‘Go for auctioned property, rent-to-own or landbanking’
Property investors should opt for alternative investment strategies during this property market slowdown to get better value and returns.
Property consultant Warrick Singh said this was because conventional strategies, like buying properties in the secondary or primary market, would not offer investors the best value.
He said the property market cycle influences the difference in value and price. High value low price indicates time to buy while low value, high price indicates time to sell, he added.
“Different property cycles require different strategies. When the economy is on the rise, it is okay to go for conventional strategies because the price would be higher than its real value in the future. So buy now, sell later when the price is higher.
“But with the current economic climate, the price of a property is higher than its value due to high rejection rates among buyers. So, conventional strategies will not work. You could be forced to hold the property longer than you expect.”
Warrick said alternative investment strategies include buying a house at auction, renting to own and landbanking through group purchase.
“There are around 70,000 auctioned properties in Malaysia.
“You can get as low as 70 per cent discount, even at hot spot areas.
“The renting-to-own strategy does not require capital to get involved. If you need to hedge against inflation, landbanking would be a good strategy. Get a few partners to join in to decrease the cost of capital.”
Moderator Elizabeth Siew (right) introducing MyRumah panel speakers (from right) Ray Chung, Danic Pheh and Warrick Singh yesterday.