Property investors will always tell you to buy properties that are located in a hotspot, and many of them will tell you that the best properties are always located in the Golden Triangle. In Kuala Lumpur,
the Golden Triangle refers to the areas between Kuala Lumpur, Petaling Jaya and Bangsar. But properties in these areas are extremely pricey – and they are not the only areas which the properties have great capital appreciation.
1. The psychological Golden Triangle
Unknown to many, the Golden Triangle can refer to more than one thing. According to a study done by a professional, a Golden Triangle (to a person) refers to the distance that they are comfortable travelling from home to reach everything else. The distance studies revealed that people are usually willing to travel only 5 kilometers from home for everything else before they start feeling uncomfortable. This is a phenomenon that not many are aware of, hence you will always hear of some people who think that Rawang is the most central of areas to live in, or perhaps that Cyberjaya is close to everything they need. For investment purposes, you will need to ensure that within a 5-kilometre radius from the development are a multitude of offices, entertainment spots and lifestyle centres to cater to the people of the area.
Integrated mixed developments are all the new hype, as are new townships that promise a wholesome lifestyle of green parks, international schools as well as commercial centres in the vicinity. But the density of population
in the area plays a big factor in whether the development will be a ‘hot’ one or not. For example, if you build a township in a random spot in Rawang where there is no demand for housing, then it is highly likely that the demand for properties in that area will almost be non-existent at all. This does not apply for areas which the populations are already bursting at its seams. It would only take a short time for the property to be sold out. A mixed development in the heart of the city such as Kuala Lumpur would be more tempting compared to some project located in Cyberjaya. The logic behind this is simple demand and supply. If you build properties in unpopulated areas, then you will likely need to wait a long time for the demand of properties to reach your area. There are however exceptions to this case such as in Mont Kiara. The area is in the middle of the city with great connectivity and great tenants. Many assumed that Mont Kiara is a great place for investment. However, this does not hold true as Mont Kiara is overdeveloped with properties. The number of tenants interested for the properties does not match the amount of properties available for rent or sale. Just drive through Mont Kiara at night and notice just how many lights are lit in the windows of
the high rises and how many are not. This is a good way of gauging the density of population in the area.
3. Follow the corporations and franchises
Large corporations are usually blessed with resources for research for the next hot spot for them to develop a new project to maximize their profits. For example, if rumors are that Aeon or Tesco are preparing to develop a new project in that specific area, most investors will probably flock to that area to gain upon the hype of such corporations investing in such areas. Potential investors from Singapore would be tempted to invest in Grid Residence in Sunway Iskandar, if large corporations like Tesco are confirming their presence in that specific location. This is because Tesco supermarket will only be built in an area after extensive research is performed to ensure that there is sufficient population amongst other criteria in the area to patron the supermarket. Other franchises that property investors to follow could be McDonald’s – as their biggest asset is not their Big Macs but their locations. If examined, you will notice that every single McDonald’s is located in a thriving area
, and the branch is only built after extensive research on the population demographics.
4. The unexpected catalyst
Other ways to find a property hotspot
is to find a catalyst. Some examples of an unexpected catalyst include industrial areas and universities – establishments that when they begin operating will require massive numbers of homes for their workers, tenants or students. Most often the public will not hear any news of its development, and only regulars of the area will know that something is up in the wind when the area is boarded up and construction begins. Taylor’s Lakeside University could be used as a good case study for this. Before the university, the location would probably make no sense for people to invest in due to its limited potential for capital appreciation. However, as soon as development on the university began with no news published anywhere of what it would be, property investors immediately began doing their research. And those who found out shortly after made handsome profits from their investments in the area when the property prices increased in value almost a hundred-fold immediately after completion of the Taylor’s Lakeside University. A small room at D’Senza the residential high rise located beside the university can now can be rented out for RM2,500 per month – and tenants are never in short supply.
Do not be daunted by those telling you that you have to invest in the heart of Kuala Lumpur
to get the best returns. This is not true at all, and even a low-cost apartment can get you handsome profits if you do your due diligence. Every investor should do their own research instead of relying on general consensus to purchase their next property in the market. As mentioned above, sometimes, the most important factors to make profit from investments are purchases which are made with calculated decisions instead of listening to the majority.
Khir Khalid merupakan perunding pemasaran bertauliah yang berdaftar dengan badan profesional Institute of Marketing Malaysia. Penulis kandungan digital, editor dan kolumnis majalah online Marketing in Asia edisi Bahasa Melayu > BIODATA.