It has always been my dream to venture out into property investment. There are many other ways how you can make or lose money out there but I think real estate appeals to me the most. As a fan of Donald Trump's business acumen, I've read most of his books. As he put it, owning a property means you can either 'live in it, rent it, or sell it'.
This year this dream of mine came true - against all odds. Firstly, I haven't started working yet so that means it is difficult for banks to let me borrow their money. Secondly, some banks that I have corresponded with are of the opinion that the property's market value is higher that what it's really worth for. Does it sound like a bad deal? In my opinion, not necessarily.
The property is located adjacent to an expanding university. In a couple of years' time, I project that the demand for accommodation in this area is going to soar. Property prices in this area are going to benefit accordingly. By that time, current circumstances will decide what course of action should be taken next.
The loan for this apartment, priced at RM 1XX,XXX, was acquired through the assistance of my mother. Even so, I take full responsibility towards the monthly installment. Since she is retired, the lending bank is exercising a higher rate of interest than the conventional home loan.
So what's the catch? My plan is to utilize the refinancing cash-out instrument to repay the loan, taken by my mother on my behalf, as soon as I start working. Until then, this property is going to generate a negative cashflow which foreseeably is going to be covered by the refinancing later.
The thing about planning is that you hope there is as little deviation on the part of execution as possible.