It depends on individual situation. If buying a house then become highly leverage or having serious cashflow problem then start with renting would be a better choice. Only buy when have sufficient fund and cashflow in healthy situation, don't need to rush on it.

Even though properties price generally goes up over long term partly due to inflation, if you calculated carefully, sometimes the return rate may just almost as same as putting money in FD after deducting the cost of ownership of a house (like paying legal fee, assessment, repairing, maintenance fee for apartment type etc)

Bare in mind, putting money in FD, the total amount of FD also going up every year.

Don't get me wrong, I didn't say putting moeny in FD is wise or not. Just you need to make the return rate comparison and the risk you are taking. Even the house price can increase over long term but if the price appreciation can't even match others alternative that are lower risk, it is not worth to buy the property.

Property price can go down one, typically and best example recently would be US real estate market currently.

A lot of people look at the property price at initial buying price then look at the sold price afterwards to make comparison eg. one bought a property Rm100K, 20 years later sold the property at 200K. On paper, it looks very good a 100% gain but if you annualise it with compund interest, it might just giving out 3%+ compound interest rate.

So for above case, does this property make profit, yes, no doubt but it is poor compared to others.

Buying property doesn't mean it is good or not good for investment. Property price is about location and timing of your buy which if in favour then you pobably can make handsome profit from it but it is not necessity to be so, all are depend several factors, property location, economy situation etc.

This post has been edited by cherroy: Sep 26 2007, 08:29 PM