Wednesday, October 8, 2008

About this Blog

Real Estate Investment Tip: Don't put all your eggs in one basket

I know of a friend who works in the real estate industry and who owns 3 properties, 2 of which are still on mortgage. I asked him why he put all his eggs in real estate. He said property will always appreciate in the long run and with the IRs coming blah blah blah .... He also thinks that working in the real estate industry gives him the upperhand in understanding market movement.

I tried to tell him that no matter how sure he is of his real estate investment, diversification is important to reduce his risk. He'd hear nothing of that.

"Stock market is too risky," said this friend of mine.

"But what make you think real estate is less risky?" I said, "You can buy just a few thousand dollars worth of stocks.. money you can afford to lose but your real estate investment is heavily leveraged and if you run into cash-flow problem, you're going to lose big time."

He'd hear nothing of that. He just went on and on with the IRs .. blah blah blah.

That was in mid 2007. This year, the real estate outlook started to sour. He's not only worried about his 2 mortgages, he's worrying about his job too. He's really got all his eggs in one basket. But isn't that true for so many Singaporeans?

Read more about: How to invest your money safely

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


Post a Comment

Dear visitors:
Your comments are most welcome!

The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)