For home investor, the massive amount property already in the market can present both opportunities and risks inside the pursuit of assets acquisition. There can be a smorgasbord of landed and high-rise home to choose from with regards to price, design, build-up and to suit one’s life-styles and budget. Selecting the right property is dependent upon many factors which interplay to restore challenging to get a novice investor. A good location that accompanies good amenities and accessibility is an effective place to start.
The decision which often property to shell out hinges upon the aforementioned factors which often can also be colored by one’s emotion. As much as one be objective and practical, the sweet-talking salespersons or realtors and enticing decor with the show units can pull wool over our eyes. We can easily forget the fine prints from the glossy brochures or subtle defects inside the ready units. Developers usually embellish their sales publication with hyped-up value and benefits to attract potential customers.
Be this as it can certainly, you should always be mindful in the tricks in the trade employed be seasoned sales reps who act inside the interest from the developers or sellers. Some agents can be very economical together with the truth and give unverified information to shut the sale. It is therefore prudent to evaluate and verify information with reliable sources. One can also research and compare data along with other sources for example the internet plus the community most importantly. Your friends, loved ones and relatives can be also a source of reference.
Now that people have covered some in the pitfalls and hazards in property investment and selection, we need to take calculated risks and weigh the alternatives we have in a enlightened manner. This article will consentrate on high-rise serviced apartments that are flooding the home market within my home country of Malaysia. This is because many property developers over here are building high-rise residential units to focus on the life-style living aspiration in the people who attempts convenience, accessibility and security. Most of these high-rise developments include a myriad of facilities and living comfort. These so-called lifestyle themed development can have a hefty price tag inside the form of maintenance fee, quit rent and assessment fee. For the investor, the target is to get good rental yield and capital growth within the years to return. A good rental yield for high-rise serviced apartment should preferably be 5-6%. This will make it worth your energy in finding and deciding on a good property to get which can be very a hassle. Otherwise, you might be better off holding cash within the form of fixed deposit or placing your hard earned money in bonds or unit trusts which can be more liquid if you want the money.
An investor must pay for that upkeep on the property. As such, any expense like maintenance fee and price of repairs will cut to the rental incomes based on tenanting the device. For high-rise residential units including serviced apartments which sit down on commercial land, the quit rent, assessment fee and electricity bills are charged at higher rates than house. The rental incomes are taxable. Interests from house loan taken to finance the home is the other major expense that could reduce the rental incomes unless a trader choose to pay the home by cash. However, the investor who prefer to loan for want of gearing can make use of the rental incomes to defray the monthly loan installments payable on the banks. The interests charged from the banks can be also offset up against the rental incomes before tax is charged underneath the law. For cash purchase, the investor has stronger negotiating power which is in a stronger financial position to support on to the home and property compared to a purchase via bank loan which could be risky when interest is increasing.
Finding tenants to rent the units in the high-rise serviced apartments is usually fast or slow based on the density of those development inside the locality. A heavy density development creates more competition for tenants compared while using one with lower density. This applies for rental yield too.
Property investment can be another good hedge against inflation since it offers capital gain a duration of time. Depending on location and type of property (leasehold or freehold), the main town appreciation could be 5-10% each year. Over a period of 5 to 10 years, a house can appreciate at such rates if the home cycle is expansionary. A property may also remain stable or unchanged with regards to capital growth compared with properties from the same locality. This is as a result of saturation or property glut available in the market. If a venture capitalist is not careful, home investment could lead to negative capital growth because of contraction and troughs inside the economic cycles. Timing is therefore crucial in property investment. In addition, if you pick a property inside a location with plans for progression of MRT/LRT stations or transportation links with other major roads and highways, you may expect capital appreciation inside the future.
When deciding what sort of property to shell out, high-rise residential units earn better rental yields weighed against landed property obtaining the a lower rental yield of just one.5-2%. This may be attributed to your lifestyle convenience given by high-rise serviced apartments which give facilities for instance swimming pools, gymnasium, sports and activities, 24-hours security, etc. High-rise serviced apartments with facilities are likely to attract younger families who seek out such lifestyle conveniences. On the other hand, landed property has higher capital growth since it sits without treatment titled land which can be getting scarce together with the growing population. It offers capital continuing development of 5-10% a year especially freehold and people in prime location. High-rise residential units with strata titles normally do not offer the same capital growth. Do be aware that any capital gain from disposal from the property may attract capital gain tax.
In the final, the roi (ROI) from rental incomes and/or capital gain should give justification for your investment inside first place.
All the different points elucidated above provide a macro take a look at property investment from the context of high-rise residential development. Let’s take a micro take a look at property investment with regards to quality and workmanship.
If you’re looking to speculate in a high-rise serviced apartments or serviced offices (SOHO/SOFO), you have to keep your eyes open because the devil is within the details. For ready units inside a new development or sub-sale, you must inspect it for any leaking inside ceiling or water seepage with the window. If the ceiling has water marks, it implies that water is leaking from the device above. This leaking problem can pose to become a challenge to solve since it needs the cooperation in the resident that is staying inside unit above and also the management corporation in the property.
Water can seep from the window between frame and cement or between glass and frame during heavy rain. This is especially problematic for units about the higher floors. The rubber seals and silicone used from the construction in the window and frame can crack and melt underneath the heat in the sun. Through the ravages of their time, you can view water marks appearing for the wall close to and underneath your window.
The residents from the unit above is usually a nuisance on the residents inside unit below if noise is often a major issue.
A developer with good reputation does matter in property investment.
On having a positive side, high-rise serviced apartments may offer panoramic view specifically for upper floor residents. A view awesome some may say. These units come at a higher price.
From the perspective of Feng Shui, the view in the balcony ought to be overlooking a landscape of lakes or rivers, preferably from the southwest, east, southeast or north. The common areas within the home such as walkways and corridors really should be brightly lit. Any property and that is subject to windy condition is additionally not auspicious because life force generally known as Qi is unsettling such an area.