be reasons which is yours and yours only. By the way, it can be as simple as when I step into the house, it gives me the feeling of home sweet home. Just need to understand what you really need prior to deciding.
#5 Are you sure it’s not overpriced? If that affordable home that you are eyeing is because the discount is very attractive, please do some due diligence. If it’s a new property, who’s the developer? If it’s secondary property, have you inspected it well? if it’s from the auction market, have you at least try and see if everything looks okay enough? Driven there at night to see if there are lights? If still occupied, it will take some time to remove them. Get to know real reasons why is it so cheap?
Have you driven around the area in the morning, afternoon and even evening. If you have no time, then use google map for an initial understanding. Remember, when it’s overpriced, you need to be ready to hold and that’s not such a great strategy.
#6 Have you compared enough? Long time ago, there were very few projects to choose from. It’s either you buy it or you have to wait for the next one. These days, there are too many choices to choose from. These days, as you scroll your FB page, you will see advertisements after advertisements. All pitching that theirs is the best. Truth is, we will become very objective once we really compare a few projects.
In fact we will now be considered an expert of affordable homes if we have looked through say 10 and know what’s good, what’s bad between all the 10. Decision would then come easy and the potential risks have been minimised too. Just remember that there’s no such thing as zero-risk yeah.
#7 Learn from advanced property markets. Let’s just look at a few recent articles. UK: Home prices are still surging and likely to continue. We should not just look at the UK and decide. United States: House prices accelerate due to positive sentiments. Closer to home, Australia: Melbourne median home prices passes AUD1 million for the first time. (Used to be just Sydney). Or the one next to us? Singapore: Private home prices beat estimates. Will rise 3.3% in Q1 2021. Or let’s look at Canada which is seldom on our radar for property? Canada: Young Canadians home ownership dreams dashed as house prices soar
I do hope everyone realised that home prices do not need to rise due to speculation. Even if it rises following inflation and inflation is just 2% per year, that RM500,000 home will be RM510,000 next year. How many of us can save RM10,000 every year? This is why property has always been known to be a hedge against inflation.
All the best and keep reading kopiandproperty.my We are not part of any property developer, not part of any real estate agency and not part of any banks. Cheers.
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