Advice for Singaporeans Who Attend Property Exhibitions Abroad
1. It's better to fly to the location to observe before you buy anything. Agents can tell you that the area is "regenerating", or it's in Zone 1, but two things can happen: either the area is in slums (there are many slums in US and UK cities and they are not safe!), or you are over paying for it.
2. Go to the internet and search for similar properties around the area. Chances are they are 10- 30% cheaper. Whatever new property that you buy will eventually turn old so even if your house is spanking new, eventually it will be one of the many old resale houses that you will be putting up for sale. Never buy a property that is based on "future prices", or at a premium over the surrounding area. Instead, try buy something that is cheaper than the surrounding.
3. Beware of hidden commissions by agents. I've attended many property courses and exhibitions. People who conduct the courses buy projects directly from developers, who give them bulk discounts. I've spoken to some of the developers directly by calling them and meeting them in person. They readily offer 10 - 20% discounts if you buy over 10 properties or underwrite them. The agent's commissions could be as high as 10 - 20%! You could negotiate to have some of the discounts passed on to you. It pays to investigate this and you should use the internet to check. Make a call to the developer's marketing agencies. They'll be happy to tell the truth as they could deal directly with you.
Advice for Singaporeans Who Pay Good Money to Attend Property Courses
1. Many of these courses have attractive headlines like, "Buy Properties With No Money Up Front". They merely ask you to refinance your house, jointly invest with others in the course.
2. Guess what? If you're there to learn how to find good properties, you'll usually be disappointed. Instead of teaching you the fundamentals, many of these courses merely persuade you to invest in their projects. The trainers in turn make fat commissions of 10 - 20% on the projects that they sell.
3. Whatever the trainers profess you can learn from these courses, you can easily learn from buying property investment books. Which is cheaper? $1800 for a course or $50 for a book?
4. There are some very good trainers around. I am not saying that all programs are not worth going. Go for courses that teach you specifically some area of knowledge. If you can, take up a Master of Real Estate. It may cost $15 - 25k, but remember, with the skill you could invest far better. Imagine if you followed the trainer and invested in his project, you may have a lock-in period of 3 years and doubled your money. If you had invested $100k, you could have made a profit of $200k after 3 years. The trainer would have earned his management fees, profit sharing fees etc, far more than you! Your return over 3 years is 100%, or around 25 - 30% per year! But for me, I read lots of books, took up proper certifications and invested well. For my own property, I invested 100k of cash in July 2010 and it is now $350k in profit. On top of that, I collected $100k of rental! My total return is $450k for 100k of investment. That's 450% over 2 years or 220 - 240% per annum!
5. There is no substitute for hard work, lots of reading, lots of detailed analysis. Never trust someone who proclaims himself/herself an expert. Trust is gained over many years and many tests! Have a successful investment career.
