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Property Buying & Selling Articles
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- Why Invest In Property In Malaysia?
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Tips and Guides > Buying and Selling Guides > Buying and Selling articles > Reasons to Get Into Investment Property
Reasons to Get Into Investment Property
When you begin on your investment property journey, you need to know what your investment objectives are. Ask yourself,
"What is my target rate of return?"
"How much of down payment am I prepared to put down?"
"How much monthly installment am I willing to pay?"
"How much do I want to make before I stop?"
"Will I be able to manage if there are losses?"
"How long do I want to hold the properties for?", and so on.
The list of criteria differs from one individual to another, so it is best to figure out what yours are prior to putting any earnest deposit down.
Properties provide more predictable returns than stocks and bonds.
Properties provide an inflation hedge because rental rates and investment cash flows usually increase by at least as much as the inflation rate.
Properties provide an excellent place for capital in times when investors are unsure of prospects in the stock and bond markets or when investors expect long-term returns in stocks and bonds to be inadequate.
The equity created in investment property provides an excellent base for financing other investment
opportunities a.k.a investors can refinance properties to finance other projects or investments.
WHAT to look for in an investment property:
There are several determinants of property value such as the following:
Determine your target market and whether there will be demand for your property in your chosen location. Be sure to research the historical value appreciation as well.
Different residential and commercial properties attract different tenant profiles and the surrounding and available amenities might also reflect the tenant profiles. For example, if there are several colleges or universities in a particular area, you might see a higher percentage of students in nearby properties.
Find out the rental values of similar properties in the area for a gauge of how much your property might fetch.
Valuate the property's potential to generate income and the duration it will take to achieve positive cash flow.
Sources
• Your guide to buying an investment property - CIMB Bank
* All data and information is correct at time of upload. These articles are for information and basic educational purposes only.
Consumer experiences may differ depending on location or other factors.
Consumer experiences may differ depending on location or other factors.
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