Are you not taking action due to fear of losing?
Buying or selling a property is a big decision for many of us because everyone is fearful of losing our hard-earned money especially when we are making the first move.
For those who have purchased your first property in the past, I am very sure you faced many fears and uncertainties when you are penning down your signature. I can still recall the stress when I was making that decision.
Why do we feel so fearful to make this move? I would say it is mainly because of the lack of knowledge. FEAR has been one emotion that stops many people from advancing to get their private property. This is also the reason why I decided to write about this topic because I believe many people are aware that property investment is the way to build our wealth and to provide the best for our loved ones. You must read on to understand so that you can overcome this inner fear.
For me, I always believe in logic, instead of letting emotion rule me. Many people who have not bought their private property will tell you that investing in private property is stressful, having the need to pay off the high mortgage. Another school of people will say that the property prices will drop with the current pandemic situation.
“Don’t buy, it will drop further” – I believe you have heard such a statement many times from people around you.
Have you ever wondered what is this judgement based on? What knowledge do these people possess to make this conclusion? This is a very important question and we should not fall into such an emotional trap. Here we learned that many people are working hard for money rather than using their hard-earned money to work hard for them. As you already know, working hard will not make you richer.
You might want to compare it to how the bank works. After people deposit their money into the bank, the bank does not only safekeep the amount. Instead, they increase the amount by multiple folds, by making further investments. The same theory can be applied to your investment logic.
As you are reading now, I really hope that you can seriously think about what I have mentioned. I am not here to tell you to speculate and take high risks. This is the last thing we should do. Before buying a property, we can do a stress test to ensure that we are comfortable to pay off. A professional property advisor will be able to help you on this matter. In fact, over here in PropNex, we have our own proprietary software called Risk Assessment Management System (R.A.M) that can help clients to make a better decision by inputting various figures and ensuring Risks are reduced to the minimum before every purchase.
I always believe financial planning is crucial when it comes to buying an asset.
Looking at this article, you will realize that many people make money via property, but the truth is there are people who lose money too. Why is it so? I can tell you that the main reason lies in the lack of financial planning.
Therefore, it is always important to do proper financial planning via the RAM system. Let me share with you a case study on buying a resale property. If you intend to buy a property, check out your loan eligibility first. Based on the person’s income, if he/she can borrow up to $1.278M, how do he/her determine what price he/she should spend on buying? Should this person max out the loan? What are the considerations?
As I would advise – look at your balance in your cash saving or CPF after purchase. Work out the numbers to see whether you have sufficient funds to tie over if you are going to be self-employed or running your business one day. Do you have the spare fund to pay your property mortgage?
Refer above for an idea of the reserved funds after the purchase. In fact, our RAM system allows you to toggle the purchase price and work out the balance fund based on your comfort.
I would emphasize again – One of the main reasons why people lose money is due to the lack of financial planning. All these can be solved when one works out the numbers. Do not let emotion affect you. Let logic work out the numbers before you make the decision to buy a property. Our RAM system below will even show you the best scenario and worst scenario after purchase. It calculated how long it can last you when you are employed or self-employed. With all this planning, your fear can be greatly reduced.
To all the readers, work out your finance first and I strongly believe your fear will be eliminated too. In fact, to me, property purchase is a form of “forced saving”. The bigger the investment, the more you save. Why do I say that? Refer to the example below.
If your property is rented out, your tenant is paying the interest for you. On top of that, they are saving $2,642 to your principal every month. If you look at the one-year figure, it will total up to $31,704. If you put your money in the bank, will you be getting this amount yearly from the bank via your fixed deposit? Even if you are staying in this property, you only pay less than $1,000 to stay in a condominium. Every month, you are forcing yourself to save $2,642 for your house. As I mentioned, all risks can be calculated when you have the right property advisors, using our RAM system.
There are many mistakes when it comes to buying and selling a property. For today, I will be ending here as I do not want to overload you with so many things to read. If you need anything else or wanted a non-obligatory RAM analysis, please whatsapp me +6582828214. I will be very happy to share with you.