Making Money Investing in Real Estate
Making money in real estate is often perceived as a get rich quick scheme, and it’s really not that way. Just like any other investment, real estate is an investment that must not be entered into lightly.
No matter the amount of money you sink into your real estate endeavors, never forget that you could lose it just as easily as you invested it, just as with any other investment.
The most common means of investing in real estate is through rental properties. Many people will buy properties, fix them up (or not, lots of times) and then turn around and lease them to others in exchange for a monthly rent.
It is important to keep in mind when leasing properties that if people could afford to pay certain amount a month for their housing expenses, they can also take out a mortgage themselves by taking advantages of all the incentive offered by the government. Thus, decreasing the needs for rental properties.
In order for the rental market to continue, rental rates must be reasonably priced. You can base a fair rent off of the value of the properties in the surrounding neighborhood.
Calculation of returns should be based on the nett income after you minus all the expenses involved.. For examples : Cukai Tanah (Quit rent), Cukai Pintu (Assessment)…etc. For non-landed properties, the Maintenance Fee and Sinking Fund payable to the management of the property should also be taken into account. Lastly, don’t forget to add in the cost of repair and the cost of upkeep of the property as well as the agent fee involved as part of the cost.