I save some money but I'm not sure is now the right time for me to buy a house. So may I know when or how do u know u are ready?

When ur installment of all ur debt included the house is not exceeded thn 1/3 of ur income...
then that is the time......

Refer to property section or specifically this:
http://forum.lowyat.net/topic/656393

I believe I have enuf money to buy one but I'm not sure why am I getting one for.. u know what I mean. I guess it's time for money to work harder instead of parking on fd.

This post has been edited by choice: Apr 11 2008, 11:46 PM

You are ready when ...

1. you can buy your dream house by cash
2. someone borrow you more money to buy the house and you are comfortable with their terms on how much to pay back and in what time fashion.

and finally you are ready when you see one house you like it so much you don't really care about other things and you just want it right away, then you will have to buy it at premium

---

Added on April 11, 2008, 11:46 pmthat means you should not buy at all lor, keep in FD lor ...

This post has been edited by mtsen: Apr 11 2008, 11:46 PM

You are ready when...

1. You are ready for the commitment in terms of repayment or in other words u a stable ability (financially) to support the house
2. You are sure about the location of the house and the price (dont be hurry to buy a house) in terms of current value and future potential value trust me you dont wanna buy a house where is famous of gangsterism and sort
3. Make sure you know how to get the best deal from a house (new or 2nd hand)
4. You have a savings that should at least cover 6months of your current income after u buy,renovate and ch'ng ur house (in case of unfortunate case)

5. THE MOST IMPORTANT thing is that make sure u can support ur house expenditure especially those unpredictable ones



1. Even really rich Dato or Tan Sri also dont buy house with cash coz is plain stupid if u dont know why ask ppl
2. i totally dont get what u trying to say,

and finally if you dont care bout any other things and buy a house without much consideration u'll end up bankrupt or be in deep financial trouble

p.s wtf is premium?

when 50% of your total savings account equal to 25% downpayment of the property/house..

Choice,

I am assuming that you are buying a house to live. Do you know where you want to live to begin with?? If you do, you start scouting around the area and check the price and the environment.

Are you married?? If not, how do you know your future spouse (wife/husband) want to live in the same area?

In general, do not buy until you have married for a while.

Dreamer

how about for some one that decide not to marry for his whole life? :s

Who have this plan in miind?

ah_suknat,

Then, that is ONE reason not to buy a house. The person may live with the parent for his/her whole life.

Dreamer

How will you know? When the expected return from buying the house meets the opportunity cost of capital you have to put up to buy the house (i.e. relative to where else the money can be spent).

yo man why would a monk need a house?
well yeah you never really know when you are ready for a house..

@dreamer101,
I see no harm for TS (he said he has the $) to start investing in a property. From what I read, it doesn't look like he has intentions to shift into this new property - but should he decide that he wants to in future, he can

@choice,
I think if u come across something u think u like (and willing to live there) and have the $ to buy the property, I don't see Y u should hesitate. You could always sell or rent the property out and if u do decide to shift in at a later time, u could too!

If ur getting it purely for investment purposes, U should check the 2ndhand market as well as the rental market in the area too.

Unlike the rest here, my vote is to go for it - having said that, make sure u still have some cash at hand for emergency purposes

This post has been edited by tinkerbel: Apr 12 2008, 12:03 PM

Like I always stressed. You buy it for investment or for own stay i.e. home.
If it's for investment than more considerations needed to be put in.
If it's for own stay, than fine; because the philosophy is not to think of it as something that will help you generate income. So go for it when you think you have the money. Obviously considering you have the income to commit yourself to the monthly loan repayment.

tinkerbel,

I disagree. The factors that you use to buy investment property versus a place to live is different. You have to decide. I have seen enough people losing money on property because they did not made this decision ahead of time.

<<I see no harm for TS (he said he has the $) to start investing in a property.>>

This is a BIG investment. If you do not know enough to make the RIGHT decision, you will be paying this lost for the rest of your life. Study carefully before you make this kind of decision.

This is not like buying RM1K worth of UT or stock. The amount of money involve is a lot bigger.

Dreamer

This post has been edited by dreamer101: Apr 12 2008, 07:06 PM

[quote=tinkerbel,Apr 12 2008, 12:02 PM]

I see no harm for TS (he said he has the $) to start investing in a property. From what I read, it doesn't look like he has intentions to shift into this new property - but should he decide that he wants to in future, he can

- Just like thinkerbel said as for time being or within 5years I won't be moving in. I would like to invest property that I might be moving in the future.

[quote=dreamer101,Apr 12 2008, 07:05 PM]

This is not like buying RM1K worth of UT or stock. The amount of money involve is a lot bigger.

- Actually I quite regret after investing in UT.



I like studio apartment around town area. Also I think its got potential and will probably increase in value in the future.. So since its both what i like and have investment value.. i think its a good choice for me.

But the problem is my income not stable and I don't like the idea of borrowing money from family member. So I guess I need more than 70% before I can commit.

This post has been edited by choice: Apr 13 2008, 04:46 AM

@choice,
If ur income is not stable, U need to make sure u are going to be able to support the monthly loan instalments, or buy the property in cash or u might find urself in a sticky situation.

dreamer101 has a valid point about needs for moving in. If u intend to get a studio apartment and contemplating moving in 5 years later, that particular apartment might not be suitable for ur future needs; studio apartments are mainly catered for the 'yuppies' and not family. Though it might be cheap, I find the 2ndhand market for it rather small - same goes for a 1 bedroom apartment/condominium. It's easier to dispose off a 3 bedroom apartment as compared to a studio/1 bedroom/2 bedroom apartment [again, obviously price and location makes all the difference but U have a bigger net if u have 3 rooms as it is able to accommodate a family of more than just husband and wife]

I'd recently purchased a property - unlike the considerations dreamer101 stated, I have up to this point no idea what I'm going to do with it; I definitely have no idea of moving out on my own at the current moment but have left that option open. I can also opt to sell it off or rent it out when it's completed should I decide not to move in.

I think u r readyy to get your own roof when :

1. U've saved about 20% of the total purchase price and you salary today can afford the installments.

2. U've set an exit point

3. U've did your study and 100% convinced that u r buying not above market price and there's no other investment today can give u a better run for your $$$$$.

4. U like the place and u dont mind staying in it if s*it happens

I already save 60% of what I first planned. But with money I save I don't think I can get a good location. I guess I'm more into location than the size of the house.

This post has been edited by choice: Apr 13 2008, 05:48 PM

tinkerbel,

<<I'd recently purchased a property - unlike the considerations dreamer101 stated, I have up to this point no idea what I'm going to do with it; I definitely have no idea of moving out on my own at the current moment but have left that option open. I can also opt to sell it off or rent it out when it's completed should I decide not to move in.>>

You should also mention to TS that you have a lot of money and this property is your second or third property. This is not the same situation as the TS.

Look, I have a 82K 40' X 80' single storey Bungalow sitting vacant in rural Selangor. It is all paid for and I can afford to do nothing and just let the property sit for 10 to 20 years. I do not think this is something that many people can do.

My neighbor bought a house and has NO IDEA what he is going to do. Then, he could not rent or sell the other house. So, now, he move to the other house and rent out the house next to me. His rent is so low that he cannot cover his installment and he is paying installment for 2 houses now. Hopefully, he can survive.

He paid 250K for the house and spent 100K on renovation. One house in the same row had just sold for 190K. Another example of you will lose money when you sell the house that you lived in.

Dreamer

chief,

had the fella chosse to spent that 350k on a basic BU/TTDI DS 5-10 years ago, he would be sitting on a nice pile of $$$$$ today. Location is the key.

Its his ignorance that made him lose $$$$$, not the house itslef

@choice,
In that case U should look at the location U like and then check if there are any properties available in ur budget

Come to think of it I guess I only have 25% - 30% for the location I really want. I need to save more due to my income unstable. Thank you for all your advise.

@dreamer101,
I don't have a lot of $ and the S&P i'm about to sign for this property I booked last year is really my 1st property, not 2nd, 3rd or 4th.

Well, am sure the area u live in will give capital gains in years to come, just need to survive through it now - Ur neighbour must have thought about it before spending RM100k on reno works.

Pai,

1) You missed my point. He bought this house to live. It was the perfect location for him to live. So, he spent 100K renovating it.

2) The problem is the second house. He bought it to invest. But, it turned up to be a bad deal. He cannot sell or rent it. He could only rent out the first house.

3) I guess you have not heard story about people going bankrupt over the house in BU/TTDI during the last recession. House price do not go up in a straight line.

Dreamer

---

Added on April 14, 2008, 9:07 pmtinkerbel,

1) It is VERY SIMPLE. If you plan to live on this house for quite a while, you will spend fair amount of money on renovation. If not, you will not. Everyone know that 90+% of the time, you cannot recover the cost of renovation. So, if you plan to sell the house, you do not renovate or do minimal renovation.

2) From your previous postings, it looks like you will be moving into this house?? Am I wrong?

Dreamer


This post has been edited by dreamer101: Apr 14 2008, 09:07 PM

With the rising cost of materials, 100k will not go very far in renovation.

It boils down to what is the purpose of your house.

1) As a home for you and family
2) As investment property
3) Both of the above

If your choice is (3), then you have to forgo a little comfort in life, as renovation cost can rarely be recovered.

Personally, I make clear distinction between a home or investment property.

This post has been edited by Dyong: Apr 15 2008, 10:06 AM

seriously .. thinking of buying a house is big headache.. =))
* looking for shah alam nearby house

some people (so calle advisor/ relative) said that it better for u to look a house that can support your family till next 20 years .. it mean space... at the same time at a decent location and also at a same time close to your work place and also at the same time the buyer (me) wondering .. is there any house that fit all those requirement and at the same time.. fit the buyer (me) income??

for all that describe location in shah alam.. the only hint that i can get is Bukit jelutong/ denai alam (as they alway prescribe)... mmmmm ...are willing to dump all of your monthly income for a house??

at first i look for apartment.. but i don't think suite for that.. while my family always come from terengganu (both my in-law).. requirement for
1. space
2. parking lots
is important.. headache already with my current apartment.. security to tough even if u just want to drop ur "can't walk" mum inside the compound..


i thougt i'm ready..

why..
1. i got around 30k access cash available
2. i got company loan that can give me quite flexible monthly repayment max 250k for around 800 p/month and another 50k withh normal loan rate.. so my monthly repayment of 300k is around 1k (1/5 of combine salary)
3. paying rent around 700/month with ridiculous water bill (average of rm50/month for two + worst maintenance (it guthrie) + worst security)

now.. i don't know.. should i pursue my purchase for the house or not..

This post has been edited by ganz: Apr 15 2008, 10:18 AM

well, you already answered the question yourself. you shd save more than if it doesnt serve your goal

Huh? down payment for a 500K hse is just 50k(10%). 25% of the 50K is just ard 12.5k, 50% of 12.5k is just ard 6k(saving), so little only?

@Greybear,
I think he meant savings of about 25% equal to downpayment of house. That means, 25% on 500k = RM125k

This post has been edited by tinkerbel: May 22 2008, 09:36 PM

percentage is not the exact number... its depends on individuals..

what i meant on my previous post towards ts's question is .. make sure you have some savings left after put a huge upfront money for the house...

sorry for the confusion.. i would buy you girls drink but i can't.. haha

@KooHei,
Don't offer when U've no intentions of offering it It shows lack of class [no wonder people aren't impressed at the lil Kancil U drive around in ]

ok i assume i didn't saw that...

oh come on... usually people buy me drinks when they saw my kancil...

Tsk Tsk.. First, it was no class. Now it's no grammar !!

Wow 125K? tot of paying RM100k as downpayment only for the 500k hse, the remaining will be installed mthly d...

@GreyBear,
20% downpayment is considered high. Most people I hear takes up max 90%. I too am looking at putting 20% down and taking a 80% loan.

I can take a 75% loan but I'm keeping that 5% as a cushion. At least if I lose my job, I still have at least 6 months of reserve in the bank. Am also planning to go back to school so I might need to recalculate some cost due to RM0 income for 18 months *gulps*

you know when you got the right words on your brain but typed wrong... ok whatever, its the ssssssssskill

haha what's wrong with that..? the quicker to solve the home loans is good as far as i am concerned...

@KooHei,
Err.. and what ssssssssskill might that be?

property is the most illiquid asset i've come across.

for whatever reason(s) you choose to acquire the property for, be prepare to have your money stay invested within it for years.

with the exemption of 'property gain tax', although it encourages trading, unless there's a bubble, it's unlikely to keep the price appreciation going northward all the time.

if the capital that you've saved thus far can be safely put aside for some 5 years without having yourself worry a single twitch.. that's about time you're ready for this class of asset... welcome to the world of a property owner/trader.

by the way.. paper asset(e.g unit trust, stocks aren't necessary bad, you probably haven't invest enough in the knowledge of such asset class.. if you are going to adopt the same approach at acquiring a property, without adequate research/studying.. you'll find the same frustration you have had with unit trust with property as well)

... so, "caveat emptor" to you..

MBA?

hi tinkerbel,

your 18-months hiatus at school will cost a bomb right? do you think it's worth the forgone opportunity cost? i've sliced and diced this issue of education advancement many times, perhaps you can share your opinion at how you view this matter.

i'm not getting any younger, and i have doubt that the industry will be willing to pay more for the paper qualifications than the experience gathered over time. i'm mindful of the cost of acquiring the education.

leveraging is good, especially during stable times.. how much downpayment is one thing, but i believe that, there's great value in the ability to close/settle/dispose the loan should situation becomes so adverse (e.g loosing a job and bleeding interest rates)..

my dad once advocates saving 50% of the property price before acquiring it. how the acquisition is completed (e.g. how much downpayment to pay, and how much loan to take) is secondary.

@lwb,
U haf a point re the forgone opportunity cost vs the need for an education advancement esp since in my line, education is not seen as a criteria in climbing the ladder [I'm sure U know what I mean] but I'm getting a little tired running the rat race hence am considering taking a short break.

Within my industry, there's an annual scholarship offered in conjunction with Astro and our local Association and I'm aiming for that scholarship. Assuming if I get it, I probably can afford to leave the rat race for 12-18 months. There's a pretty interesting course related to my field of work at RMIT and with my current qualifications, I should be able to complete the 18 month accelerated course within 12 months. The only thing that stopped me from going in 2008 was my failure in being awarded the scholarship. I probably try for it again this year. Assuming I get it, I probably will go otherwise I will just stick around. There are just too few courses available locally to pick from

I also have this passion for education hence it might lead me to a different field altogether but if I had to advise someone, I would ask him to consider ROI. I was speaking to a friend and we both feel it's not worth investing RM98k on the Manchester Business School MBA especially in MY as most employers are not willing to pay the kinda salary unlike in the West.

As to buying of the property, I certainly do not have 50% of the property price, just 28% but am going ahead to get it. Am still considering my application for the 2008 scholarship as I don't want to deplete my savings!!! *grins* Ah well.. perhaps it's high time I find a man. What say U? *grins*

This is a very important point to consider. I remember reading an article years ago about the viability of doing an MBA. Even for people in the USA, the breakeven point (i.e. when your MBA course fees are matched by extra income) is several years - can't remember how many exactly, but slightly less than a decade.

Here in Malaysia, the value of post-grad qualifications is not well recognised by employers so the opportunity cost is very high indeed.

Perhaps it's high time for a man to find u!!

Go for the scholarship application. Wish you success in getting it.

Yes it is important to evaluate ROI before taking on the MBA if the purpose is for U to make more $ - as I've mentioned, it's v difficult to justify spending RM100k on an MBA as it will take probably a decade before that ROI is met; unlike in the West where it's about 2-3 years [I got this from a survey except I no longer have the URL, sorry]

U haf one/any to introduce?

This post has been edited by tinkerbel: May 25 2008, 03:41 PM

I might...

LOL turning into matchmaking thread...

This post has been edited by jchong: May 25 2008, 05:05 PM

@jchong,
Yea - please don't turn this into some Kopitiam thread In any case, am I going to be able to view his resume?

Don't have resume, but he's Head of Private Banking at a local bank.

@jchong,
HmMm... bank officers do get special home loan interest [Eh..at least I'm tying this back to the topic *grins*]. If he's so 'hot' Y is he still available?

Haven't found the right girl. Must be choosy mah!

Just like you, so eligible... you're not simply gonna take any guy that comes after u right?

Oops, going OT again

u think i m dead?

haha

if you can afford the course, better pay for it and give it to more deserving poor ppl.

@yewkhuay,
Of course U aren't dead; Ur just not mine

@jchong,
Perhaps U should check if he's looking before U make that recommendation. I don't take rejections too easily

@ah_suknat,
I definitely won't be able to make ends meet if I paid for the course on my own hence the scholarship It doesn't mean I'll get it if I apply for it; I didn't get it the previous time

Nobody likes rejection!

I know he's open.

you won't need a scholarship if you can afford an 800k house would you?

there are parents who would do ANYTHING just to get money for their kids to higher education.

@ah_suknat,
It is not a 'public' scholarship which is opened to the entire world; just for industry members and it is only valid for post graduate studies. From what I see, I don't think any of those applicants were 'needy' last year. If at all there are any this year I might just opt out - I afterall have a disadvantage as this would be my 2nd Masters.

@jchong,
So when U gonna start doing something instead of just talking?

I think we're totally going OT so let's get back to it!

This post has been edited by tinkerbel: May 26 2008, 10:30 AM