Is buying retirement home a good strategy for young couple?

Age 30. Total quota for house loan is around 4k/month (not exceeding 33% of household income).

Bought an apartment in KL. Left 2k quota. We actually plan to buy a double storey in Ipoh as a retirement home, around 2k.

The whole idea is to work in KL and raise our child in KL, then once the child reach 20 years old we retire back to Ipoh. The apartment then gift our child to live in if he works in KL, if not then we rent out/sell.

Are we too simplistic in our thinking?

This post has been edited by CoolStoryWriter: Feb 7 2023, 07:15 PM

No use buying a house now for you to stay 20 years in the future. Unless the rental rate for that house can cover the installment.

Need to also keep in mind the cost for maintenance and upkeep of the house for the next 20 years before you move in. Buy when you need it later instead of now. You might have a different opinion then.

Just worry that if wait 20 years, i can no longer get 30-35 year loan since im old like 50 years old.

Many sifu here say, invest for 8% return p.a, by the time you retire, can buy cash liao, u can prove them right

Apartment in KL which location?
And how old is that unit?
Because it's also play role in future...
Like flipping or maintenance

Haven’t factor inflation or whatsoever

This post has been edited by elimi8z: Feb 7 2023, 08:31 PM

How to get 8% consistently every year lol. I wish for this scenario also but is unlikely.

EPF got 5% p.a wat

Seriously too early

Your child will choose to fly off from nest and may settle oversea

You too still have long career path ahead and may relocate

If got budget of RM2k every month, I'd invest that funds by buying blue chip stocks in the share market (make sure you do research, by those that are undervalued), and DCA (dollar-cost average). Better returns on your money, and you don't tie-up your funds long term.

no.

new only. malu with friends

Don’t bother with Ipoh. You’d be subsidising an empty house for years which may become a burden. Focus on building your wealth. Your preferences may change and you won’t want to live in a slow area moreover you got over 30 years to go which is a very long time.

Hm good point. But is my worry valid? Lets say i live in my apartment until children grow up, if I plan to buy property at 50, i fear i no longer able since bank will not lend me 30-35 year loan...

This is classic FOMO at work. It works in an otherwise stable economy and environment. Too many variables to worry about in this country. Would you still want to live in Ipoh if it became a PAS state? This is how drastic the tide can turn here.

Focus on building your career and wealth so you can afford what you want later on. Capital city real estate will always appreciate better than a small town.

I would rather buy apartment/landed at the hot area near to university, hospital and etc and convert it into homestay/air bnb

At that age point if you don't have enough retirement savings to pay for most of a new home in cash, you're in deep trouble 😵‍💫

Also, other points to consider:

1) can you really be sure your kid will want to stay in that property you chose? What if they migrate? What if your family splits apart due to fights? What if the property is too small/too big for them to want to stay?

2) unless it's a heritage building from colonial era built by rich people (read: very high quality workmanship and materials), a property that's more than 15 years old will usually be in a poor state that's unfit for staying without substantial renovations to upgrade and fix. And renovation loan is significantly more difficult to get than a loan to buy a property.

3) the area you buy might no longer be worth staying due to urbanization/population migration, and selling would be a loss (especially if worn down due to age/lack of habitation)

Better to put that money to investment so you have funds to give your children. More flexible that way.

No, because by then, most of your friends will not be in Ipoh. Many people think like that but don't end up going back unless you really don't have friends kind.

Also, better off investing the 2k a mth in the next 20 years. Probably can be 2m or so.

You have valid points. But just 1 question, isnt it a bad idea to use retirement fund to buy home in cash??? Thats a waste.

It's best to look it this way:

You putting 2k a month for a second home; instead of buying now, invest it. It's not part of your retirement savings anyway since you'll be paying 2k a month if you buy now. Cost-opportunity, better to be more flexible than tied down in a long loan tenure for a house you don't need at present moment.

thanks a lot. you really gave good advise