Differences between Property Investment and Non-Property Investment

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Assalamualaikum.

Basically, these points are some of the differences between them. Aku akan explain all the characteristics between these two investments by referring the points given below.

  • Security of capital (Jaminan modal)
Property Investment ni ada high security of capital. Possibility for losing all or part of capital in property ni sangatlah rendah. Melainkan ada keadaan yang buatkan kita kehilangan properties ni sendiri macam bencana alam atau lain-lain. Sebab itu, low risk. Lagipun, property ni long term trend. Makin lama makin naik harga investment. Building memang akan depreciate tapi ingat, land appreciate value, lagi lama lagi bagus, thanx to inflation yang berlaku.Jadi modal yang kita laburkan terjamin.

Non pulak, easy to lose part of almost all capital shares. Ini disebabkan modal yang dilaburkan di sini naik turun, hardly predicted. Duit yang dilaburkan tu basically akan dipulangkan dalam dividend. Dividend datangnya dari performance syarikat. Memang ada analysts yang boleh make a prediction, but it might be a speculation. Difficult to predict leads to high risk.

FYI, Permodalan Nasional Berhad (PNB) sekarang is known for its performance yang static takpun menaik. Tak jatuh. Tapi statik banyakla.

  • Security of income (Jaminan pendapatan)
Property investment ni high in term of security of income. Selalunya invstmnt ni datang income dari rental income. Rental income selalunya stabil je. It is not easy to lose income from property. Tenant yang occupy the property tu is obliged to bayar as dia legally binded with the tenancy agreement. Tak bayar, memang kenalah. Selalunya, rental always be paid by tenants before all other household expenses. Sebab rumah tu tempat tinggal. It's better lose your car than your place of shelter KOT. Lagipun, property rental ni boleh ada review, so, income boleh meningkat over the time.

Non property investment seperti stock and shares plak as stated in the above point, datang incomenya dari dividend from shares yang depend on the profits of the companies. Syarikat-syarikat ni bukan sepanjang masa untung. Kalau banyak untung, banyak yang boleh diberi. Kalau sikit, sikit lah yang dapat. The dividend may up and down annually. So, berbeza-beza amount yang kita boleh dapat sepanjang melabur.

  • Divisibility (Divisible Bahagi, Divisibility Pembahagian?)
Property investment ni not easily broken up into smaller units. Property ini kan dijual secara keseluruhannya and tak datang dalam bentuk jual ground floor je and such. So, untuk someone yang terdesak nak small amount of capital, dia harus jual property secara whole jugak. Bila jadi macam ni, investors mesti ada high capital untuk invest and property investment is definitely not for small scale investors.

Non property plak seperti shares and unit trusts selalunya dijual dalam bentuk units. Shares dalam lots of 1000 units, UT plak in multiple of 10 or 100 units). Contoh, ASB dijual seunit RM1.00. So it is affordable bagi small scale investors. People can resell part of investment untuk dapat desired amount of money time tu jugak. (ASB's link: http://www.asnb.com.my/asb.htm)

  • Liquidity ( Kecairan -  the ability for something to be converted in cash money)
Property low liquidity. Maksudnya longer time to get back cash. Kenapa lama? Ini disebabkan kita nak cari right buyer at the right price, nak tunggu buyer to get loan and many legal procedires need to be complied with. Ini menyebabkan iit is not easy to exit from the investment. Lama woo nak tunggu dapat duit balik. Ingat balik Law of Property sem lepas.

Non pulak can be sold in the same day. Ini membuatkan dia ni high liquidity. Lagipun kewujudan Bursa Saham iaitu central market membolehkan senang nak cari buyers. Berbeza dengan property, easy to enter and exit from investment ni sebab semuanya dalam bentuk angka. Not difficult to transfer it from a person to another one.

  • Maintenance costs
Property high in maintenance costs. Sebab kita need relatively high annual/repetitive costs to maintain the property untuk overcome depreciation tak kesahlah dari segi physical or economic. Kita juga mungkin perlukan professional service to help maintain the investment. This situation happens for people who do not the expertise to take care the investment by themselves.

Non plak senang je nak ingat. Non maintenance cost. Sebab company sendiri akan manage units diorang. Kita goyang kaki tunggu income.

  • Transaction costs
Property higher transactions cost. Ini disebabkan involvement of legal or valuer's fees, marketing costs, registration of tile. Paling koman, RM5000 dah stand by nak bayar semua-semua ni. Just for berjaga-jaga. I heard that fee of solicitors mahal. Cari sendiri~

Non property plak lower. There is no registration of title yang perlu dibuat. Not relevent. There are no legal/valuer's fees, marketing costs yang diperlukan.

  • Hedge against inflation (Yang aku faham, bergerak seiring dengan inflation)
Property ni good hedge against inflation. Property return foes up with inflation. Tak kisah dari segi rental or prices, semua naik seiring dan sejalan. Lirik~

Non plak, not a good hedge, return dia may fixed rate or not consistent with inflation. Macam bond, dia dah ada fixed rate, so kalau kena 3% percent daripada capital tu, akan kekal maintain je. Rugi memandangkan maybe inflasi dah capai 6% ble dah sampai maturity period of the bond.

  • Tangibility
Property investment ni exists physically, can be seen, touched. Kita boleh tengok keadaannya. Worst case scenario sekalipun, investor sendiri boleh duduk dalam rumah tu kalau rumah tak terjual. Selain itu, gives pride of ownership to investors sebab memiliki properties tersebut.

Non plak, hanya ada nilai angka dan paper of investment je. Makan pun takboleh.

  • Acceptance as collateral (Penerimaan sebagai cagaran *Check kamus*)
Property is easily accepted as collateral for loan. Kenapa? sebab security of capital tu sendiri. Property tu kan al-'aqar, immovable, so bank boleh bila-bila masa lelong rumah tu bila kita cabut lari tak bayar. *Pengaplikasian term CTU262*

Non property, not easy. Sebab low security of capital. Tak nampak, payah bank nak kasi. Performance pun naik turun. Tak meyakinkan untuk si creditor untuk dapat balik loan dia if tak berjaya loan dibayar.

  • Terms
Medium to long term bagi property. Boleh jadi for a few monts or many years. Sebab? It is not easy to enter or exit from the investment.

Non, short to medium term. Untuk share - day pun boleh. Investment (Bonds) depends. Ada yang 10-15yrs. 30 pun ada tak silap.


That's all. Limited knowledge leads to limited elaboration. Do help me in touch up these elaborations please? Thanx :) Assalamualaikum.

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