Investment in buying a stunning property!
The general idea is, if you have 4 million in cash, how do you buy a property?
1. Directly pay in full for a property under 4 million. This is what most people would think of doing.
2. Use 4 million as a down payment. To maximize benefits, assume a minimum of 30% down payment, take a loan of 8 million, and buy a property worth 12 million. The monthly payment would be about 38,000. A bit hard to bear!
3. Use 3 million as a down payment, 30% down payment, take a loan of 6 million, and buy a property worth 9 million, with a monthly payment of 30,000. The remaining 1 million plus regular salary can cover 4-5 months’ payments. Before 2021, this was the genius buying method!
Assuming the property doubles in value within 5 years, in an ideal scenario:
1. 8 million earns 4 million.
2. 24 million earns 20 million.
3. 18 million earns 14 million.
The first method is conventional, with no difficulty. The second method, normal people may not have the ability to pay this monthly amount; only a few high-paying jobs can handle it, but the risk is very high. The third method combines appreciation with an easy monthly payment strategy. It earns 10 million more compared to the first option.
I may not have written it bluntly enough; the general idea is to keep some cash for monthly payments and not to go all in!
The biggest risk is if property prices adjust downward, resulting in total loss.
