REMEMBER how we used to select our mobile phones before the emergence of smart phones?
We look at the different features, specifications. The phones come in various colours, shapes and sizes. We can almost name the brand and model just from the physical appearance from afar.
Then, we enter the era of smart phones driven predominantly by the touch screen features. Slowly, it becomes homogenous in design across the brands with similar features all in that long rectangle slim thin metal box fronted by a reflective screen.
You can no longer tell the difference from afar and you now select the product based on your preference. How long it will last is no longer a requirement as you are expected to change your phone whenever the latest edition hits the market.
A similar analogy can be drawn with cars; the features and specifications are almost identical for the various choices within the same pricing segment. Besides the brand positioning, it’s the service, maintenance and after sales service that make the difference. It’s about the service and parts warranty, parts availability and maintenance costs that drive the ultimate decision these days.
The same can be said about property purchases. Properties nowadays generally come with similar facilities. There is the swimming pool, clubhouse with gym and public function hall. These are pretty standard, rather than special.
As such, branding is actually only part of the consideration. In selecting a property, one must look at the subsequent facilities management after handover, the management friendly design, the expected ongoing service quality, in addition to just comparing developers and their branding.
When developers build their projects, infrastructures and specifications are generally the same. The differentiating factors are location and design.
It is advisable not to emphasise solely on the location factor alone when making a purchase. Without doubt, a property located within walking distance to the nearest MRT or other public transport has its merits.
Chances are, in the near future the government or developers will build public transport facilities near each of their respective project in order to boost sales. Furthermore, building a dedicated highway to the property is a trend today. As such, location is not that much of an issue anymore.
Let’s think of purchasing a car. The important thing to emphasise is the service quality a brand is able to provide. Ask yourself, will you purchase a car which has pricey spare parts and the service quality is depressing?
Worst still, will you buy a breathtaking and exclusive brand, one which makes you feel good when you drive around and when you valet park, but whose parts are unavailable in the country?
I guess the answer is No, you will not.
Let’s go back to property. Do you know that most buyers focus on the unique design language of the property, the ample facilities presented in the brochures. They overlook who is the property management provider and whether its work is up to par.
Please note that the more facilities provided, the higher the maintenance cost will be. A swimming pool or gym require constant maintenance. If both of these are not well maintained, the swimming pool will be full of algae and the gym equipment will be faulty.
In other words, the property is under maintained and it will cost more to restore the pool and to replace the faulty gym equipment. Furthermore, with the power of Internet and social media nowadays, one can easily gain access to the condition of a property and conduct due diligence before buying it. It is a general perception that no one will pay good money to purchase an under-maintained property.
Furthermore, selling a property is not as easy as selling a car. Most cars come with a five-year warranty and owners can buy a new one and the whole cycle of car ownership begins again.
However, when buying a property, one has to take into account factors such as location, education facilities nearby and so on. It is also not easy settling down into a new property.
Therefore, when buying a property, please consider the management aspects of it. This is a key consideration factor. The maintenance fees will only increase with time. It is like owning a car, the higher the mileage, the higher the maintenance cost.
To quote our former prime minister Tun Dr Mahathir Mohamad: Malaysia has first-class facilities but third-world mentality. Owners must ensure their properties are well maintained. Otherwise, they will end up with a huge maintenance bill and a depreciating asset as a result of poor maintenance.
- Chris Tan is the founder of legal firm Chur Associates.