When we talking about buying a property, there are 2 types of buyers have different conceptions on property. First type of people define a property as their dream home where they buy a dream home to live together with their families forever. While the second type of people make a property as their money maker where they use their capital to invest in property, and hence earn profit from rent it out and resale.
Apart from that, there are much more different between them both. In this article, we will let you know how a homebuyer and property investor choose a property.
Property Location |
|
| Homebuyers |
Property Investors |
| Personal lifestyle convenience | High density population |
| Peaceful and secure environment/ neighborhood | Hotspots area |
| Quality of living | Upcoming developments |
Entry costs |
|
| Homebuyers |
Property Investors |
| According to their affordability | As low as possible, below market price is the best |
Type of dwelling unit |
|
|
Homebuyers |
Property Investors |
| Depends on the family members | High demand dwelling unit |
| Depends on their married status | Prefer high-rise buildings |
| Depends on their financial budget | Prefer smaller units but have higher rental yield and resale |
Renovation Work |
|
| Homebuyers |
Property Investors |
| According to their lifestyle | As simple as possible |
| Do as much as possible | Fully furnishing sometimes, as can get higher returns |
| According to their financial budget | Only basic renovation works |
Tax Possition |
|
| Homebuyers |
Property Investors |
| Need not to pay any capital gains tax on any increment of home’s value | Need to pay capital gains tax on the profits after deduct the costs of selling their property |
Apart from that, the similarity between homebuyers and property investors is they all are wish to get higher amount (preferably 100%) of bank loan. This is because they can save the 10% deposit of the property selling price.
Last but not least, it is advisable that your first house is for investment purpose instead of for personal use as your first house can become another sources of income for you and you need not to worry its bank loan installments. (This point only applicable for those who rent out the property) In the period of loan installments until the end of the loan tenures, that property always is your asset and your wealth is increasing over time too. Once you’ve earn extra money from your first property, you can consider to buy a second property for either personal use or continue for next investment.
On the other hand, if you buying property for personal use at first, it will becomes your liability which you need to bear its monthly loan installments but fail to give it a chance to generate profits for yourself. Furthermore, this property only be your asset once you paid-off the loan amount, which is 35 years after. So, think about it, which one make more sense for you? Comment at below, let us know what your thought.
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