Properties Investment For 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 percent. 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 percent 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 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 benefited 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. 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! 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.
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.

QUESTION:
Assalamualaikum En Azizi Ali dan Pihak Millionairesplanet,
Pertama sekali, saya ingin mengucapkan jutaan terima kasih kerana banyak memberi ilmu kewangan kepada saya melalui buku-buku dan laporan-laporan yang diterbitkan oleh pihak Tuan. Bagi saya yang baru sahaja bekerja selepas tamat pengajian, ilmu kewangan adalah satu ilmu yang wajib saya ketahui untuk mengurus dan mengembangkan kewangan saya. Sekali lagi, saya ucapkan jutaan TERIMA KASIH. Untuk pengetahuan pihak Tuan juga, saya kerap membeli buku-buku dan laporan secara online dari Millionairesplanet, dan setakat ini, servis yang diberikan tidak mengecewakan. TAHNIAH!!
Kedua, jika diizinkan, saya ingin bertanya dan mendapatkan tip daripada En Azizi Ali mengenai pelaburan dalam BSKL. Saya tahu idea dan tip daripada Tuan ibarat emas yang tidak ternilai dan saya amat-amat menghargainya. Persoalan saya:
1. Sekiranya saya ingin membuat pelaburan, apakah yang harus diberi keutamaan selain daripada figures yang diperolehi daripada akhbar?
2. Masih diterima pakaikah istilah, “Buy when price is low, sell it when it high”?
3. Apakah perbezaannya jika saya melabur dalam First Board atau Second Board?
4. Mana yang lagi menguntungkan dan mencabar?
5. Bolehkah Tuan memberikan contoh buku-buku atau rujukan yang boleh saya perolehi?
Saya mengucapkan jutaan terima kasih di atas jawapan serta tip yang akan diberikan. Saya juga mengharapkan, jika berpeluang, saya ingin membaca sama ada buku atau laporan penulisan En Azizi Ali mengenai pelaburan saham di Malaysia.

ANSWER:
1. Baca sebanyak yang anda boleh. Buku-buku tentang pelaburan saham dan unit amanah adalah mandatori. Baca majalah-majalah dan sertai juga seminar-seminar kewangan.
2. Sudah tentu. Tetapi anda perlu tahu bilakah price is low dan bilakah price is high.
3. Kedua-duanya boleh membawa keuntungan, jika ada tahu apa yang anda lakukan. It is not the investment that is risky, it is the investor.
4. Di antara buku-buku yang boleh anda baca ialah Jutawan Saham dan Panduan Pelaburan Unit Amanah.