The property industry in this year is believed to show a bullish indication in second semester - the initial recovery toward the peak. In other words, it's the time to buy for the investors. The time to buy, before the price is rocketed higher, in order to be able to reach a great capital gain later.
Nevertheless, it does not mean that the developer can just take a seat calmly, waiting for a renter approaching. Before the signals of bullish is appeared, they shall have been able to anticipate with the accurate strategy.
According to a stock market observer, Jimmy Dimas Wahyu, there are some issues that shall be considered, such as to ensure that their PREP (product, reputation, engagement and performance) are great.
Please bear in mind, a buyer is a king. Hence, the developer shall approach the buyers (investors). Beside regular gathering, they shall invite the investors to monitor the development process and quality with proper delivery time.
In other side, investors shall be more attentive in selecting the property. The issue is, there are among them who took the wrong paths due to emotions. They have fallen in love with particular property and they could be wrong in buying, too expensive or beyond their financial capacity.
Moreover, an investor needs an expertise in doing assessment for a property. This skill might be gain from 'learning by doing' process, or learning from the experiences of other property investors who have been succeeded like Dr. Dolf De Roos, an author of Real Estate Rich book. Here some of strategies of De Roos that will be advantageous for property investors:
Make sure we will earn money when buying
It relates to a skill of assessing property value. An investor shall understand that a particular property price is profitable or too expensive. This skill is arised from mastership of an investor for a particular area. In example, the general market price a certain property is IDr 1.8 billion. He has earned money if he can buy it in a range of IDR 1.5 billion.
Never mention the figures in advance
In term of negotiation, normally he who initially mentions the figures is considered loose. Let a seller mention the price first, then we bargain. If we submit an offering price first, our price might be higher than expectation of a seller.
Buy from those who are really willing to sell
There are a lot of properties tagged with "sold" label, but actually an owner is not really intend to sell his property. This case is commonly happened if he is only wondering about the price of his property. If you meet such a seller, leave him. Find another property.
Enjoy the transaction instead of the property
An investor shall be persistent to his principal "property shall earn positive cash flow". Regardless how good a property is, regardless how bad we like it, if we cannot earn positive cash flow it is surely inappropriate to become an investment. This is property for investment, not to be occupied.
Buy without or with less down payment
Buying with the most minimum down payment will result higher return. This is one of good characters of property, can be bought without cash payment for settlement. There are a lot of payment instruments which we can apply to support the buying process, among others is credit loan from the bank and outstanding payment refer to mutual agreement with an owner. The profit from this less down payment is we can allocate the money for buying other property with the same method. Hence, at the same time we can own several properties with high prices from the money we spend when buying them.
Don't be followers
The property is very influenced by macro economic condition. It has its own cycle. The condition is not always good for property investment. There is a period of time, when you will not gain positive cash flow in certain transaction. Therefore, an investor needs powerful resistance. If an investor is really in love with this property world, loss possibility in certain transaction will not hold him from keep moving forward.
Hold as long as possible
An investor shall be able to hold a property as long as possible. Because it shall be basic character of property: the price will be getting higher, furthermore if it can be kept in more than 10 years. There are a lot cases have proven that within 10 years the property price will be multipled to 500-1000%.
Have a happy investing!
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Author: David S. Simatupang
Author: David S. Simatupang
Printed version published by Property-in Magazine Edition 1 | January 2015
Photo courtesy of Entecheco.com
David S. Simatupang is Editor in Chief of Property-in, the first property magazine in Indonesia which focuses on investment and marketing for property business and provides the comprehensive references to assist and support the investor in taking decision.
