Buying Property 2 - what my uncle told me
My uncle is a very successful man. He retired as a CEO and is now sitting on the board of directors of a few companies due to his expertise.
So when I told him I was looking for a place to buy, he gave me some advice and to be sure, I listened!
He said that first, you have to work out what you can afford. Sounds simple and basic common sense, right? But don't be surprised that a lot of people never do that, then get themselves in Heap Big Trouble, Kimosabe when the bills start adding up.
THEN, he said, after you've figured out what is affordable, you should stretch yourself (!) and try to buy something a little bit beyond your capability. Now that is counter-intuitive to what he just said earlier, right?
So I was like, duh?
And he was like, there are 2 reasons: Firstly - you are very unlikely to be 'in love' with a property that is 'affordable' (mind you, this only applies to the purchase of your home, not investment property), so why make yourself feel like you have compromised yourself and be miserable in a home you only just LIKE but not LOVE. Okeeyyyyy....
Secondly, if you purchase a higher end home, chances are when you decide to move on eventually, the capital appreciation is going to be a lot more substantial because of the better location etc.
Plus, he said, young man, having a bigger committment forces you to perform better to earn more money and progress faster in your career.
Wah, I thought, dig myself a bigger hole so that I work harder to climb out of it ah?
But upon reflection, what he really meant was to set myself a more ambitious goal lo...
Ok lo...
Anyway, the thing is, I had already bought a very affordable place in a decent location, albeit not posh or anything. So he said, never mind, look at it as a stepping stone. You can always do that with your second one.
Phew!
So when I told him I was looking for a place to buy, he gave me some advice and to be sure, I listened!
He said that first, you have to work out what you can afford. Sounds simple and basic common sense, right? But don't be surprised that a lot of people never do that, then get themselves in Heap Big Trouble, Kimosabe when the bills start adding up.
THEN, he said, after you've figured out what is affordable, you should stretch yourself (!) and try to buy something a little bit beyond your capability. Now that is counter-intuitive to what he just said earlier, right?
So I was like, duh?
And he was like, there are 2 reasons: Firstly - you are very unlikely to be 'in love' with a property that is 'affordable' (mind you, this only applies to the purchase of your home, not investment property), so why make yourself feel like you have compromised yourself and be miserable in a home you only just LIKE but not LOVE. Okeeyyyyy....
Secondly, if you purchase a higher end home, chances are when you decide to move on eventually, the capital appreciation is going to be a lot more substantial because of the better location etc.
Plus, he said, young man, having a bigger committment forces you to perform better to earn more money and progress faster in your career.
Wah, I thought, dig myself a bigger hole so that I work harder to climb out of it ah?
But upon reflection, what he really meant was to set myself a more ambitious goal lo...
Ok lo...
Anyway, the thing is, I had already bought a very affordable place in a decent location, albeit not posh or anything. So he said, never mind, look at it as a stepping stone. You can always do that with your second one.
Phew!
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