Lack Of Updates..

The lack of update, wow, Its definitely going to be like this for MSN Live space for me, as they have still not got the statistics up and running, I like it discreet to see how many people are reading what on the website, and for those Live space users I am sure you know what I am talking about. most of our complain have fallen on deaf ears, but anyway I will still update but not as frequent anymore.

This article I would like to share is on the property myths, there is 6 to know.. enjoy ..

Property investment in the new decade
THE times have been good for property investors in the past couple of years. Prices in certain areas, particularly in selected areas of Kuala Lumpur and Petaling Jaya have risen significantly, some as high as 50 per cent. And as a result of this rise, practically all property investors had made money. In fact, some people have seen their net worth jump up by 30 or 40 per cent because of the price rise. For example, a young colleague who purchased their house two years ago saw the value of their house increase from RM950,000 (S$410,000) to RM1.3 million today. Of course, the owner was all smiles when they told me the story. I am happy for them. As an avid property investor, I have benefitted from the rise myself, so I am certainly not complaining. At the same time, I must admit that I have some reservation about the whole scenario.

Six myths

The price rise has distorted reality to many investors, including my
colleague. Because the price climbed up as soon as he bought the
property, and remained at a high level even today, his view on property
investment is seriously distorted. He thinks that:

1. Prices will go up as soon you buy a property.
2. The gains will be in double digits per annum.
3. This is normal.
4. Prices always go up.
5. It is easy to make money in properties.
6. He is a super genius when it comes to property investment!

Long-term property investors will quickly point out that none of the above are true. That’s right – none!

Not always like this

For starters, I can tell you the current situation is exceptional. It
wasn’t like this five years ago, and certainly not ten years ago. I can
also tell you that times are not going to remain this good forever.

Prices do not rise to the sky, and interest rates do not stay low
forever. In fact, interest rates has already climbed (or to use the
toned down term of ‘normalised’) by 75 basis points already this year.

Why am I so sure of this? Simple; I have seen similar euphoria before
(the first in the mid-1980s and then in year 1997 during the Asian
Currency Crisis), and the story did not end well on both occasions. Like
most bubbles, prices edged up slowly initially.

The initial buyers made money and this attracted others to invest
into properties as well. And as prices climbed higher and higher, the
euphoria got to the levels that some people were rushing to buy because
they were scared that the prices will spiral out of their reach if they
do not act then.

But when the market crashed, as all bubbles eventually do, a lot of
people were seriously hit, a lot of money was lost, and that included
seeing their properties being auctioned off by the banks.

History repeats itself

I see the same story being repeated today. On top of the ever present
dangers, there will be massive challenges in this new decade.

There will be much turbulence in the coming days, and some of them
will be unlike what you and I have seen or experienced before. This may
include double-digit interest rates, multiple bank failures, currency
crashes and explosion of the derivatives market.

As a result of the new challenges, the investors using the current
success formula of buying five properties at one go (by paying the
minimum down payment and borrowing to the hilt) will be seriously
hammered. They will experience much pain, to put it mildly. Some people
will lose their properties, some will lose more than money and yes, some
will become ex-millionaires.

But of course, where there is danger, there are also opportunities.
This will include a huge number of properties being auctioned and also
getting huge discounts from distressed sellers.

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