Auspicious time for property investors

Auspicious time for property investors

JAKARTA (JP): If investors have planting seasons like farmers,
now and sometime next year should be the right time for those
with extra money to plant their seeds in property.

Property analyst Panangian Simanungkalit says this is the best
time to invest in property, as the appreciation of the dollar and
tight liquidity has forced many property companies to slash
prices.

Suppose you have Rp 600 million (US$171,000) of money
remaining from the Rp 1 billion you set aside for portfolio
investment, and are wondering what to invest it in.

Since the brutal fluctuations in the stock market make
investing in that sector out of the question, why not spend it on
property?

But wait. How will you know that you have made the right
decision in your choice of investment?

Panangian says there are three steps to take before you
finalize any property transaction: field survey, legal survey and
using instinct.

Before choosing, you may want to consider these three smart
choices of land, small to mid-size houses and shop-houses.

The most important step before buying the property is to
inspect the condition of the property and pertinent legal
documents.

Check if there is progress in the area, if the development
area looks healthy and if all certificates and legal papers are
available and in order.

Find out if the developer is listed with the Indonesian Real
Estate Association or in the Office of the State Minister of
Public Housing, to avoid fraud and costly deception.

Of course, price is everything, but what is more important is
the size of the property. You don't want to buy something that
will end up a burden.

Panangian says the most saleable plots of land are those
between 350 and 450 square meters. Anything bigger and more
expensive would be hard to resell.

For houses, better buy one no bigger than 150 square meters
and priced under Rp 75 million, or else there will be the
likelihood of a tough resale.

He says it is better to invest in a shop-house that costs not
more than Rp 300 million and is in a strategic location. Keep an
eye out for bargains from owners who defaulted on their payments.

Make sure to check all the clauses of the payment system
before you pay. The same applies to legal papers and documents,
which should be in your hands before you say goodbye to your
money.

Planning to get a housing loan? Look into the bank in which
the funds are available.

Some banks give higher interests rates on housing loans, and
they are likely to give the loans readily. A word of warning
applies: those with higher interest rates may just be one of the
"problem banks".

An interest rate between 22 to 25 percent would be considered
normal, Panangian says, but 30 percent would be too high.

Before putting your name on the contract's dotted line, check
if all the requirements have been fulfilled. Rely on the
sensible and traditional means -- your instincts -- in gauging
the legitimacy of the seller. There have been many instances of
hit-and-run developers.

Don't rush yourself, as property prices will stay a bit lower
for at least the next two years. You have plenty of time to be
choosy, and wary, in sizing up the property market. (das)