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 can property really a choice of investment?, think about it/

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b00n
post Jul 18 2007, 03:24 PM

delusional
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I never really agree that property investment is a real good investment if it's buy and sell transactions.
We have to remember only if we sell than we'll get the profit. You have to remember the "IF".
Renting, yes; but profit would only come after you've sell it off. Rental income only helps you cover the maintenance of the property. Hardly theres cases whereby rental income can really cover everything and generates net profit.
That's only my POV.
Usually it's only speculations that a property that's being bought would appreciate by so much; but before that speculation is being fulfilled, it's a liability.
b00n
post Jul 19 2007, 09:47 AM

delusional
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Again, may I remind you that you're planning to rent out the 2nd and 3rd property that you had joined name with your brother and wife. Also, you mentioned that you knew that in-order to earn; basically you'll need the rental to be enough to cover your installment and other maintenance.
This would be the speculation risk that I talked about.
1st Property that you had is basically quite secured for now.
2nd and 3rd property which had you giving out monthly commitment of RM1700 servicing loans i.e. RM1400 (you and your brother) and RM2000 (you and your wife). Meaning to say for your second property you need a rental income of RM1400 and RM2000 for your 3rd property.

Again on loans for the 4th property, you have to understand that banks doesn't treat rental income as your income. It would only treat the 1st 3 properties as your liability. Take into the accounts of your commitments i.e. RM1700+RM850 (1st property) which leaves you around RM1400 if you're earning RM4000. With joint apps with your wife assuming your wife is also earning RM400 would gives you RM8000 with total commitment of RM3550 altogether. General rule of thumbs is that the loan servicing part should be no more than 1/3 of the income but this is already half. Not sure the bank's going to lend you the money or not.
It would eventually turned into a very risky business when you can't really manage your properties which you've acknowledge Dreamer's comment.

Again, how old are you waiting or how many years are you waiting to dispose off your properties? It's generally not advisable to be holding more than you can manage. I would advice 2 or 3 is good enough whereby 1 is for own stay now and 1 or 2 for rental income that's enough to cover your loan payment and maybe more to cover other maintenance.

Also I would say that properties are not cash. In order to turn properties into cash, you need to sell it off. Selling also includes cash to be paid (not fair right...blood sucking lawyers); and it could oftenly take up to 2-6 months for disposal. Thus when you're in dire strait for cash....good luck!

Better keep some cash for the rainy days instead of just focusing on the future.
b00n
post Jul 19 2007, 12:07 PM

delusional
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Books give lots of information that's non-debatable.
But how you use the knowledge in books is how you excel in life.
I see ppl condemning certain books saying that the strategy doesn't worked or whatsoever. However, they never really understand that one that works for a person might not really work out for the other.
b00n
post Jul 19 2007, 02:15 PM

delusional
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wcwroger, good if you've planned.
Just that by looking at your comments on your investment, everyone is like worrying for you; thus our comments and advice.
Good luck to you.

 

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