I somehow after spending a whole bulk of cash for my newly opened laundry outlet....there's RM180K left for me and now I'm planning to buy a house using that amount of money as I'm married and have a baby. At the moment, I rent a kampung house in desa pandan and my outlet is in gombak.......a 13km trip from my house to my outlet everyday per trip. I need guidance from all property sifus around here....not agent but just a guidance...maybe that rm180k as a deposit...what kinda house and which area to ease my trip

Am,

Just rent a house in Gombak for now. You got plenty of choice if your budget is above RM800.

Being new in business, your 1st priority now is to grow and stabilize your business. Cashflow is extremely important, and that remaining 180k is your safety net in case things gone horribly wrong. Making a 180k commitment now is suicidal and will leave your business extremely vulnerable when things arent as rosy.

Be patient, grow your business, then ONLY after 2 years you can consider buying a house in Gombak or whatever area u fancy. Take 90% financing under flexi loans, then park your remaining cash into the flexi loan to save on interest repayment. That way you save plenty on interest and at the same time mantaining your liquidity position.

Good luck

Wouldn't it be better to rent another house nearby your business area and keep the extra cash for emergency since your business is still NEW? You'll need the additional cash while waiting for your business to stabilize and a few months more for profit to start coming in.

I don't think it's rational to have 2 major financial commitment at the same time. If even one of it fail, you'll be in big problem trying to save it and at the same time maintaining the other one.

Cheers.

really appreciate the comments from the two of you.....these are the kind of guidance i'm looking for....thanx again, take those into account

I wouldn't advise to put the whole chunk of 180g into your housing as deposit (unless your house is 1.8M). You will need CASH to pay for lots of stuff before your house is completed like lawyer fee, MRTA, assessment fee, deposit for your electric and water, upon completion you need to pay reno fee, furniture, moving cost. You also need to consider about your new started business...etc. Not to say buying a house now is not advisable but planning wisely is everything.

Just my RM0.02 (to be rounded down to RM0.00 effective from 1st April 2008).

This post has been edited by cheefai7: Mar 21 2008, 12:45 PM

I agree with Pai keep your cash or at least reserve the bulk of it to keep your business running smoothly.

It's better to rent in the short term but if you must buy a house, I'd suggest an apartment/condo instead and take 90% loan with 30 year tenure if possible.

That way you don't having to fork out too much capital.

In all honesty I don't know if there are any new/existing properties in Gombak to recommend since I rarely go there.

Once your business is settled down and you're financially comfortable in a few years time you can sell the apartment or rent it out and start looking for a house.

Aaron,

Its a good suggestion especially considering the houses will only get more expensive in the future, but honestly I dont think TS will qualify for a loan. The fact is TS is a business newbie, and no bank will approve his loan application unless he has at least 2 years business experience and has prove that his business is sustainable with decent income.

Hence why I recommend he should only consider getting a house after 2 years. But I totally agree with u that TS should go for max loan and max tenure possible, under a flexi loan

Single Terrace house only. Since your child is still a baby, staying in a small house isn't a problem.

thanx for the tips BROS

I don't agree with some who advise on pure saving cash yet.

If you can buy and able to apply loan success, take nice new condo around there which is 200-300K which are quite HOT now. throw in maybe 80K deposit and you still have 100K cash flow. Land is lacking and house price getting higher. Your cash now will depreciate over everyear which might not match its current value now. Banking it partly on a property is wise to make sure your hard earn cash wont depreciate in vain. You can then have future option to rent/sale for more income or stay yourself. With facilities, a basic small family confortable life can be obtained. Somemore though condo does not have the value like landed but it is easier to maintain and better security (Condo and above level only). If your business succcess in years, you probably rich to buy a million semi-D to move in with still your condo for various options.

My theory is a all-in-all a fallback plan with business,investment, and family plan.

thanx mate, i really appreciate yours

just buy the house dude. make the house as a property of your company and then later, when you have problems with cash flow @ wants to expand ur business, you can always go for a loan @ overdraft using your house (an asset of your company) as collateral.

TS, this one's nice (hehe):

http://iproperty.com.my/property/listing.asp?pid=106944

below 170k, nice green environment, near your shop. (and possibly earned one extra devoted customer .. yours truly, among other new houseowners in your vicinity coz many young couples are pretty lazy in washing clothes nowadays

My point of view,

Just check around for apartment instead of landed propety. If possible, do some calculation on how much your maintenance for your new dobi and make sure you have maintaining power of 1 1/2 year. Left overs, you only decide if that is sufficient for you to maintain the new apartment for at least 3 years ( assuming the worst for your business but won't be since it's dobi ) so that you have time to recuperate should something went awefully wrong.

Always have some balance and something to fall back on for emergency usage not forgetting you need to take care of the family's wealth and health too

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Added on March 29, 2008, 10:06 pmOh yeah, you could also rent out rooms and gain from rental should you find an aparment or house that is suitable to your taste

This post has been edited by coolie: Mar 29 2008, 10:06 PM

yeehs18,

I STRONGLY disagree with you. I came from a small business family. Cash flow is always a problem. For a NEW business, in order to have ANY chance of success, you need ENOUGH CASH to survive for 2 years with NO PROFIT. It is TOUGH enough to run a NEW business. You do not need the additional problem of trying to find cash.

<<Your cash now will depreciate over everyear >>

So, you put your money in FD and earning 3.7%. Assuming that inflation is 7%, you are losing 3.3% per year. You are buying yourself a safety net for 3.3% a year for 2 years. Is that a big deal?? Instead of that, you are going to borrow from bank and pay 7% a year in interest?

Now, what happened if we go into recession and house value gone down, your loan facility will be reduced or canceled.

Rent. Do not buy.

Dreamer

This post has been edited by dreamer101: Mar 29 2008, 10:23 PM

Rent to own options probably?

I disagree.

New business risks closure for the first 2-3 years if not properly maintained. You need a large amount of cash to manage cash flow.

IF the business fail, TS will have a major financial crisis to maintain BOTH his business and his apartment.

My opinion is that when you do not have a stable income, you do not take up major financial burden such as loans.

Take a look at the Financial Crisis and SARS, those are the moments which you need your reserves to fall back on.

It's not the typical month-to-month / seasonal fluctuation type.

My feel is that you do have other side income aside from your laundry venture, therefore, if those are sustainable, by all means, please your heart's desire.

This post has been edited by Dyong: Apr 2 2008, 03:31 PM