How exactly this work?
The easiest part is “just do it” but also the toughest part. 🧐 Let’s start with this simple rule and see what is going to happen if you did one like what I did.
- Getting your budget in place
- Base on your commute convenient
- The apartment from apartments
- Mortgage Instalment is more towards bank interests
- By the time complete the mortgage, it’s doubled.
- KFC – Know it, Face it, Change it.
- The apartment to dream home
1. Getting your budget in place
Well for my very first apartment that I bought back in 2012, with a 30k+ saving I tot I could afford a house for 300k since I got the 10% down payment already.
It took me more than a year to buy my first house. After checking around and getting to know what I need to prepare, it’s not just down payment.
There is still involve with Legal Fee, Agent Fee (Commission), Renovation Fee & so on…
From 300k come down to 130k house, expectation getting lower & lower…
I still remember the date of my first signing SNP is Valentine’s Day of 2012, an apartment price at RM 132,800.00
So, what is the budget for me to buy an apartment of RM 132,800.00?
- 10% down payment = RM 13,280.00
- Agent Fee = RM 1,328.00
- Legal Fee = RM 3,067.00
- Renovation = RM 15,000.00
Total is RM 32,675 for the above. (And this is what I had)
Not Done Yet!
How about the monthly instalment capability and the debt service ratio? (DSR)
I can’t remember how much my monthly income back to 2011-2012, with my low income range between RM 2,000 – RM 2,500 maybe?
I tot 300k property just need to pay approximately RM 1,500.00 only, as I don’t have other commitment besides my car. I could afford it.
Then what? For my range of low income, bank doesn’t want to borrow me money to get my dream home even I am prepared to get my life tougher !
As my income with more than 50% is from overtime as additional income, it is not what bank likes…
———- Get to know more with DSR, read here ———
So my budget changed all my plan and after a year of struggling to get my dream home, I go for job changes and look for career advancement.
Getting my life into nightmares and work really hard without public holiday because I am still working for overtime!
Light in the dark!
I am really not good in the planning and got my life in debts. But this is also what make me different so I could share with you now how a small apartment turn into our dream home.
Debts make rich richer — Let’s dive into how important for the basic thing we need from a small home. So this could be our “prosperities”
Start looking a small apartment for your working convenient, which is base on your commute convenient.
2. Base on your commute convenient
Important rules of Location! Location! & Location!
We can get our home better with renovation and interior design, and it could turn it completely from a mess to a miracle. A miracle that we want to stay in it.
But what if the apartment / house you bought is not convenient for your daily needs?
This is impossible to move it from a place to another place.
So consider the location first, an overall environment with a mess public area is ok because we don’t spend our time there. Right?
Small apartment also lower cost for Luxury Furnished & Fitted which could really feel it HOME when step into it. A great place to stay.
So, get the location first and look over choices from houses to houses, apartments to apartments… Get the cheapest deal mean you got better Budget to renovate and furnish it.
3. The apartment from Apartments
After knowing our location where is convenient for our daily commute, we need to spend time and find out the Best Deal.
Arrange viewings is a must and to really understand more on what we need to repairs and renovate.
Although the best deal might be unfurnished and really in a mess, we can learn from other units which is same layout but Fully Furnished & Fully Fitted.
This can help us understand more how and better accuracy for our renovation cost. To be exact — The total cost for the house.
Fully Furnished & Fully Fitted
Unfurnished & Mess
With two comparison, if the fully fitted unit you love it and all their fitting cost (used but still new) is worth for the different of RM 35,000
Yes, the fully fitted is actually better.
What if you know the RM 35,000 could turn the Unfurnished & Mess to a Miracle & Beautiful Home? ——- Yes, this is one of the best deal instead.
4. Mortgage Instalment is more towards bank interests
Yes, this is true and we gonna pay more interest before we really pay for our principal, a facts that we unable to change it.
So we got many way to save the interest actually and there is “guru” and some kind of system to help you out to save more than 100k interest.
But I personally don’t agree on that to save the interest as it is what we should learn with LEVERAGE ON OTHER PEOPLE MONEY.
First, here let’s say you buy a property with RM 420k as above picture loan calculation, after 5 years, you total payment to the bank is RM 26,410.14 + RM 76,749.94 = RM 103,159.80 (RM 1,719.33 x 60 months)
Property is not for us to speculate and make money, by understanding more with the exact amount you pay to bank, and the exact amount you leverage on Other People Money.
Most of the time by a ten (10) years period, you will see the total “pay” versus the total “gain” is profitable.
Which is mean that you not losing any “rental” by owning your own property. Either the interest too!
This is exactly how majority of people who bought their first home, then eventually they can upgrade their house without fail.
5. By the time complete the mortgage, it’s doubled.
This is something similar thoughts like the above where we talk about interest. This is completely true and FACTS
But what do you think about the property that you bought, after 35 years and what is the property price could be? Think about it.
Can an apartment without any facilities or a flat without car park could raise the price above RM 1mil? Please look at those advanced country as example. The answer is actually a firm one.
Again, by understanding Leverage Other People Money more, you will see how exactly and easy to achieve our dream home in later stage after the “very tough” first step.
6. KFC – Know it, Face it, Change it.
Why and what actually we “FEAR” ?
What I had learned about it is False Emotions Appear Real, so we afraid doing thing “wrong”.
And why the false emotions come to us? Because we lacking of knowledge and don’t know how to handle it.
Guess what? The only way to overcome it is by knowing it, discover the solutions instead of just focus on the problems. Once you know how to face it, eventually without any “special efforts” , fear will disappear.
7. The apartment to Dream Home
Do you upset after reading and continue to read until here, and didn’t find any powerful clues that really help you getting your dream home?
Or actually is on the opposite, you realize what you need to do and the most powerful one is just getting started your first property buying journey.
Yeah! The most powerful clues here is “just do it”
JUST DO IT !
Of-course don’t simply buy ya, buying a wrong property could be nightmares where the property actually remain UNSOLD for more than 20 years.
This is also what we need to understand it correctly with these terms:
Oversupply 👊🏻 Remain Unsold 👊🏻 Over hang
Above three terms is easier understanding but most of our news and learning from public, they love to put thing in “negative segment”
This is something exactly that Rich People want to keep you Poor. See Robert Kiyosaki below.