- March 12, 2019
- Posted by: adrianwee
- Category: 文章 Article
Let’s say you have RM 30,000 in your bank. You walked to the bank and say, “Hey bro! Loan me RM 270,000 can? I want to invest RM 300,000 in stocks.” It is very unlikely that any sane banker will borrow you the cash – what if the stock is not doing well? Who is going to pay back the loan?
But what if you walked to your “bro” and request the money to buy a property instead (taking a mortgage). Then it is for more likely that the bank will lend you the money. Say you want to buy a house of RM 300,000.
If you invest in stocks and let’s say the stock increase by 10%. Throwing RM 30,000 into the stock (since the bank will probably not loan you any monies), your 10% increment is only RM 3,000. If you buy a house (original purchase price RM300,000) and it increase by 10% – that is RM 30,000 in increment. RM 27,000 more!
But why would the bank borrow you money for mortgage, but not for stocks? We will dwell on that in the next point…
Property investment is traditional and is perceived by the banks to be stable. You can liquidate your shares almost instantly these days. Therefore the share market is more volatile. A property needs to be sold before you can get your cash so it is not so easy to get out of the market – thus giving it a sense of stability.
Besides, look at the news these days. How many overnight companies have went bankrupt almost instantly. You went to bed, get up and OPS! Its gone. A property is not the same. You can run, you can hide, but the property will still be there. These days, even if it is burnt there’s insurance coverage.
- Positive Cash Flow
Get a property that is rentable and you will instantly see the return of your investment on a monthly basis. If your property is rentable at 8% of the purchase price then it means not only are you paying off your mortgage, but there is a steady stream of money flowing into your bank account as well.
- Control Over Your Investment
If you are into stocks and bonds, once the price plummets, there is practically nothing you can do except to cry and pray to all Gods in the world that it will go back up. When it comes to property thou – I firmly believe there is always something you can do.
Renovate it. Advertise it. Subdivide it so that it is cheaper. Rent out to a different group of tenants. Anything within your control. Investing in property gives you control and the main point is that you are not going to be a sitting duck when things do wrong.
- Capital Gains
Australians made their riches in a unique way of property investment. As property prices tend to double up every seven to ten years – many investors made their fortune by a “Buy and Hold Strategy.” Their wealth significantly doubled up every decade or so.
Add this to the theory of leverage above – now you know why property investment is such a profitable investment to venture into?
Still need more tips? I will give you the best tips below. It is really common sense.
- God is not here to make more space.
Population explosion in South East Asia countries (especially Vietnam with an ever increasing number of youth) means that the property market is here to stay. There might be ups and downs – just like any other investment – but the pro will always make a killing.
Want to be a pro? Join our “Die With Massive Debts” course and we will coach you and provide you with our hot, sexy, irresistible checklist – the “13 Rules” to buy a profitable property in the market.