Real estate investment all about timing, says analyst
KOTA KINABALU: Real estate investment, at its core, is all about timing.
A lot of people would consider location as the most important factor when it comes to investing, which is a common misconception, according to Asean renowned real estate analyst, Colin Tan.
There are many investors out there who had invested in the right location but they have done so at the wrong time.
“Real estate is a product. If you do it right, you will be able to make money all the time.
“For real estate investment, people will look at timing. There is right timing, there is also wrong timing. So in understanding the market, it is divided into two types, matured market and emerging market.
“So as I have mentioned, Singapore before 1997, was an emerging market. If you have bought anything at that time, you do not have much to worry.
“So in an emerging market, you can buy property at any time. However, in a matured market, you will notice that real estate prices fluctuate with the economy.
“In such cases, when you are in matured market, the best time to buy real estate is after a crash or during an economic crisis. The best time to sell is when there is a boom,” said Colin, who is also a real estate trainer.
Colin had also stressed that prospective investors should not look at real estate as something that will always go up.
Colin, who has 26 years of experience in his arsenal, cited the city of London as an example, a city which is near 2,000 years old.
“If you take a property price, even from the bottom and compile a 2% growth every year. Today that property will be priced at a ridiculous value.
“This is not true. In fact, in many cases, London’s property prices are lower than some of Singapore’s property prices.
“This proves that you cannot have this mentality where you think that the prices for real estate will always grow.
“This is the sad part, when people are investing with this kind of mentality, no it is always about timing, you buy low, you sell high. It is just like stocks,” said Colin.
Colin had also disclosed that Malaysia is currently one of the best countries to invest in right now.
He explained that Malaysia has one of the lowest real estate prices in the world and it is also relatively developed.
He compared Malaysia to most of the developed countries, where its real estate prices tend to be higher.
“Malaysia has already experienced growth and development. You cannot say that Malaysia is a backward country at all. Yet, its prices are still lower than some of the emerging countries,” said Colin.
Colin further explained that all Malaysia needs now to move further is to have a catalyst.
He said that currently Malaysia has received a lot of foreign direct investments coming into the country.
In advising the youths or newbies who wish to venture into the real estate world, Colin said that the first thing that these people need to do is to educate themselves.
“Total newbies need to be able to analyse their cashflow. Also, as mentioned their timing is vital.
“If they are able to invest in something and they know that they can afford to hold this property even if there is a downturn in the economy; then, by all means do it.
“Buy something that is undervalued. Low valued properties are not always right. Undervalued property could also be a good thing.
“These are opportunities that young people can look out for, but of course they have to educate themselves first and they must not get too emotional.
“You cannot be emotional when you are an investor. Do not follow the rest of the people. You should really stay away from the herd mentality,” said Colin.
Colin was interviewed during the Masters of Success Property Convention 2017, which was held at Ming Garden here yesterday.
The convention, which was organized by Summit Capital and presented by Dreamforce Productions and Malaysia Property Investors Club (MPIC), featured property investment trainers from around the globe.
Among the speakers who conducted talks during the convention were Colin, internationally acclaimed author Jochen Siepmann, master of stocks Senthil Kumar, world’s leading authority in feng shui Master Kevin Foong, property investment coach and best selling author Kaygarn Tan and property millionaire investor Rafael Wong.