Your Exit Strategy: Five (5) Questions To Ask Before Buying Any Property

Becky Saw @GoodPlace

Like a lot (most?) of experienced investors, The Mentor almost never sell anything on his property portfolio which have been proven to be good cashflow generators. Indeed, I’ve met more investors who have the “buy and keep” mindset; indeed, 9/10 of the people I meet who tell me that they’d like to buy and flip have usually been newbies.

It’s true that property prices generally trend upwards on the longer timeline, and it’s only logical that the safest, surest bet as far as property investments are concerned, you gotta play the long game. Pushing this premise a little further, it means that any short-term strategy e.g. “buy on DIBS and flip before the loan repayment kicks in” circa 3 years back is destined to fail.

Of course, going contrarian has always been GoodPlace’s hallmark, and since we are not beholden to anyone we can afford to speak the truth. Beware of anyone trying to push you a short term, “buy today and flip tomorrow/next month/next year” ahem, “opportunity”. As the popular (and strangely true) adage goes, if you look around the room and don’t see a sucker, it means that you’re the sucker…

Needless to say, be extra wary of someone telling you that a “6.47% yield is guaranteed” or any other crapshoot-in-the-sky promise like that. Get your guard up if the developer / agent / salesman looks and talks like your typical gold-chain wearing, smooth-talking MLM scamster looking to score his next hit (look at my bright new yellow Lambo, yo). All very common sense stuff, really, but you’ll be surprised how many people get duped like this on a daily basis. I guess it’s true that a sucker is born every minute…

Another reason why you probably wouldn’t want to sell off anything is that you’d be hard pressed to find anything that would give you the returns better than property. What are you going to do with the moolah after you sell? Park it in the bank? Place your bets in the stock market? Of course not, you silly, silly person.

(I’m not suggesting that there’s nothing better than property as an investment vehicle. In fact, it’s common knowledge among seasoned GoodPlace readers that I’m not too big of a property investor myself – truly, I’ve never claimed to be one. Instead, I’ve been plonking all my dough in this one opportunity which has been giving me returns better than anything I could ever find in property – in the region of 200-300%. And it’s called My Own Business.)

With that in mind, here are some considerations that you can take when you decide to sell or to keep. Indeed, as an astute investor, you should already figure out what your exit is before you buy anything. Don’t blindly place your down payment on some fancy KLCC condo just because your smart aleck brother-in-law tells you to. In all probability he doesn’t know any better than you do. Yes, even if he claims to be some hot shot property blogger 😉

Exit Strategies: Your Considerations

Before you buy, you should create a couple of possible exit strategies which are aligned to your investment objectives: perhaps most importantly, how much money you wanna make (note: “as much as possible” is not acceptable!).

  1. What is the time frame? For the sake of argument, anything below five years is considered short-term. We at GoodPlace like long term plays for reasons described above.
  2. How much cash does (or will) the property produce? This one’s a biggie. If you’re building up a portfolio without ever having to sell, then the properties you buy should be spittin’ out cash like Jay Z spitting’ out rhymes, homeboy…
  3. Do you want your kids to inherit your portfolio? This ties up with (1) above, and if you want your portfolio to outlast you then understandably you’ll make decisions which can be drastically different (and wiser) than those made by the wet-behind-the-ears 25-year-old “buy it and flip it” punk about to get bitch slapped by the invisible hand of Adam Smith.
  4. How strong is your holding power? Can you afford the monthly payments without having to rent out the unit? If you can, then congratulations. Otherwise, rethink – rental yield is taking a severe beating nowadays, and I don’t see any hope of improvement in the near future.
  5. Do you have the money to fix the property? If your answer to (4) above is anything but a definitive yes, then it means that you’ll be competing for a smaller pool of renters (compared to properties available for rent) for cashflow. In other words, you gotta be prepared to spend the dough to pimp the place up to make it stand out.

In next week’s article, we shall be going deeper into each of these considerations, and how to tie these up with market conditions and property cycles. For homework, check out these guides that we have produced on the topic – here and here – and we’ll talk again in a week.

About Khai Yin

When I am not writing for and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at

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