have a great monday to all
my friend asked me "how to buy own property for those newlyweds with low income..am asking on behalf of a friend..is it ok to use the govt housing loan that the person entitled or what is the best way..?"
my answer is.. it depends on his / her target.
if he (can i just assume he?) target and plan to have a decent house for own living and at least 1 house for investment (for rental income) to suport his low monthly fixed salary, what he should do is
1. Invest in himself first. Buy books on property investment or financial management or come to any seminars or workshop organised by, for example, Property N Co, Abangensem, Tuanbri, Milan Doshi, Azizi Ali, Gavin Tee, Renesial Leong. This will make him clear about what is going to do and how to do it wisely with minimum risk. Do this continuously and never stop learning.
2. lower down his monthly commitment if the current net salary too low. maybe need to restructure his personal loan or car loan (or maybe sell off his expensive car, maybe persona to a cheaper one, maybe saga to lower down the monthly commitment). The info he get from step 1 will be very helpful.
3. if the nett salary is still low and not enough to get at least a financing of rm60K property, do any part time job to get additional income. use his hobby to generate income is the most preferable.
4. Go straight to this step if he does not have problems as in step 2 and / or 3. Buy one property with positive cashflow within budget (according to his loan affordability and his saving in case deposit needed) and rent it out. Get in black and white thru tenancy agreement. Use info learnt in step 1 to do it correctly. Keep a good payment record with the bank. Make sure payment is not thru salary deduction and it does not appear on his pay slip.
5. Use the positive cashflow income from Step 4 to show to bank that he has another income on top of the low monthly salary so that bank will able to give him another loan to buy the next property. Repeat step 1 and 4 and step 2 and 3 if needed.
6. When his commitment really has been fully utilised and / or bank does not longer want to give him loan to buy property, then only use his government loan. Because, on his salary slip, his salary still clean and he can use the govt loan maximum affordability according to government loan requirements as his last property.
7. When his property's appreciates in value, consider to sell it off. keep the profit from the selling and use it to buy the next property. Since his commitment is now reduced, he may be eligible to get bank loan for the next property.
8. Repeat and repeat and repeat
How about he just want to buy 1 property and to live in it forever and ever? and dont bother about property investment or get additional source of income?
.. hm.. just use the stereotype way.. buy 1 property using govt loan, use max loan affordability and stay in there peacefully..
chances to buy the 2nd property is slim because in his salary slip is now appear monthly salary deduction. Unless his salary is big enough to make him eligible to buy another property.
This may not be a perfect answer because i just use one straightforward method but hopefully it gives you the overall picture in brief.
The choice is on you.
Enjoy my favourite song of Melly - I am not Diva
want to share this lyrics
Ku bukan Diva, aku bukan ratuBagai mahkota atau kembang goyangMaunya mewah maunya yang mahal itu bukan aku