Location Is Key To Value Appreciation

In my previous post, I shared the four property seasons in property investment from a book, Hierarchy of Money Skills by Peter Yee. In this post, let me share his thoughts on why location is key to value appreciation.

One of the most important considerations in determining the VALUE of the property. “A good location is usually near a highly populated or high income growth area”. OK. This makes sense for investors and not for people who are buying for their own stay.

The appreciation of a property price is really dependant on the land it is built on and NOT the building itself. In fact, the building depreciates in value while the land appreciates in value. Therefore, if the building is well maintained coupled with the appreciation of the land, the overall appreciation value will be higher.

A lot of people want to buy a property for rental income or they want to let it out first then exit by selling it at a higher price for profit. Rental is great for cashflow because it helps to cover the loan instalment & the maintenance, while waiting for capital gain that generates true wealth. If the location is not right, both will eventually happen but at slower pace, and with a lot more pain, if I may add.

Personally, the same should apply if you want to buy for your own stay. Unless you’re planning to stay in the same property into your retirement, at some point in the future you may want to sell the property for whatever reason. Location is key to value appreciation if appreciation is what you hope for and want. Will it not be easier and faster to sell if the property is in a good location?

Allow me to do a bit of advertising here, to introduce my favourite project because the location is very good! The location is Kelana Jaya. It is already a mature neighbourhood and everything is within reach. Properties located within this area is on the pricey side but with good reasons.

If you’re looking to buy in Kelana Jaya, I can recommend a 3R2B service residence great for young professionals looking for a combination of work, lifestyle and fitness all in one place.