Mar 9, 2010

Property investment: Opportunities at property auctions

---

While property auctions used to be looked at with disdain, the situation has changed in recent years. The proclamation for sale notices in newspapers used to be small and almost inconspicuous, but today they are in full colour and often spread across three to five pages.

So, what brought about this change? I believe that the public has woken up to the fact that they can get good deals from property auctions. For example, a few years ago, I bought a double-storey link house in Subang Jaya at an auction for RM220,000 and then sold it seven months later for RM280,000. A few friends did even better. One bought an apartment in KL worth RM180,000 for just RM96,000 and another bought a house worth RM350,000 for RM240,000. These are just a few examples that I know of. There are certainly more exciting and grander stories out there.

So even if you have never considered property auction, you do some research on the subject matter. The potential of making money from property auctions is indeed there. However, there are many aspects that you must first learn before venturing into property auctions.

Firstly, there are hundreds of properties being auctioned every month. In other words, the supply is huge, but there will be some gems among them. You can locate details of property auctions from newspapers and the Internet. Turn to the classifieds pages in the newspapers, and you should find the proclamation for sale notices. As for the Internet, you can check updated property auction listing in this website or do a quick online search on ‘property auctions Malaysia’ and hundreds of links will be displayed.

You should always bear in mind two key factors below before investing.

• Price
Always compare the market price to the auction price as a property being auctioned at the market price isn’t an ideal investment. You might as well purchase that said property from the open market as there will be less problems that way.

• Location
If the property is in a poor location, you should not invest in it even if it is available at a low price. There is much truth to the saying – location, location, location. You might’ve purchased it for a bargain, but if there are no buyers, the price could remain low for a long period of time.

Usually, there are only about ten percent of properties from auctions that you can consider. While the percentage is low, the numbers is certainly adequate. For example, ten percent of two hundred listings is twenty. Surely there are one or two good deals from that number.

Return to this website soon as I will be revealing more tips in the next article.

http://starproperty.my/PropertyGuide/Finance/2886/0/0