Nah, envy you guys starting so early.

I'm planning my budget for a new apartment/house/property for the next few years, otherwise I would had spend it on i.e a brand new car, a brand new laptop, etc. something interesting to have, but depreciative to own.

I open this thread is because I want to find answers that I cant find myself, and it's also useful for those which intends to purchase a property at this age too.

This post has been edited by SleeplessEyes: Feb 26 2009, 09:14 AM

Yup, your mindset is good and your age is just right. For anyone in the mid-20s, with adequate $$$$ in hand, its time to scout for property and acquire one, and wait 2-3 to get them finish construction, and walla.. a proud home-owner before they hit 30.



The main issue is $$$ to get the balls rolling, and $$$ in the future to KEEP the ball in "continuous motion".

I'll share a bit on my situation right here

I bought my first property at 20 y/o for my family. A 220k terrace house. High DP from my offshore work and low loan pymt monthly. That time got free S&P and legal fees. Bad move at that time coz it was for family stay and a big chunk of money went there.

Bought my 2nd property at 22 y/o. Didn't earn much from rental coz I stayed there as well. So I sold it off and earn some cash. Then struggled to save up some cash and buy a 2nd hand at 80k (I was 24), it's a 3 bedroom apartment. I stayed at the master room and rent out the rest. Both the rooms can cover the installment plus cover the maintenance

Basically what I was trying to say is, when you realized you cannot afford to buy a family house.. start getting a place where you can rent out some rooms to cover your monthly installment.

I did a mistake by buying a family house first. It's tough to save money while you're in such a big commitment. But to share or not to share, it's what you've gotta discuss with your future wifey.

Else, combine income?

you cant rent out a family home? by the way where's ur location? so cheap 80k property u got there... flat is it?

Erm, the first home is still for family. I moved out.

Well, I find your personal story quite admirable. Thanks for sharing.

Using your lingo, I made the same similar mistake as well. I was jaded and thought landed was and will always be the best....So, I bought a DSLH at that time, which was well above my budget.....The monthly outflows nearly killed mrs and myself.

Then, I went on to apartments and condo's - within my budget, and was fortunate to structure it in a +ve cash flow way.....

the only good thing that came out of this whole experience is that my DSLH has appreciated, and I use it as cash engine to refinance and cash out....to use the excess cash to buy other prop's.

I agree with u......in hindsight, I should have started with apartments, something within my budget.....Oh well, have to swallow salt and learn from my mistakes...

cheers.

This post has been edited by Phoeni_142: Feb 26 2009, 01:52 PM

Home as a piggy bank?

You guys were buying property so early . Currently we're only using 10% of our pay for house instalment (+rm100 for maintenance and another rm200+ for bills). Cant imagine paying 33%, since still hv student loans to settle

Why not?

In fact the appreciation of properties give better returns than Fixed Deposit and is the second safest investment in terms of Investment

Well that's why US homeowners are in such deep trouble right now - they withdrew too much from their home equity (to buy junks, compete with their neighbours etc) that when house value drop, their mortgage > house's worth.

On the other hand, I bet you know your money well not too spend on useless doodads

Not entirely true.
FD usually one keeps for short period of time, however properties tends to be kept for a more longer period of time unless we're talking about "flipping" techniques. Than again considering the amount of money one needs to put in for the upkeep of the property (if it's not rented out), one could have an illusion that it's profitable because haven't include the amount of money spent vs amount of money received back.

The problem with subprime is because everyone has the mentality that property prices would always appreciate. The banks sees little risk in it thus when the bubble pops - bye bye.

don't think so lo
mostly the bank won't approve ur loan

Reason?

True. And another thing is most people think that the price can either go up or worst case remain, not knowing that sometimes the developer might even sell at loss, if business still not doing good. I've seen a lot of this case,but probably I'm not staying in KL which is immune to this

I read your story with great

However, I do not think that you made a mistake by buying the 220k terrace house for your family. Not all of us are "lucky" enough to have rich parents, u r jjust doing your obligation as a good kid to your parents. I have nothing but respect

Plus, im betting your DS has appreciated now n you can always refinance to free up some equity for future opportunities, no?

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Added on February 26, 2009, 7:54 pmu shouldnt.

U should be prowd to see more yuppies today have balls to plan for their future instead of spend, spend, spend mentality

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Added on February 26, 2009, 7:59 pmnot all the time. Like any investment, there are good and bad picks. And its never a good idea to "bet" on appreciation.

Go for high yielding properties, lower risk IMO

This post has been edited by Pai: Feb 26 2009, 07:59 PM

yea i strongly agree with it. This bubble is much bigger or in the sense, much worse, because too many players (homeowners) involved. Robert Kiyosaki teach too many people to do it. American just like us, see properties( houses) are the strongest investment., and it's a sure win investment.
will not depreciate in value. This subprime mortgage doesnt happen in Malaysia just because bank play safer (30% of your salary repayment) than those banks in america ( more than 100% value of your properties) . when the BLR in america rise a bit, no one able to afford to payback , then people lose confidence on property investment, no one buys = drop in property value. when you house price drop = you have to pay back.
when people unable to pay back bank..bank burst. government bails. even loweing the interest rate is no use anymore. because people already lose confidence.
This is same like the dot-coms bubble. But with more player, more money involves and therefore bigger hole ...

5K deposit to loan RM150k .....i dont think you are able to.
if few years ago and you're american ...lend you RM170k ....cos your properties will appriciate in value...lol

the story different now

Teach what?
To flip or to be rich or that people have choices.

buy and rent . use rental to pay off mortgage.
I didnt say it does not works.
many people follow. but kinda blindly and didnt think of consequences behind the risk. more to american, whom many treat it as "get rich quick scheme".

Yes, people have choices,they can choose not to buy and rent, not to flip, stay with the current job , save and die. They been told they can do other things, to have easier money. What choices will they make? Choose to follow the trend or not?

if you treat it as a business.. it involves a lot of effort and time. and many problem, tenant problem main concern.

yes, leverage . still it involves risk. And i'm not telling you guys not to do it. you can , but think a bit long term. you able to get loan, tenant, rental. that is short term. think 5 years , 10 years 20years.
every decades, is an economic cycle...will you still be with your job? or do you have a huge pile of money backup all your mortgage?
dont need rocket scientist to help you thinking... common sense involve.

be4 this downturn, credit crunch, everyone ( i dont deny myself) think is a sure win, until this crisis happens.
just like the history, goldrush, dotcom, now the property.

it involves risk and rewards. know your risk and situation.
i dont against it, cos my parent does the same, in a safely manner. I am going to do the same as well.

Thanks for you opinion.

Robert only educates me in general financial basics but warns that I would make mistake.
I had made my choice, if I make mistake, I would correct it and move on.

many possible reasons. No point I state all here - as we can't determine it online with accuracy.

why not u just submit in your details and profile to the bank first - ask them if u are eligible for the loan?

easiest way - and don't u think you'd rather trust the bankers than us? Your banker is in the best position to advise u here. cheers.