Think beyond houses and condos

the majority of people, whenever they think of real estate, it will be of houses or apartments.

Studies showed that the majority of Malaysians only purchased one property in their lifetime - their home. For them, their first purchase remained their home for the rest of their lives.

Of course, there are those who purchase a property but do not end up living there. They opt instead to rent a house for a variety of reasons the main one being convenience.

Sometimes, of course, they can only afford to purchase a smaller property, but are able to afford the rental on a larger property. Perhaps they bought a property that was far from their workplace and, therefore, are choosing to rent that property out and live in a rented house closer to work.

The number of people who become property investors are by far and large, the minority. This is indeed a pity, as property remains the best hedge against inflation.

If you want to multiply your wealth, this investment habit has to start early. If you wait until your 40s or even 50s before you begin your investment journey, it may be too late. You then risk facing the dilemma faced by most Malaysians - complete reliance on your savings in the Employees Provident Fund.

And we have enough statistics to show that this money lasts only for a short time.

The majority of property investors choose to invest in residential properties. Houses and apartments have been the traditional preferred investments. In recent year, the proliferation of serviced apartments has offered another investment source.

Most people who invest in serviced apartments do not realise that these are commercial investments. And a commercial investment attracts commercial rates and taxes. Your quit rent assessment and other taxes will be different from a residential property. Even your rates for water and electricity will be calculated on commercial rates.

And let’s be honest, many of these serviced apartment will not really come with the fullfledged services that should actually be provided in a true serviced apartment.

It’s time Malaysia property investors start opening their minds and consider alternative investment assets. Residential assets are attractive investment assets, but there are other alternatives available. It is a sound investment strategy to have a varied portfolio in your basket.

Last year, residential property sales formed the largest portion in the property market, accounting for a whopping 63 per cent of all real estate transactions. Sales of agricultural lands were a far second, coming in at 21 per cent.

The other sub-sectors collectively accounted for the balance of 16 per cent. We seem to be too top heavy, with most consideration given to residential properties. This has probably been the single largest contribution to the oversupply situation we are now facing.

Too many condominiums have been built in the last few years and the general consensus is that these units, when completed, will not be able to find tenants.

Let’s open our minds and consider alternative investment assets besides houses and condominiums. Happy hunting and may the force be with you.