When should you get a property?
Our property market is still in high demand even though our country is still trying to recover from the recent recession. Many people have chose to wait it out since 2008, hoping that our property market will take a dip. However, thanks to the brilliant marketing plan from the local property developers, our property market did not suffer due to the recession. Instead, the prices keep going up!
And for some people, such prices have gone overboard and they could no longer afford these properties especially those in the Klang valley and also few popular spots in Penang.
Then the question of “when should I really get a property?” comes out. Is it better to get it now since the property price is just going to go up anyway? Or should I look at what can I afford irregardless of the demand-supply in the property market?
It’s a tough question to answer because ….well, I do believe our property market will not slow down. More and more people form other states are coming into the Klang Valley and some towards Penang. So the demand will still be there especially at the popular spots like Petaling Jaya, USJ and Shah Alam areas. Waiting it out could mean that the gap between what you can afford and what it takes to afford a property, might end up getting wider and wider.
But don’t panic. In my humble opinion, you need to consider a few things before you dive into the property market.
- Do you have emergency fund? – you need to have at least 6 months to 2 years of emergency fund, depending on your monthly expenses. Yes, this should be the priority before you get a property. If you don’t have this, then save up for this before thinking about property.
- Is your job or career path stable? Can your skills and attitude help you to get a job where many have failed? - this is to ensure that when shit happens and you get retrenched, you will not remain jobless for too long. Because if you’re jobless, you still need to pay the bank for the property loan and that is going to make your life very very stressful.
- Do you have other investment? – stocks, mutual funds, fixed deposit accounts, EPF, these things can help you to move some of the money into property investing.
- How desperate are you in looking for a property? – are you getting married, or the current landlord is chasing you out? This will determine how desperate you are and also determine if you can actually wait a little longer before getting a property. Remember that desperation is not good when you cannot even afford it in the first place.
- and why are you looking to get a property in the first place? – is it for investment and you plan to sell it out after few years, or is it for your own stay? This question will determine the location and the type of property you should invest in…and of course, these 2 conditions will determine how much you actually need and if you can afford.
Once you have the answers for the questions above, you should know whether you can afford to buy a property now, or is it still better to rent a room for now and wait it out?
In the end, I believe that investing in a property is a good thing to do but you really need to know why do you want to get a property…and also if you can afford one with your current financial condition. Never ever dive head-first into property market if you are unsure of what you are doing. It can be disastrous, just like what happened to many newbie property investors in 2007-2009. They bought properties they could not afford, and were forced to sell them off cheaply.
Property market can be rewarding, but it can also be pretty damaging. So thread carefully. Do your research, do some soul-searching and think carefully before you invest.
All the best.
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