7 reasons that young people should buy property early, don’t wait for the price drop. I believe most of us know that we should buy while we are young, but still majority of people couldn’t make it.
Here would like to share the 7 reason should buy early, hope it can help you to decide now and not regret later.
1. Property prices only up in long terms
Who willing to buy high and sell low? Simply because of this reason, no one willing to sell cheaper than what they bought, unless get into trouble with their income.
Will you sell lower than you bought?
And the history show us, people who bought for more than 10 years, usually won’t lose money even it sold below market value during bad time.
For a property bought 10 years ago maybe just 150,000, after 10 years today the property price could be 300,000
What do you think if he open for sale below market value at RM 250,000?
It gonna sold within a week!
Furthermore, you buy now with 250,000 and sum up the interest rate after you finish the mortgage is about RM 500,000 after 35 years.
So buy now RM 300,000 (without price drop) or buy later on prices dropped during bad market, it could be same RM 300,000 (with price RM 350,000 dropped to RM 300,000)
Since both way you could get still “expensive”, why not buy it while we are young?
2. Burden is smaller as younger
Usually our burden is smaller when we are younger, example of myself on age 21 – 30, energy and stamina recovery is instantly after a proper 8 hours sleep.
And then a normal person in this age should be no issue with their own health, and majority of their parents still with them with no health issue too. Parents could take care for themselves and some of them (parents) even sponsored for their (adults) car loan.
In the age of 20+ also yet to marriage and committed for babies. In this case, it’s really a great time to save and buy a property.
3. Young is a capital, it called youth when it used; and waste when it not used
When we are young, we got more time which is usually not committed with kids. We also got energy because we get it recover real quick.
This meant very profitable just by buying a property while young. Furthermore we could rent out the extra rooms while we occupied the master bedroom. And the rental income could help a lot on our mortgage repayment too!
Don’t wait until age of 30, you might getting married or already married with babies… Although income is higher but this commitment is equally higher.
4. Money getting smaller of its value.
Not only our Ringgit Malaysia is facing this depreciation issue, currencies around the world also facing this issue.
10 years ago, my income was below RM 1,000 as an electrician could support me and my family and having great savings up to 5 figures…
But today my ex-colleague who still an electrician for more than 10 years, his income increased to above RM 3,000, which is mean I definitely unable to survive if I am still with the job for a family with 2 kids now…
Salary and income increased already, why the money will never enough? This is exactly “inflation” around the world in every corner.
5. Monthly instalment remain for 35 years.
MALAYSIA’S salary increase across key industries for 2020 is expected to grow steadily at 5%, while the inflation rate is projected to increase to 2.4% from last year’s 0.9%. Based on Mercer’s 2019’s Total Remuneration Survey, the shared services and outsourcing industry is… Read full
When we get our mortgage today, the monthly instalment amount is actually locked together with the BR (Base Rate explanation), even on the 5th year we just need to pay the same amount.
Example on a property of RM 400,000
|2019||RM 4,000||RM 1,850|
|2020 +5%||RM 4,200||RM 1,850|
|2021 + 5%||RM 4,410||RM 1,850|
|2022 + 5%||RM 4,630||RM 1,850|
|2023 + 5%||RM 4,861||RM 1850|
Hope you could see a property is a great tools to hedge against inflation on this chart and decided to buy earlier now than keep waiting…
6. Get the needs first, dream home later.
When talking to buy a house, I believe majority including myself eagle for “dream home” which is something big and strategic located for works and easy for kids to go for school. (Daily needs)
Actually it’s not right, because we should look on our financial side with proper planning on the spending, don’t get a “dream home” but troubles chase after it.
By getting a small house first, as what we needs and this property will also according to the market value grow, after our financing control is better and able to spend more, then upgrade to a bigger house is easier.
7. The maximum loan tenure up to 70 years old.
Currently, the maximum loan tenure is 35 years or until the borrower turns 70 years old, whichever is earlier.
This mean that if you get your loan by 25 years old, you can get a 35 years loan tenure, and this could get you easier with smaller amount of repayment. Also loan easier for approval.
Then what if we getting loan by 40 years old? Mean we only get maximum of 30 years loan tenure, once shortened the tenure equivalent raised the amount of repayment.
Higher repayment while elder age, the property price usually grow faster than increments, it’s way too much difficult to get a loan.
8. Don’t have 8th already
I keep it for 7th because it’s my lucky number 🤗
I am Cheston Choo, your comprehensive property guides on demand.