Wednesday, 1 August 2012

My Property Investment Beliefs

I will start the first post on the 2Y Real Estate Fund today and share some of my beliefs on the property market. I will share my journey in a subsequent post.

First of all, let me begin by stating that I personally believe that property investments will help you get out of the rat race faster and achieve true financial freedom. There are a few reasons why i favor this asset class over the rest such as stocks, bonds and others.
  1. The cost of borrowings is low.
  2. The risk is relatively lower vis-a-vis other asset classes
  3. I am able to get leverage returns from it and knowing how to make use of "good debt" is one of the most important lessons you must learn to reach financial freedom.
  4. There are enough examples of ordinary people making it rich and retiring early through property investments. The Fragrance Group founder is a billionaire today and he made it through investing in property. I haven't even mention those tycoons in Singapore and Hong Kong who became extremely wealthy through properties.
My personal beliefs:
  1. Property markets moved in cycles and there are a few cycles in one's life. Catch it well and you will achieve your financial freedom. Having said that, if you catch it wrongly at the peak, it will set you back and take you a much longer time.
  2. You need at least 2 properties to make it rich. If you have only one property, you will always be "upgrading" at the wrong time. By the time you managed to sell your property in which you stay in, you will also be buying the next property at a higher price.
  3. Always be prepared and make sure you are able to service the debt even during a downturn.
  4. Go for value.
  5. Timing and location are very important.
Let me share with you what i used to time the market. It is a chart from URA. There are many great tools at the website, such as the recent property transactions etc. Do make good use of them.The chart below is one that i look at it every Sunday in the classified ads. A picture tells a thousand words.

My first foray into any asset classes always ended with a loss. My first foray into stock and shares market ended with a loss. My first foray into the property market also ended in a loss and you won't believe what property was that. hahaha. Anyway, that is why i always believe that you have to pay school fees to learn something and you must never give up. 

My view on the property market - likely to go sideways with slight downward bias and consolidate in the next 6-8 quarters. In the meantime, I will continue to save up my cash so that it can be deployed at the most optimal time.

I will share with you more about my property investment journey next time and some of the invaluable lessons which i have learnt. Timing is important and catch the right cycle. 


Jardin Smith said...

I think people can make large profit if they have good knowledge in real estate.

Jardin Smith International

Kylie Farrugia said...

Contrary to belief, there are various options in which to hold property. The extent and type of property investment, one wishes to have is largely determined by the level of personal involvement during the life span of the investment, as well as the reason for the investment.

Kredit Von Privat an Privat.

Condo Investment said...

Property investment has always been one of the most common methods of investing capital.

Condo Investment

HcoRealEstate said...
This comment has been removed by the author.
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This article gives the light in which we can observe the reality. This is very nice one and gives in depth information.

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