Property is a class of assets and investments which comes with emotional bonds, unlike other types of investments say stocks and shares. Technically speaking, one should be sterile and clinical about evaluating their investment decisions including property. But for some reason, perhaps because every man or woman wants to own their own home, this becomes an emotional issue, even if the property is not going to be the investor's "home".
Nostalgia and romance played a big part in our property hunt in Penang. My grandmother had a old Peranakan shophouse in Georgetown and I spent many school holidays there till I was about 15. That was the house my mother grew up in. Over the years, the dirt, grime, peeling plaster, rusty metal have all taken on a rosy hue. Add to it, beautifully reconstructed examples, both outside and on the inside, of such houses which would necessitate a long-time of indentured servitude to pay off the mortgage, have been all the rage in Singapore for the last many years, pushing many Singaporeans to look outside Singapore. For the ones with foresight and speed, they had snapped up these old derelicts when everyone was pooh-poohing them in Georgetown, many have been renovated and rented out for use as restaurants and retail shops, others with more passion and creativity, have turned them into boutique hotels and pioneered that in Georgetown. When Georgetown was awarded the UNESCO status in 2008, this pushed the prices of these charming shophouses skywards. However because the supply is much greater than in Singapore, there are still many rundown, derelict houses one could purchase for much less than back in Singapore. And then spend some money to do it up and still be ahead. However the Malaysian government has identified this as a risk/money-making opportunity and has mandated a minimum price threshold of RM2 million for these landed property should a foreigner wish to purchase. Hence effectively blocking the cheaper shophouses from the clutches of this group of buyers.
Romantic notions of turning one of these charming properties into a modern boutique hotel or a Bed & Breakfast complete with cafe is another attraction for buying a shophouse. People are bored of the franchised chain hotels and are looking for unique travel experiences. Corporate rats looking for an out, oscillate naturally towards these choices, they think they can put their corporate skills into running a successful concern where they can meet different people, shoot the breeze, talk about life, drink some coffee and be their own boss. Making big bucks isn't the top of the agenda here, just making sure the business is self-funding is good, making a small profit is a bonus.
And so we looked, we dreamt, we looked. We are still dreaming, we are still looking.