Do you start investment in property just follow blindly what people say is good ? Some friends are telling you this project A will get you return in 5 figures $$$$$ and some expert investors/ agents/ gurus also telling you that project B will get you return in 6 figures $$$$$$ or even more. I think you will have the same experience with me too. So, what will you do with all these information and advice?

Firstly, we should define our personal status and goal for investment in property. Chinese have a quote saying 知佊知自 (Zhi bi zhi zi) mean that we need to identify and understand our personal status before we start competing with others. Similar as investment in property, we need to understand our  personal status and goal before start investment in property too. Then, it will prevent any failure or loss because everyone have their different ability and goal.

Key 1: How much cash flow do you have?

As you know to start investment in property, you need to have some cash flow of 10% down payment, legal & agent fees. Example, if you like to purchase a condo at $270,000, you need a cash around $40,500 (10% down payment and 5% legal & agent fees) with 90% loan. Therefore, we need to know our personal cash flow status. How much monthly net income and expenses you have? Income either from fix salary, passive income, rental, commission, dividends, shares etc. after contribute EPF and income tax deduction. For expenses, will be your living expenses, house loan, car loan, credit card, “Doodads” (money down the drain) eg. travelling and etc. It will be good practice that you have your monthly balance sheet.  (If you need a sample of monthly balance sheet, click here to contact us).

Key 2: How many time do you have?

Is time important in property investment? Ok, let me ask you. If you do not have time, how you can study which property is worth to invest? It will be at high risk if you invest a property with doing research, analysis and study. Beside that, you need time to do site visiting, apply loan, submit legal papers work, preparing renovation, looking agents for rental or sell and etc. Anyway, many peoples comments investment in property is a type of investment committing less time with high return.

Key 3: Choosing which location to invest?

Many people will ask which is the best location to invest a property? Oversea or within Malaysia? Within Malaysia, which state should I buy the property-Penang, KL, JB or etc…? My thought is do a site visiting yourself before you choose which location to invest. Don’t simply trusting people/ agents/ developers describe the location for you. Beside that, choose a location which you know more about the surrounding and that area growth history. It can be the location nearby that you are staying. There are expert investors told me that invest a property in the area that you can reach within an hour from where you stay will be the best.

Key 4: Choosing which type of property?

How to choose which type of properties to invest will have a high return? Apartments, houses, commercial properties or land? You will hear apartments is good for higher rental than houses? Commercial properties is better than apartments? Land is more high ROI and so on. So, how we decide which type? First criteria I can think off will be your financial status. Choose a type of property that you can effort to buy with your current financial status. Example, can you get a loan and have a cash flow to buy a $300,000 apartments or $500,000 commercial properties? Secondly, I will compare the return on capital vs return on property. How many capital that require from the profit I will earn is more important when choosing which type of property to invest.

Key 5: How long to invest? Short, middle and long term

Do expert investors commenting that if you hold for more longer time, you will get much higher profit when investing in property? What do you think? There is short term investment. eg. flip after purchase within 1-2 years. Middle term investment will be rent out your property for some year then sell it after 2-5 years. And example for long term investment is hold the property more than 10-20 years. The period of the time to invest is very important when you strategy your investment in property. You need to decide first when you start your property investment plan whether is short term, middle term or for long term investment purpose. This is because different plan of period investment have different criteria need to take notes. For short term investment, you need to more emphasize about the capital of investment.

What are others key/ factor need to know before start investment in property? Do you mind to share me yours to help newbie?