How to become a successful real estate investor in Malaysia
To be a successful real estate investor in Malaysia, it requires you to be able to find good real estate investment deals easily. Your job is not to become a closing attorney, a management expert, or a repair person. Use professionals in those areas! This article shows you the top tips that real estate investors should apply to their property building strategies to ensure success when investing. Realtors, appraisers, and banks determine what a property is worth by looking at comparable sales, usually three to five different transactions, of similar properties recently sold in the same neighborhood. Getting a list of comparable prices of properties sold, (and when they sold), for the neighborhood you are considering, and asking active real estate investors in your area what the market is like, will be helpful to make a better investment decision.
What is the ideal market for investing?
There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets, because if the market keeps rising, the probability of selling a property for a large profit increases. In contrast, when property values are falling, more bargains become available. You need to be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a good enough discount to allow for a profitable sale at a later date.
Seek advice
Speak to locals in the area and the other ex-pats before you commit to anything, because you can learn a lot from other people’s experiences. Also seek professional advice along the way from a reliable company that specializes in buying properties abroad.
Shop Around
In every part of the buying process, make sure that you shop around for everything; finding the house, finding the estate agent, seeking international mortgage advice, the local taxes, the solicitor etc. Always make sure that similar sized houses within the local market are being sold for around the same price range. Take your time and ensure you’ve covered every part of the buying process.
Leverage
Leverage is very important for investors because the less cash you put down on each property, the more properties you can buy. If the properties go up in value your rate of return goes up. However, if the properties go down in value and you have a lot of debt on the property, this can result in negative cash flow. Since real estate is generally cyclical, negative cash flow is only a short-term problem and can be handled if you have other income or cash reserves. This makes “Nothing down” investing very helpful to protect against negative cash flow for high leverage investor. If you are a long-term real estate investor, leverage will work in your favor if the markets in which you invest appreciate in the long run, and your income from the properties can pay for most of your monthly debt.
Strategies to limit risk
To limit risk, become educated in your local real estate market first by understanding the large scale trends, from global, down to national, regional, and specific neighborhoods. Research information about different styles of homes found in different areas, from traditional wooden homes, to american steel buildings. Learn about target neighborhoods with the help of successful real estate investors in your area along the way. Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market this month, versus last month or last year. With this information it will help you make better investment decisions.
Exit strategies
Since you cannot predict the local real estate market’s future, you need to have a clear plan in mind when purchasing a property. As a real estate investor, you must know exactly how you will exit the property before you buy it. Have a backup plan or two in case the first course of action doesn’t work. You must know your market and your plan before you begin to invest.
Profit margins
What levels of capital growth can you realistically gain on your property investment, or how much rental income can you generate? Work out these facts and then work backwards towards your initial budget to work out your potential profit margins. Keep the bigger picture in mind at all times to ensure that your real estate investment has good potential for profit.
Think long term
Think realistically when getting into real estate investing. Real estate properties can be a tough asset to liquidate, and you have to keep in mind the amount of money you will have tied up in it. Take a long term approach to your property portfolio and give your assets time to increase in value before cashing them in for profit. Rushing the process can limit your profits, so stay patient and allow your investment to make you some money with time.