Investment in real properties

FIN 533PERSONAL FINANCE

INVESTMENT IN REAL PROPETIES

Prepared for: MADAM SHAHREENA DAUD

Presenter : A’FIFAH BINTI MOHD YUSOFAHMAD AFIDZ BIN MOHLISIN

MASWADI BIN AZIZMUHAMAD SHAHRULFITRI BIN

MOHD SULAIMANNOR AZWA BINTI MD RADZI

Shop lots

Condominiums

Shopping complex

House

REAL PROPERTIES

INTRODUCTION

WHY DO PEOPLE INVEST IN REAL PROPERTIES ?

• Less volatile compared to equity

• Opportunities of growth due to the stage of development in economy and society

• Perceive an intrinsic value of the property

• Available for small investors compared to government bonds

WHAT NEED TO BE CONSIDER WHEN INVESTING IN REAL PROPERTY?

• Location • Who is the developer?• Evaluate sources of financing • Make the right decision to enter and exit the

market.

Definition & Characteristic of Real Properties

Definition of Real Properties

includes land and buildings, and

anything affixed to the land.

not those which can be

removed

Other name is real estate

Characteristic of Real properties

- easy to manage- show to customer

Tangible

No fixed maturity

Requires Management

- need to be handle - control the management

-do not matured - can be more that 90 years

•-for apartment cannot be divided

•- for land may be divided into plot.

Indivisibility

•-cannot be destroyed

•- last long term and very durable

Durability

•- fixed location.

Immobility

•-different and unique.

Heterogeneous

Advantages of Investing in Real

Properties

Safety aspect

Negative gearing

Tax benefits

Positive asset base

Long-term investment

High leverage possibilities

Disadvantages of Investing in Real

Properties

Disadvantages of Investing in Real Properties

Rising interest

ratesRisk

Bad tenants

Changes Government

Policy

Management and

MaintenanceCapital

Requirements

Recommendation & Conclusion

Recommendation

Investment and

speculate

Real condition of real estate

Location

Conclusion

• There a lot of advantages invest in real properties rather disadvantages