What is a Good Property Investment?

Property investors are made up of all kinds of people, some like to invest in residential properties, like apartments, condos, landed properties like terrace houses, semi detached, bungalows or land. These investors normally have their reasons as to what type of properties they prefer to invest in. However, the ultimate objective of their investment to to get maximum return at the shortest possible time. With this in mind one needs to choose the type of property investment very carefully in order to suit one’s objectives and budget.

Of course there are many pros and cons in the type of properties you invest in and there is no right or wrong answer. For instance, if you want a good rental return, you would choose an apartment, condo or a shop. However, if you are looking for good capital appreciation, then you should be looking at landed properties like terrace houses, semi Ds, bungalows, or shops. This being said, your properties must be located in the right location where there is a great demand.

However, one of the best investment one can look at are commercial shop lots. Now, why would we say that? Well, we know of some very successful and savvy investors who have made a lot of money investing in commercial shop lots in a very short space to time. And here is what they have to share with us why?

  1.  No Renovation Required. The tenant will take care of it and the tenant will do their best to keep the shop looking good in order to attract their customers. Of course unless you rent it out to a car workshop,which means you do not need to spend a single cent on renovation. You rent it out as it where is.
  2.  Rental Increment. You can increase the rental without having to worry that your tenant will leave unless they are not doing well in their business. If they have built up their clientele and are doing well, I think they will gladly agree to your rental increment provide the increase is reasonable. Compare this to a tenant in your house or condo; the tenant will always choose a cheaper place to stay unless they like your place so much and wouldn’t want to go anywhere.
  3. Rental Yields. A shop lot usually give you a better rental returns if you have bought it at the right price and it is located in a auspicious and busy location with lots of human traffic such as Kota Damansara and Tropicana.
  4. Capital Appreciations. The capital appreciation of a shop lot can be as high as 35% to even 50% within a year. As an example, a client of our agency  bought a shop lot in Dataran Sunway for RM2 million and sold it for RM3 million in exactly one year. Of course this was during the peak of the property cycle in 2011. Nevertheless, landed property will always give you a better return in term of capital appreciation as land is scarce and getting more expensive especially in the city area.
  5.  Consistent Tenancy. You do not have to worry about getting a new tenant all the time unless their business could not survive. Therefore it would always be wise to find a franchising tenants like McDonald, Starbucks, Speedmart 99 are even better a bank as they will not default on their rental payment.
  6.  Worst Case. You can use it for your retirement business if you should decide not to lease it out.
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