ASKING SEAN #36 | INVESTMENT CONCEPTS FOR FIRST TIME HOME BUYERS

In today's episode, we will address a common mistake that many first time buyers make. The mathematical calculation tells us that after we pay up the 30 years loan for a house, it will cost more than double with the interest. Then why should I take loan as it's more expensive?  The first concept we need to understand is LEVERAGE. The concept is to use the least cash to get a property, and then leverage on time as the property will increase in price. Then when you decide to cash out and sell the property, the difference shall be your return on investment. Real estate is one of the only asset that bank will lend you 90-95% to buy, and this is an opportunity to do so. Using RM3 to make RM100 is more sensible than to make RM 100 using RM 100 or more.  The next concept is WIN-WIN. Why should we be concerned about banks making money when we are also making? They need property investors like us, and we need them to invest.  Last concept is TIME VALUE OF MONEY. The same RM 100 today in 2020 will have a different value in year 2030. So even if you work super hard to save up enough money, the value depreciates further. That also explains why property prices go up year by year=)