When it comes to buying a property for investment uses, you need to purchase the right property in the place and at the right price, to ensure you achieve some sort of capital growth. Capital growth means the increasing in a property’s value over a period of time and this is why most people invest in property.
In order to succeed in property investment field, the first you need is having a right investment strategy. In today, we will share you the top 4 common property investment strategies in Malaysia. You can make this article as your reference, and pick one that suit you the most.
➊ Buy & Hold + Rent
The buy and hold strategy is more commonly sought out by the capital growth seekers. This strategy contain lower risk for newbie investors. It involves buying a property, holding onto it for the long term, generally 5 to 7 years. The investors will rent it to the tenant, as they can earn a passive income during the holding period. The goal of this investment strategy is to generate positive cash flow above your carrying costs such as bank loan, management fees, maintenance fees, insurance, and etc.
➋ Buy & Fix + Flip
This is another popular investment strategies in Malaysia. However, its risk is higher than buy & hold +rent. This strategy involves buying a property at below its market value, spending on renovations/ remodeling over a period of weeks or months , then resell it at higher price. This is kind of quick profit in property investment field. Although it generate a massive profit once it successfully sold, but its risks are unpredictable, since it needs some time to run the renovation works, you cannot predict what will happen when the renovation is complete, you can’t even know what will happen tomorrow. Therefore, do your research and due diligence is a must!
➌ Buy & Renovation + Rent
This strategy is something of a combine of buy, hold and rent and fix and flip. You can either fix and resell or fix and rent out at higher rent. The investors usually will buy a property at below its market value, do some simple renovation and then rent to the tenant at a little higher rent. Just imagine that, a property with no flooring and no any home accessories price at RM 600 versus a property with flooring attached with home accessories like cabinets, sofa, water heater, kitchen accessories and etc, price at RM 800. Which property will you choose?
➍ Pre-con Condo
This strategy involves buying a condominiums at pre-sale (the earlier in the sales process, the lower the price). You can either holding onto it and renting it out once it’s complete, or selling it before construction wraps up and the building is registered – what’s knows as “selling your assignment”.
Which one investment strategy that meet your investment portfolio? You’ll need to pick one that can help recoup your capital costs in long-term. Be wise to choose your investment strategy and let the property work for you.