TIPS already has better advantage. Always watch out what you say. So try not to brag especially on social media platforms such as Facebook. You might assume the rules of property flipping apply to everyone but you due to something called “I-am-different effect” by telling all your stories or bragging of your success. You might hear about studies of people not being as great at investing as they think they are, but you do not think that applies to you. Avoid falling into this trap by consciously looking to consider the opposite of what you think might be true. If you think flipping a particular house would make a huge profit, look for evidence that it will not.
10. YOUR GUT TELLS YOU OTHERWISE
one is financially overstretched: • •
Pay no more than 30% of household income for home mortgage Keep instalment of investment property lower than 60% of income generated by the property
This rule can also be applied to property flipping with slight modification. If you are buying an incomplete property which is not generating any income, it should be considered as part of your existing home mortgage. In other words, total instalments for both your existing home and the uncompleted property should not be more than 30% of your household income. Otherwise you can consider yourself overstretched.
9. YOU ARE OVERCONFIDENT
People are overconfident in just about everything. Because of some previous successful investments, you might think you know more than the market about a particular deal and invest heavily in it. What you might not realise is that others in the market
Investing in real estate comes with a lot of fear, but with a few tips you can easily overcome it. However, if you have an overwhelming sense of fear about purchasing a property, then you probably should not have started it. You should acknowledge that there is a possibility you are in over your head if your instinct constantly tells you that the deal might not work out well. One typical symptom is you do not dare to tell anyone about the deal you are going to dive into.
WHAT WARNING SIGNS HAVE YOU SEEN BUT PERHAPS IGNORED? As REHDA has discovered also, some 31% of properties in the RM500,001 to RM1m range were still unsold after completion in the past three years, largely in more popular property markets like Selangor and Johor. For properties in the price range of RM250,000 to RM500,000, 34% of the completed units were unsold, located mainly in Perak and Pahang. So which way would you think the price of property will go? Well, it is up to you to speculate, isn’t it? But before jumping into any flipping deal, if you have noticed any of the above signs, please make sure your insurance can cover you against highprobability, high-cost man-made disasters.
ABOUT THE CONTRIBUTOR KC Lau is a serious financial educator. He has published 6 books and co-created a dozen online financial courses. Dr Ong Kian Leong is the master trainer of online property investment course Property Method and a property blogger. Both KC Lau and Dr Ong are co-founders of Property Method.
www.propertyinsight.com.my
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