Pearls of Wisdom for Property Investors

By Gerald Tay (guest contributor)

1. The unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional (‘experts’) who is blind to even a single weakness.
2. When I’m evaluating property VALUE, there are two value rules:
   1. Don’t pay too much for the earth. – Pigs overpay on the notion of limited land, increasing population and marketing propaganda.
   2. Don’t pay too much for the business. – If you look at the “Price-to-earnings” ratio of your property, you can learn about its true “intrinsic” value – a.k.a. rent.
3. Own, fix and profit from old apartments/houses, instead of new sales.
4. AVOID Mid to High-End properties – You’re not going to get rich, you’re also not going to get poor at the same time.
5. Novice Investors – Get started FIRST with mass market residential property – It’s easier to understand, purchase and manage than other types of property. If you’re a homeowner, you’ve already got experience here. Start close to home, so you can stay on top of things.
6. “If you want unconventional success, you can’t be guided by conventional wisdom”. – think-grow-rich
7. Be specifically-clear about your objectives when you invest in property. First ask “Why”, not “How”
8. It’s far more important to survive the downturns and have stability of capital than it is to chase after max-out returns.
9. Time in market, not timing the market.
10. The greatest asset you can grow that will pay the most dividends for your investment future is your own (street) education. The learning never stops.
11. Save for 10 years of hardship, invest for a lifetime of prosperity.
12. Why buy a new car when you can own a property?
13. Due to a plateauing Singapore property market, profiting from capital gains is harder going forward, and Cash Flow is taking over as the reigning king of property.
14. If you get your ROI RIGHT, all other parameters, including price & location would have fallen into place.
15. ROI – Different people use different words, and use the same word to mean different thing. Always clarify in your mind what is being meant, without preconceptions.
16. Time Value of Money – Cash flows are worth MORE today than they are tomorrow. That’s a reason why new sales gives poorer returns than re-sales.
17. Evaluate how the property’s yield will meet your ROI objectives. Square footage prices of existing new launches measure current market. ROI measures your investment objectives. On a level of descending importance from A-Z, if A is ‘ROI meets objectives’, Y is ‘comparing dollars per square foot’ on your criteria list of importance.
18. “Communication, communication, communication…instead of location, location, location… I can’t stress it enough!” You want to work with people who will, through good communication and integrity, build your trust and develop a prosperous and long-term relationship with you.
19. “We don’t predict the future, but we do know that the next five years will not look like the last five years. That just doesn’t happen. Markets change. And our results over the next five will not replicate the last five. They never do.” – Gerald Tay
20. Property is the best investment on earth, however, when the music stops playing, which happens occasionally, don’t be the one left without a chair.
21. Being rich is having money; being wealthy is having time – You can get more money, but you cannot get more time. Eat, drink and sleep on this important wealth philosophy.
22. The new way to get WEALTHY – Slowly. Durable things rarely are created overnight. If you’re a millionaire by the time you’re 30, but blow it all by age 40, you’ve gained nothing.
23. My money, I should add, is where my mouth is: These timeless pearls of wisdom are essentially identical to my actions. Sustainable investments give sustainable wealth which allows me to sleep well every night. Many people worry too much about material things and wealth. They believe property can give them that only to lose it eventually. I prefer to live a meaningful, useful life than one that is measured purely by money.