L ♥ I's Stories: Why You Should Invest in Properties ?

Why You Should Invest in Properties ?

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October 28, 2018

Why You Should Invest in Properties ?


Property investment may seems to require patience and analytical when making decisions. But, as time goes by the property value may gain with a surprising value. There is a saying that even when you sleep, you can sleep well knowing your property investment is not only earning money but increasing your value too. While the older generations prefer to invest in shop lots or commercial developments, the younger generation opts for residential property, especially condominiums or apartments like the Casa Tropicana. Here are some of the reasons why investors prefer to invest in properties.

Leverage

Property investment has the flexibility to give you control your investment with small amount of money that you can borrow money easily from a bank by using property you are going to purchase as collateral. It may be difficult to borrow money for starting up new business that does not have track record or proven experience of business owner. Unless you have a good business plan, most banks will not lend you money.

You may buy shares as collateral but share cannot hedge against another share effectively because the share price movements are parallel, if majority of the share markets going down, the share that you invested most likely go down. Thus, the riskiness investing in shares is high and volatile.
Property not only relatively easier to get financing yet it is also less risky if there’s rental income. For example, if you have RM10, 000 that serves as your down payment and for the remaining RM90,000 you can borrow easily from the bank. If your property is leased out and your monthly rental income is more than your monthly loan repayment, you should not be worry about. You can go here to check your affordability.

Extra income

Nobody would say no to extra money especially when you have bought the most profitable property for investment. Property with good location and obedient renter usually yield a profitable return on time for you to pay your loan and bills. You may even have extra balance for yourself after paying all of your bills.Apart from that, selling your property to earn capital gain gives a handsome extra income. Imagine the sum that you earn, you could have actually used it for your next property investment down payment and roll your wealth continuously. When the price is right, do not hesitate to let go of the property and get your moolah. But, be aware of the real property gain tax (RPGT), you may check the rates from here.

Basic necessity

Shelter is one of the basic and vital needs we need in life to protect us and our loved ones. Imagine you and your loved ones living in Casa Tropicana with beautiful scenery from the balcony, lovely isn’t it? Besides, everyone needs a home to rest and live their life and investing in a residential property to lease out for those who need to reside for work purpose or relocation purpose, you can either gain rental income or capital gain from your investment.

Hedging inflation

Today you invest in a property at this price and the following year, the value increased to a significant amount as property price does not drop drastically over a day or two. Unlike stock market, though with abundant information to help with decision making in investment but you will never know what might happen every second during the trading hours. However, property can be insured and still be in safe condition, after all, property prices movement is stable and the movement is measured in years. Besides, it is always good to use property to hedge against inflation.

Increase net worth

How do you increase your net worth? Well, by investing certain assets to increase your personal net worth; assets like property can elevate your personal net worth. You’ll be either enjoying positive capital gain or receiving rental income, refer to the earlier on gaining extra income. On the other hand, if you take up loans that spent on items that do not appreciate over time, like automobile, not only the depreciation rates are high but there are rarely with returns. The loans for residential or commercial properties that will appreciate in longer period can be labeled as good debt. Meanwhile, for cars and credit cards, those do not generate future value and it is considered as bad debts.  



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