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Thread: Anatomy of a good home buy

  1. #1
    mr funny is offline Any complaints please PM me
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    Default Anatomy of a good home buy

    http://www.straitstimes.com/Invest/S...ry_495905.html

    Feb 28, 2010

    small change

    Anatomy of a good home buy

    The key to making a savvy property purchase lies in these seven common sense basics

    By Annie Lim


    I am no expert when it comes to investing in property, but as I have invested in numerous properties over the last decade, I have gained some valuable experience.

    I made money from some and lost money from others. Some say you need luck to make money in real estate, but I believe there are some fundamentals that one can use as a guide to make as infallible a decision as possible.

    1 Good location

    In property selection, particularly for investment purposes, the key is location. For owner-occupied properties, location may be less significant as individuals have different preferences. Some like

    quieter locations away from commercial activities while others choose to be close to specific amenities.

    Proximity and accessibility to schools, transport lines, shopping centres, factories and specific suburbs are some important factors to consider.

    Even for an owner-occupied property, it is important to consider how other people would view the location should you decide to sell it one day. In short, try to be as objective as possible when it comes to location.

    2 Good site

    Is the property in a good site? Is it next to an MRT station, bus stop, monsoon drain or power cables? Or is it at a T-junction? There is nothing technically wrong with T-junctions, but some people believe it obstructs the flow of good luck in one's life.

    Is the site prone to flash floods and so on? Many people like to live near MRT stations, but some foreigners prefer to avoid the constant noise of the trains. They may prefer quieter areas.

    When choosing the site of the property, consider the points that will appeal to your potential buyers in the future.

    3 Good layout

    Do you like the layout of the apartment or house? Many people prefer their living rooms to feel spacious. Are there many angles and nooks in the house? Some people may consider them bad fengshui.

    A more practical consideration is whether the living room and bedrooms are irregularly shaped, with lots of unusable space. A good, clean layout will save you the time, effort and money that you otherwise would have to spend on redesigning around oddly shaped and oddly positioned living areas.

    4 Good address

    Securing a good address without paying a premium for it is like a windfall. It may not matter much to you now but a good address, such as a nice sounding road name or an auspicious sounding unit number like #08-08, may attract more interest and demand in the property and also a higher price when it is time to sell.

    5 Good history

    Many potential buyers like to know the background of the property they are buying. Who are the current owners? Why are they selling? Who built the property and how old is it? Is the property owner-occupied or rented out? These things matter in the making of personal and economic decisions.

    If the property is for investment, then the purchaser should look into two other areas:

    6 Good rental yield

    What is the expected rental yield for the property? Is this an acceptable level for you? What is the median rent for properties in that area?

    7 Good potential for capital appreciation

    What is the median price for property prices in that area? What is the highest and lowest price for properties in that area over the last three, five and 10 years?

    The writer is managing director of mortgage consultant Global Creatif Financial. The views expressed are her own.

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    Quote Originally Posted by mr funny
    1 Good location
    2 Good site
    3 Good layout
    4 Good address
    5 Good history
    6 Good rental yield
    7 Good potential for capital appreciation
    Then will the price also be Good?

    Quote Originally Posted by mr funny
    I made money from some and lost money from others. Some say you need luck to make money in real estate, but I believe there are some fundamentals that one can use as a guide to make as infallible a decision as possible.
    Yes, there are " fundamentals", and it's called Propertism.

    She would not have "lost money" if she didn't sell her properties.

    Propertism Rule No. 1 - Properties should only be bought. Not sold. Property prices will always go up in the long term simply because paper money will eventually lose all its value.

    The statement "I made money from some and lost money from others" shows a typical misconception that somehow a person can predict property market fluctuations.

    The only thing we know is that the price of properties (and anything that has a limited supply like old Batman comics) will always go up in the long term relative to the value of paper money (which has an infinite supply).

    Believing in supernatural prediction abilities is one of the weakest human traits around.

    If such ability exists, there will be no real estate analysts or professors, because they will all be billionaires.

  3. #3
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    Default Fundamentals

    Quote Originally Posted by jlrx
    Then will the price also be Good?



    Yes, there are " fundamentals", and it's called Propertism.

    She would not have "lost money" if she didn't sell her properties.

    Propertism Rule No. 1 - Properties should only be bought. Not sold. Property prices will always go up in the long term simply because paper money will eventually lose all its value.

    The statement "I made money from some and lost money from others" shows a typical misconception that somehow a person can predict property market fluctuations.

    The only thing we know is that the price of properties (and anything that has a limited supply like old Batman comics) will always go up in the long term relative to the value of paper money (which has an infinite supply).

    Believing in supernatural prediction abilities is one of the weakest human traits around.

    If such ability exists, there will be no real estate analysts or professors, because they will all be billionaires.
    It is common opinion that ppty prices will always go up in long term.

    This is generally true provided there is no manipulation going on. You take the US subprime situation. Instead of prices appreciating at a fair rate the prices went up way too fast and not supported by fundamentals.

    So my view is that I agree with jlrx that property prices will always go up in the long term provided the market is not artifically manipulated by certain people or speculators.

    Agree? Any opinions on this.

    So my question is - do you believe the mkt is fairly priced now or is it manupulated.
    Last edited by Localite; 03-03-10 at 11:21. Reason: typo

  4. #4
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    teddybear is offline Global recession is coming....
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    Private properties are market-priced as there are many suppliers (aka developers) and buyers are buying on their own free will (they have much cheaper alternatives such as HDB flats). The government policies so far do not dictate prices, just to ensure that the buyers are genuine (not flippers within 1 year) and they can well afford it.

    Quote Originally Posted by Localite
    It is common opinion that ppty prices will always go up in long term.

    This is generally true provided there is no manipulation going on. You take the US subprime situation. Instead of prices appreciating at a fair rate the prices went up way too fast and not supported by fundamentals.

    So my view is that I agree with jlrx that property prices will always go up in the long term provided the market is not artifically manipulated by certain people or speculators.

    Agree? Any opinions on this.

    So my question is - do you believe the mkt is fairly priced now or is it manupulated.

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    Quote Originally Posted by Localite
    So my question is - do you believe the mkt is fairly priced now or is it manupulated.
    The ability to answer this question is:

    1. The Holy Grail that every property investor seeks, similar to the Elixir of Life, but can never be attained.

    2. The Illusion (spelt capital "I") that every conman will try to exploit, similar to those Options Trading Seminars, and that generates nothing but lots of cash for the conman himself.

    At any instant in time, such as now, there is no way we can know whether the transactions are fairly priced, above, or below.

    We only know with the benefit of hindsight, e.g. the US subprime.

    Otherwise, how could GIC, which according to MM Lee are run by talents each paid more than $10 million p.a., sink US$5.4 billion into New York's Manhattan's Stuyvesant Town and Peter Cooper Village, which went bankrupt?

    I know some very smug people here, as well as on other websites, like to laugh at GIC, saying how stupid it is to buy New York real estate just before the subprime crisis; but these smug people are laughing only with the benefit of hindsight.

    Without the benefit of hindsight, the only thing we can depend on is Propertism - the belief that property prices will always go up in the long term simply because, like old Batman comics and Van Gogh paintings, their supply will always be less than that of paper money which be printed at will by governments the world over who have no discipline in managing their own finances.

    Therefore, without the benefit of hindsight, there is no way we can tell whether a price is fair or ridiculous.

    Look at the 1981 Straits Times FOCUS Report on property prices, commenting that 1981 prices were "RIDICULOUS PRICES".



    Propertism Exam Question

    Which of the properties below that appeared in the classifieds on21 Apr 1981 has "RIDICULOUS PRICES"?

    a. 2,400 sq ft Chen Yuan Apartment (the former site of Urbana at 1 River Valley Close) asking $800,000 or $333 psf.
    b. 2,700 sq ft Mandalay Court in District 11 asking $585,000 or $217 psf.
    c. 1,516 sq ft Faber Garden in Thomson area asking $450,000 or $297 psf.
    d. All the above have "RIDICULOUS PRICES".


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    Quote Originally Posted by jlrx
    Then will the price also be Good?



    Yes, there are " fundamentals", and it's called Propertism.

    She would not have "lost money" if she didn't sell her properties.

    Propertism Rule No. 1 - Properties should only be bought. Not sold. Property prices will always go up in the long term simply because paper money will eventually lose all its value.

    The statement "I made money from some and lost money from others" shows a typical misconception that somehow a person can predict property market fluctuations.

    The only thing we know is that the price of properties (and anything that has a limited supply like old Batman comics) will always go up in the long term relative to the value of paper money (which has an infinite supply).

    Believing in supernatural prediction abilities is one of the weakest human traits around.

    If such ability exists, there will be no real estate analysts or professors, because they will all be billionaires.
    I always find your words "enlightening"

    Am starting to practise optimism & propertism especially when money in the bank is near to zero value now.

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    Quote Originally Posted by Blue
    I always find your words "enlightening"

    Am starting to practise optimism & propertism especially when money in the bank is near to zero value now.
    I'm glad that you have seen the light in "Propertism"!

    Money in the bank only gets more and more worthless.

    You realise that when a 10 cts comic book now costs more than US$1 million!



    Batman comic fetches US$1.075 million, rewrites record

    A 1939 comic with the first ever appearance of masked crime fighter Batman sold at auction in Dallas on Thursday for a record $1.075 million, said Heritage Auction Galleries.

    Propertism Exam Question

    Please explain why the following headline is not possible?

    10 cents buy 1.075 million Batman comics, rewrites record

    1,075,000 comics printed in 1939 with the first ever appearance of masked crime fighter Batman sold for 10 cts at auction in Dallas on Thursday, said Heritage Auction Galleries.

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    What I meant was that all my savings have gone into property investment, and there's no money left in my bank....so I hv no choice but to practise propertism & optimism, hoping prices will really go up up in future.

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