The Property Get Rich Quick Scheme
These days there are so many get rich schemes in the market, and all of them have not really made anyone rich, in fact it has made a lot of people poorer. This is very sad, since the only reason people get into these things is to make their already hard lives just a bit easier “if” they get rich. The promise of being rich is very attractive, with everyone thinking “if” only I could be so lucky to make it big fast, I would definitely be very happy!
Well, is property investment the same? Yes it is. Property Investment, Stock Investment, any sort of investment is all some sort of a scheme. And every one gets into it to get rich or richer someday. But does it work?
For me only property investment works, why? Because I eat, sleep, talk and dream about properties only. This has been an interest I noticed since I was a primary school child, I wasn’t thinking of property investment but I was so interested in the developments that I eventually bought into some of the properties I grew up wishing I had.
In the recent times when the property market has slowed down, a lot of people have been hurt and burnt very badly by it. I have seen some very bad cases. So to these people, the property market is a get rich scheme. But to me, it is just a downward cycle, which I was prepared for and am taking opportunity of.
I’ll give you an example of a project I bought into in Iskandar Malaysia, Johor in 2013. Yup I bought into the Iskandar region and this is the best example because everyone is saying the whole region is dying and most people are losing money there. So in 2016, when the developer called me, and told me that it was time for me to collect the keys to my 2 units I had bought there, I was worried.
However, I knew I had to bring in all my knowledge and skills to make this work. And guess what? In 45 days both my units were rented out, to some very good tenants who are staying there until today, and pay all rental before the due date! (Actually 45 days was slow by my normal standard, which is 30 days)
In this same project, I know other owners who got tenants only after 6 months, and are having so many problems that they keep complaining about the project. That is the exact opposite of my situation.
What did I do differently?
- I knew my targeted tenant and their budget. As my unit was a 2-bedroom unit, the targeted tenants would be single or couple and from overseas or out of town, who come to Iskandar region for work.
So this means that I need to fully furnish the living area and one bedroom, because they wouldn’t want to invest in the furniture nor would they have their own.
The second room was not furnished, because they wouldn’t need it, so I don’t have to waste money. Instead, they can use it as a study or store as they choose.
- I knew the composition of investors and owner occupying the building.
This is important because if more are taken up by investors, then you will have more competition to rent or sell the unit at the time of vacant possession (VP).
This meant that my units needed to be the first units available fully furnished in the building, if I were to capture the higher rental clients. Hence, the furnishing must be done before I get more competition.
I rushed my furnish and electricals (all purchased in one day from 5 different shops), and my unit was already fully furnished so fast, even the agents there were surprised that I had it up and ready .They all loved it because I had what their tenants were asking for.
It all comes down to the basic questions, do you know what you are doing, and why you are doing it? I don’t claim to have done all this by myself, I have surrounded myself with the right friends that are experienced and knowledgeable in this industry. This helps a lot.
I have been actually investing in properties since 2004. Honestly, when I first started, I knew very little. In fact, a lot of the things I knew were learned from trial and error. Had it not been for the people that have guided me, including my family members, friends and knowledgeable experts, I would not have gone so far and to become who I am today.
So is property a get rich quick scheme? Not at all, it is a get rich slow scheme, and it works only if you know what you are doing, and do it with the right people. For me the stock market is a get poor quick scheme, but that is only because I have no idea how it works, and the few times I tried it I lost. That is why I stick to property until today!
Look out for my next article for more real hard truths about investing in properties.
Happy Learning and investing!
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