Buying investment property that you rent to tenants can bring reliable cash flow, assuming you have bought the right property.
The question on every investor's mind is: how do you know if the property is right for you and will it be profitable?

Siva Shanker, chief executive officer, real estate agency, Rahim & Co International said there are many schools of thought on this matter and no single one is right or wrong.

Property mantra

The old mantra of location, location, location no longer is as valid as it used to be.

Shanker said if you're thinking about buying an investment real estate, many other things now play a big role in the price of property instead of just location.

"Many other little factors should be taken into consideration before arriving at a purchase price of a property. These include the look and feel, design, branding, facilities available, and the brand name of the developer. You should look at all these things as a whole and not just location," he told NST Property.

When asked if an overhang property is a good buy, he said that it is okay to invest in an overhang property provided the price is right.
Shanker said that landed properties remain a good investment.

Landed properties have always been very steady and saleable items in Malaysia and he doubts that prices will come down.

"Even if it does, it will be very little. If you are planning to buy landed property, make sure the price is right. You should look at buying one now if you have the financial means to do so. If at all there may be a slight price correction, it is going to be very small," he said.

Opportunities in the market

Shanker said that in any market no matter how adverse the market is, there is always opportunity.

"In an adverse situation like this, like what we are facing currently presents an opportunity for the smart and discerning investors," he said.

"No matter how bad times are, transactions in the market never actually go to zero. Transactions will just reduce a little bit. Even during the worst of times, transactions are never zero. There are always buyers, and there are always sellers.

"If you are a smart buyer, and you have saved your money and your cash flow isn't affected by the current situation, you should now bargain hunt," he said.

Shanker believes that over the next few months, more and more people will find it hard to service their loan as they could either have lost their jobs or had a pay cut. To make ends meet, they will put their property in the market.

He said looking at this situation, a smart investor will be able to pick up a good bargain in the coming months.

"Once they have bought the property, they can get a tenant in so there is rental income, and when the market moves up, they can sell it for a profit.
"My advice to buyers is, when everyone is rushing to buy, you should be selling, and when everyone is rushing to sell, you should be buying," he said.

Shanker also advised buyers to do careful research before buying anything and to seek the advice and services of suitably qualified and registered property professionals.

"Most people make the mistake of only doing research when they want to buy and if they do that they will never be able to get a feel of how the market behaves. Whether you are on a buying spree or not, continue your research.

After a while you will automatically have a feel of how the market is like and you will be able to make better decisions.

"Alternatively, get a qualified property professional. The value a good consultant can bring to the table is immense and can be more than worth the fee you may have to pay," he said.