Each generation comes of age during different country policies and economic circumstances, and this can have a major impact on their financial habits.
But, there are so many options like stocks, fixed deposits, jewelry, mutual funds, and antiques. Now the question you have in mind is, what should I invest in?
Most investors would say, property is the best investment in the world. Why? Here are reasons why Gen X and Gen Y should invest in a property.
Tax Benefits
Incentive to invest in property is the tax advantages. The Real Property Gains Tax (RPGT) in Malaysia states that you no longer need to pay tax if you decide to sell your property, after 6 years of ownership (individual category). For other categories, may refer to Lembaga Hasil Dalam Negeri.
Individual Category
From the period of 1.1.2014 until 31.12.2018, disposal in the sixth year after the date of acquisition of the chargeable asset is nil.
From the period of 1.1.2019 until 31.12.2021, disposal in the sixth year after the date of acquisition of the chargeable asset is 5%.
For the period of 1.1.2022 and thereafter, disposal in the sixth year after the date of acquisition of the chargeable asset is changed back to nil. While RPGT rate for other categories remained unchanged.
Besides, should you decide to keep it, you can lessen the rental income with other deductible expenses such as:
Mortgage’s interest
Repairs for the house
Agent’s commission
Continue Your Current Lifestyle
Sometimes, Gen X and Gen Y are afraid to step into property investment because they believe that they will need to give up their current lifestyle. However, that is not 100% true. When you decide to invest in a property, you may live in that property and you could even rent out a part of your property and use the income generated from this to cover the mortgage and keep up your lifestyle.
For instance, a condominium with 3 bedrooms, you may live in the master room and other rooms could be rented out.
Build Equity
If you do your research carefully, property may build a good amount of equity over time, when you buy a good property. Then, you may use this equity to invest in another property. You can find a good property deal by doing research, area inspection, speaking to a good property agent, and together you can create a plan to build your property portfolio to achieve your financial goals.
For Next Generation
Property prices instantly increase. Our next generation probably could not afford to own a house in the future. The best choice is, you buy a property now, and leave that property to the next generation.
Ready Your Retirement
Most of the Gen X and Gen Y think it is too early to start thinking about retirement. So, is it too early to plan your retirement? The answer is ‘’NO’’. It is never too early to start planning for your future.
For instance, you buy a property worth RM 300,000 today; after ten years the value will probably go up and it would be worth RM 600,000 and after another ten years it will go up even further. If you buy later, the property you buy will be more expensive.
The advice is ‘’The sooner you enter the property market the sooner you can start building your wealth as an investor.’’ It will also give you the opportunity to build a larger investment portfolio which you can put towards your retirement.
Investing in property offers you with many opportunities and provides a good platform for you to prepare yourself for your future. You owe it to yourself to better your future prospects.
Our team can guide you through all processes in investing in commercial and residential properties, from understanding your goal for the purchase, understanding investment site attributes, and closing the deal. We can also help you in determining the right time to buy, the right location to look at, the percentage of return on investment, and any tips on buying or selling properties. We are constantly watching the real estate rental market, conditions, and trends.
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