Today is a first for me in two ways. This is the first time I’ve been involved in the transaction of a piece of land, and it is also the first time I’ve had a full cash transaction. Ie: cash buyer, and seller has no loans. But today I want to talk about land.
Buy land, they are not making it anymore.
The line above has been attributed to both Mark Twain (humorist, writer, lecturer) and Will Rogers (humorist, social commentator, actor). More than a 100 years later the allure of land is still so evident.
Why buy land?
Hassle free investment. There is no upkeep involved. If you are not using it, just leave it be. The weeds and the trees may grow, when the time comes for you to use it, remove it. If you are selling the land, the new owner will work things out. Your main cost will be the assessment and quit rent. No positive cash flow? Well, the main reason you invest in land is either for the capital appreciation or the plans to use it in the future.
It’s a blank canvas. You can do anything you want with it. You can build your dream bungalow, or your cosy little house. It’s only limited by your imagination (and your wallet). No need to tear anything down, to work around the structure. You don’t have to wonder what to keep and what to take away.
It’s cheaper. Huh? Cheaper? Well, if you go by price per square feet than yes, it is oftentimes much cheaper to buy the land and build your own house then to buy a property already pre-built in the same area. The main factor is of course location. If you have your own business and work from home, then yes, it’s feasible. If you have retired and just want a quiet place to settle down, then even better. There are affordable pieces of land 50-75 km from KL City. Ask me if you are interested.
Less financial commitment. Well this is because you are forced to come up with more money up front before you can purchase a piece of land, and later to build on the land. Most Malaysian financial institutions will loan up to 65% of the valuation price. And the valued price is often less then the asking price. Conservatively it would wise to set aside half of the purchase price before committing to purchase.
The buyer in today’s transaction have a dream. They are going to build a cosy home, with lots of land for their german shepherd to run around. They can already imagine their future home in their mind. Their excitement was evident, and rather contagious I must say. I really do feel happy for them.