5 common mistakes first-time home buyers in Malaysia make

[PeppaPig1983 2]

It's perfectly understandable if we make mistakes the first time. But when that mistake is as costly as buying a new home, you'd wish that you'd done a little more homework.

Fortunately, those who have gone before us have put together a list of these mistakes in the hopes that future home buyers won't repeat them. Here are five of the most common and important ones:

1. Not finding out more about the housing developer

It's easy to get caught up checking out a home's design, location, price and payment plans because they seem to be only factors that matter when purchasing a home. What many of us forget to do, however, is to run a check by the developer. In fact, it shouldn't even matter if the developer government backed - governments fail, too, and the chances that a private developer would is substantially higher.

Image via Giphy.

What you should be doing:

• Find out who are in charge. An experienced, reputable management team is strong assurance.
• Learn more about their previous projects. Are their property owners complaining about defects, cracks in the structure, rusty pipes or misleading promises?

2. Failing to consider locations outside the city centre

This one is a balancing act - how much is convenience worth to you? Whatever you do, keep in mind that properties located in the suburbs or just outside the city centre are often A LOT cheaper - and you also often won't have to sacrifice a lot for it either. True, it may be further away, but when you factor in traffic jams and other nonsense, you'd be surprised that there sometimes isn't much of a difference.

Another big plus (if you're buying the property and not just renting) there's a good chance that the property will experience a crazy rise in valuation as the city district grows to encompass your once-cheap-place, thus making it a possible good investment.

Image via www.imoney.com

What you should be doing:

• Check up property prices of the outskirts of the city district. Smaller townships outside of main city districts often offer plenty of amenities (e.g. facilities, shopping malls) while also offering lower prices to attract home buyers.
• Is the property you're looking at properly connected to the city district? We're talking highways and infrastructure that will help you get to where you need to go.
• Find out if the developer has plans to further develop the area which will raise its price valuation (and make your investment that much more profitable).

3. Purchasing a pocket development over a township

Let's clear up some definitions: a pocket development refers to a piece of property where the developer builds houses and nothing else. A township, on the hand, is a developer that builds houses and additional infrastructure and amenities that support the housing project.

In other words, not only will this play to your investment interest but will also mean that anyone living there would have access to a whole lot of "quality of life" extras. No one wants to drive 20km just to buy a meal...

What you should be doing:

• Again, find out the developer's plans and capabilities. Real estate that features shopping malls and sports complexes not only raise quality of life but also your investment.
• Find out if the housing estate is a "gated community". Those security guards at the guard post and patrols are not for show. Usually (again, check up on developer's reliability and trustworthiness).

______________

Need help with your renovation? Find a Reliable Contractor in Johor Bahru

______________

4. Swooping in to buy a house simply because its cheap

Wow, this one is contender for the first biggest mistake home buyers make. Remember the law of conservation? While it may not apply as strictly to buying a home, the gist of the concept stays the same: if something is too cheap to be true, then it probably isn't because the only way to make something cheaper is to (i) cut profit margins, or (ii) cut development costs (e.g. quality, safety) and hope that no one notices.

Further reading: Is your contractor cheating you? How to avoid scamming contractors in Malaysia

What you should be doing:

• Double back and see what other developers are offering with their homes that they're forgetting to mention in their brochure: does the location offer extra niceties like shade, trees, good roads and parking space? Will you LIKE living there?
• How safe is the location? Does the developer have plans to reinforce security in the area?
• How does the home's land area compare to other places? If you bought your home cheap because it's small, remember that there won't be enough room if you intend to have a family in future or bring the folks home to stay with you. Never mind about throwing parties...

5. Biting (or buying) off more than you can chew

The size of your housing loan should not equal your gross salary. It's sad how many people give in to greed and end up buying homes (and therefore picking up home loans) that are above their pay grade.

What you should be doing:

• Know your budget and make sure you're saving after servicing your loans and other costs. This emergency fund should be enough to cover your for half a year.

• Study bank loans before taking them up. Different banks may offer better repayment plans that are easier to service or maybe even cheaper in the long-run.

• Be on the lookout for rebates on offer by developers. You might just get away with not having to pay the 10% down payment for that new home!

How much is the cost of renovation in Malaysia?