By Mr. Propwise

People who are interested in investing in property often get the well-meaning advice to “do your sums” before making the leap. As property is often one of the biggest purchases that you will make in your lifetime, and usually comes with a large mortgage that can result in financial distress if not managed properly, I completely agree that you should “do your sums”. But what does that mean?

It’s an ambiguous term that I think covers three essential components of analyzing a property purchase: 1. The attractiveness of the property relative to the surrounding units, projects and areas 2. Your ability to service the mortgage including all your other commitments and accounting for some bad scenarios (e.g. your falling sick or losing your job) 3. The potential upside or downside of your investment based on both the potential yield and capital appreciation. In this article we ...