16 November 2011

Things to Take Note when Investing Auction Properties

I believe that many people like to buy an assset with lower price, regardless whether it is stock or property. There are higher chances to buy a property with lower price through auction. According to my dear net friend, there is something to take note when you wish to invest in auction properties:

Let say you had successfully tendered the auction unit:
  1. You need to settle the balance with bank within 3months
  2. You need to pay the fee to aunctioner
  3. You need to bear the stamp duty and so on
  4. If there is any caveat issue, you need to settle it yoursel
  5. If there's any outstanding fee payable to authority you also need to settle
  6. Even after u fully setlle the balance, if the occupant not willing to moveout you need to go through legal application.You can apply court order, but if he still unwilling to move, you can then apply police assistant (Make sure the occupant does not burn your house later, hahaha)
What I learnt from my friends through gathering is that, if you wish to buy an acution property, you can go through several ways - Property Agents, Bankers, Lawyers and other networking. Normally a good property could be sold off before an auction, so the more people you know, the higher chance you will get the property you want to invest.

Another thing to consider is the time horizon. One of my friends who bought a land near Tampoi at the price of RM180K 15 years ago now could be sold off at near to RM2.0M. He prefers to invest in long term (Capital Appreciation) instead of Rental Yield as his invested capital is huge compared to the normal retail investor. For retail investors, they would normally opt to buy property with high ROI (the ROI could be counted as (yearly dividend - yearly expenses / invested capital)). Make sure you know your risk and return profile before entering investment so that it would not cost you million of dollar just to buy a lesson from that.

1 comment:

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