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My last property purchase was back in April 2012, which was more than 8 years ago.

My in-laws used to stay in relative's house. When that house was sold, they were forced to rent a house.

Instead of paying rentals every month, I thought it's better to get a house and pay the loan. 

So I decided to buy a house in the same area of my house for them.

At that time, developer was planning to build apartment priced above RM230k there, and 8-year-old landed freehold single storey terrace houses there were asking for around RM130k.

My instinct told me to grab one before it's too late.

I scanned through Mudah.my and shortlisted one. After viewing the house, decision was made rather quickly.

It was a freehold single-storey terrace house bought at RM148,000. Even though the price was higher, it was fully renovated with extension and also partially furnished.

I got a 70% loan and the monthly repayment was just RM500.

Initially I did not plan to settle the loan quickly to save on the interest, as I wished to save as much cash as possible to invest in the stock market, and as down payment for my next property if there is a chance.

However, starting from year 2018 when I was temporarily away from the stock market, I decided to settle this loan earlier by paying extra every month.

Finally the loan was settled fully in August 2020.

This is a property bought for own stay and it does not generate any income. It's like I invest in a property and fail to rent it out for 8 years!

So, it's a property with super negative cash flow, but is it a good investment?

The total amount of cash I have put into this property is RM186,772, the breakdown as below:

  • Down payment RM44,400
  • Loan repayment RM135,914
  • Stamp duty & legal fees RM6,458

If I include the assessment tax and quit rent up to year 2020, the total amount spent will be around RM188,000.

I'm glad that I didn't think twice to grab this property. Its market price has appreciated to around RM280k~RM300k now.

If I were to sell this house now at RM300k, I'll make a profit of slightly over RM100k even though I do not get any rental income from it.

More importantly, the cash that flow in will be RM300k.

If my in-laws continue to rent a house at RM600 per month, we would have "lost" RM60k in 8.5 years and we still do not own the property.

What money can't buy is that they will feel more secured and comfortable staying in own house compared to a rented house, which I think is priceless.

Would it be better if I invested all the cash in stock market instead of buying this property? Well, may be yes, may be no, I don't know.

However, I still think it's good to invest in both property and stock market.

Stock market might give us a higher return in a shorter period of time. Property market can also give us a high return but it needs more time.

This property forms part of my retirement plan. I hope that its value can appreciate to at least RM500k in year 2030.

While it is my last property purchase until today, I hope that it's not the last property in my life.


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