When you reach a certain financial milestone in your life, the next step tends to be learning how to grow that wealth. That's where investments come swiftly into the picture.<\/p>
However, it's understandable that first time investors may feel\u00a0a little jittery about doling out a big sum for any form of investment. Well, we're here to put you at ease, and show you why investing in real estate can prove to be a good decision - with the help of Marc S., of course.<\/p>
Drawn to the dynamic and fast-paced nature of the industry, Marc,\u00a0Senior Realty Adviser at Knight Frank Singapore,<\/strong> went into real estate in 2011. During his time in the commercial real estate industry, Marc has not only confidently advised clients on their real estate acquisitions but ensured that they got the best out of their investment.<\/p> So to learn more about his experience and work, we sat down with Marc for a quick chat on how relatively easy it can be to invest in real estate, as well as what advice he has\u00a0for first time investors and\u00a0entrepreneurs.<\/p> Marc S.:<\/strong> I have, and I will continue to do so. In fact, my first investment was a commercial property in the CBD area, and when I was only 24.\u00a0I had to borrow the funds from my parents and sold it a year and a half later, making almost 30% in profits. It was a bold move on my end, and it required some convincing, considering I was still relatively young. Nonetheless, I knew what I was doing, and it turned out to be a very good decision.<\/p> M.S.:<\/strong> A lot of those who have never invested in real estate before either don't realise their capability to do so, or have a fear of stepping outside their comfort zone and taking a risk.<\/p> Firstly, for those who think they do not have the financial capability but are keen on making their first real estate investment, I would suggest getting qualified by a banker, who will then help you determine your budget. This will also prevent one from over leveraging and over committing.\u00a0Getting a loan of\u00a0up to 80% is possible, and that would reduce your downpayment to a mere 20%.<\/p> Secondly, do your research on the area and type of property you\u2019re keen on investing in. Check for future developments around the area, as these can add value to your real estate,\u00a0and will make your property more rentable.<\/p> Thirdly, work closely with a trustworthy and experienced agent, one whom you have a good rapport and chemistry with.<\/p> Lastly, note that there is a way to claim back your GST on the property purchased, which can be a\u00a0significant amount. Unfortunately, a lot of inexperienced investors are not aware of this. Heed the advice from the relevant professionals in the industry to ensure you avoid the pitfalls.<\/p> M.S.:<\/strong> Never make investment decisions based on sentiments. I have personally seen investors who have an emotional connection with certain properties, and they allowed it to cloud their judgment. Do not make impulsive decisions. It is always wise to do research and speak to professionals.<\/p> M.S.:\u00a0<\/strong>I don\u2019t normally recommend any one property in particular, as there are many factors behind why it would make a good investment choice.\u00a0However, I believe the recently launched project, City Gate<\/strong>, has great promise and is the one I\u2019ve been highly recommending to all my clients. It's strategically located on the city fringe\u00a0(along Beach Road), and with major developments around\u00a0the area, the project's potential becomes very exciting.<\/p> M.S.:<\/strong> Generally the key things to look out for include location, human traffic, size of unit and layout. For instance if you have a warehouse and it\u2019s located too far away, you could inadvertently be adding on to your logistics cost. Or if you have a retail space with little human traffic, you\u2019re not going to be able to sell your product well, despite your marketing efforts.<\/p> I understand that one of the important things for start-ups is to reduce overheads. Hence, I take it upon myself to ensure entrepreneurs and business owners do get the best value, and advise them accordingly so that they do not pay unreasonable rent.<\/p> I enjoy working with entrepreneurs and helping them get a space for their start-ups or businesses. It is refreshing to see their passion and drive, in wanting to execute their ideas - especially from the younger ones who are venturing with their first idea.\u00a0As it is, I\u2019m currently involved in helping a\u00a0business expand their F&B franchise here.<\/p> M.S.:<\/strong> A common misconception now is that the real estate market is doing poorly, and one should stay away from investing in it.\u00a0That is true, but only for\u00a0the residential sector, which has been affected by the government's cooling measures. Unless you\u2019re purchasing a home to reside in, I would\u00a0recommend steering away from residential properties solely for investment.<\/p> Commercial real estate, despite being affected by the slow-down to a certain\u00a0extent, is becoming a firmly established component of the investment\u00a0portfolios of discerning and astute investors.<\/p> Marie France Asia: Have you ever invested in real estate?<\/strong><\/span> <\/h2>
MFA: What should first time investors look out for?<\/strong><\/span> <\/h2>
MFA: What are some of the mistakes to avoid when investing in real estate? <\/strong><\/span> <\/h2>
MFA: At the moment, which commercial real estate property would be ideal for first time investors?<\/strong><\/span> <\/h2>
MFA: I understand that you\u2019ve also had your own startup, what would be your advice for other entrepreneurs?<\/strong><\/span> <\/h2>
MFA: How has the commercial real estate scene changed in recent times?<\/strong><\/span> <\/h2>
MFA: Would real estate be considered a less risky investment?<\/strong><\/span> <\/h2>