Everyone should HATE property investment because of these 4 reasons
I have many friends who hate property investment. They will tell me they will buy a property soon but they never did. So, even though they say they like property investment, I know that they actually hate property investment.
Property selling is all over the place (means many are desperate?)
There’s too many people trying to sell me properties these days. It’s on my Facebook wall, it’s in SMSes, it’s in emails and more. Moving on, some advertisements say it’s the final few units. As usual, some of these FB Live talks, the property speaker will also tell me that this is the best time to buy.
One funny speaker even said that best time passed long time ago. It is just the second best time today because the best time to buy was 20 years ago when the property prices were just too low. Then again, salary then was low too. Who knows, the second best time to buy may repeat itself 20 years down the road from today! So, is property investment really an investment?
The below would be four reasons why everyone should HATE property investment. (Haha.. Happy reading!)
#1 – Too easy, it’s risky
You see, when it comes to property investment, one is able to leverage. A property which is RM500,000 means a downpayment of just RM50,000. Worst still, the actual amount paid to the bank after 30 years may easily be double or higher. Wow, this is just too much. Too huge risk to the buyer!
Fortunately though the banks do not simply lend to anyone who wants to buy a property. Besides, as long as we bought some decent property, we will enjoy capital appreciation. By the way, the property prices increase is based on the overall price of RM500,000 and not our downpayment of RM50,000. This does not make financial sense!
The property price should just increase based on our down-payment, else, the the owner may get good returns! So, everyone should just invest in everything else other than property, especially those investments which does NOT give us leverage. We get returns based on only actual amount we invested. 🙂
#2 – Easy to be cheated
An ex-colleague bought her second property 1 month after I gave a Property Investment 101 sharing in our company. How could she follow what I said so easily??!! A close friend bought 2nd, 3rd and I have lost count of the number of properties after he had a conversation with me of many hours.
There are also those launchings of a few hundred units of landed properties that was nearly fully booked. I mean during the times when we could go to sales galleries. All these buyers must be thinking that buying a house is like buying vegetable or fish in the market?
Why are these people so easily influenced to buy a property? Don’t they know that when a housing bubble bursts, their home prices will drop? Okay, I have no idea when the bubble will burst. I think I also do not want to keep harping on the fact that property prices do rise again after the crisis. (PRETEND you did not see this last sentence)
#3 – Who says everyone gets rich from property?
Think really carefully. Some people who got rich from property, they will tell you. Some people who bought the WRONG property and they lost money, they will not tell you. (Yes, WRONG property…). So, I definitely think there are people who lost money! By the way, it’s the same as people who invested into something and lost money, they also won’t tell you but if they got rich, they will show you.
Statistically, property prices over the past 26 years in Malaysia for example still showed an average home price increase. How can this happen…?
Oh yeah, just wanted to also share that most high-net-worth individuals usually have property investment as part of their portfolio. 40% or more to be exact (click to read). I am sure this is just to show that they are rich and not because property investment gives good returns.
#4 – It takes TOO LONG.
Property investors like Charles Tan of kopiandproperty.my tells me that I should not buy a property if I am thinking about flipping for huge profits in 1-2 years. This is absurd! If I have invested in that XXXX scheme or that XXXX metal, the prices have gone up in days or weeks.
This property investment takes years! In fact it took months for the transaction to be completed and when I need to sell, it takes another few months! If I COULD IDENTIFY for sure which stock in the share market to buy, I would have gained returns much faster. As for which stock will surely rise, can some readers give me some tips? I am equally scared the stock price may drop after I buy. 🙂
Conclusion
There are actually ever more reasons why investing in property is not the best decision ever in our lives. In fact, we should just forget about diversification in investment and forget about property or real estate. Maybe we should just follow the majority. Just enjoy our salary and spend it all on things we like because as you know, enjoyment must be now. There are 8.8 sale, 9.9 sale, 10.10 sale and recently 11.11 sale! 🙂
We should not invest, wait until we have more wealth and spend later…?
Immediately, I must show to my peers that I drive a slightly better car than them. I hate it if I am the only one with an old smartphone while everyone else is using the latest smartphones. Make me lose face loh.
If after reading these you are still interested with property investment, then sign up for an article a day at kopiandproperty.my yeah. Else, it is perfectly okay too. It’s your life and your money. Do whatever you like about it. Happy investing into whatever you love to invest as long as you are happy. I love property investment but please evaluate carefully before buying yeah.
first written on 5 July 2018, edited 9th Aug 2021.
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