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PR soon, buying condo, advice needed

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Old 11-02-2020, 01:07 PM   #1
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PR soon, buying condo, advice needed

Hi guys,

I am a late 30s single, and am looking at getting a 2 room condo after I get my PR (fingers crossed), to avoid the ABSD. I still need to pay 5% ABSD, but not the 15% of a non PR.

The place I am looking at is listing 1,300,000 SGD sales price. How much do you reckon that after all ABSD, stamp duty etc all in will cost me?

I am currently renting the exact same type in the condo (not same unit) and I am fetching a rental of 2500 SGD (and propertyguru is advertising 3000 to 3500). I might rent out the condo I bought since the current one I am renting is provided by my company. And only move into to my own condo in 2 - 3 years time.

Investment-wise, do you guys think it's worth it? Advice appreciated.
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Old 11-02-2020, 01:54 PM   #2
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I personally feel while the new launches are overpriced, there are some value to be found in the resale market.

I had an ex boss who was a PR here for 20 odd years. He had lodging allowance like you. He bought a place and asked his company to pay for the monthly instalment. He did that for 20 years. So with the cap appreciation, his company literally gave him the place for free. He revoked his PR, took his cpf money, sold his place, and left SG at 45, retired 5-8m richer based on my calculations.

You can asking your company if they could foot your monthly instalments instead then it's a no brainer.
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Old 11-02-2020, 02:27 PM   #3
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I am a late 30s single, and am looking at getting a 2 room condo after I get my PR (fingers crossed), to avoid the ABSD. I still need to pay 5% ABSD, but not the 15% of a non PR.

The place I am looking at is listing 1,300,000 SGD sales price. How much do you reckon that after all ABSD, stamp duty etc all in will cost me?

https://www.moneysmart.sg/home-loan/...uty-calculator
Conveyancing Fees - ~$2,700 (average inclusive of GST, and you might be able to find cheaper ones)

I am currently renting the exact same type in the condo (not same unit) and I am fetching a rental of 2500 SGD (and propertyguru is advertising 3000 to 3500). I might rent out the condo I bought since the current one I am renting is provided by my company. And only move into to my own condo in 2 - 3 years time.?
Wrong choices of words, and can lead to misunderstanding. Fetch is if you own the property. Bought if you already own one. So do you already own any property...?

Investment-wise, do you guys think it's worth it? Advice appreciated.
We do not have much info on the property you are eyeing on, how to say worth it or not? If 2.3% rental yield (before taking into considerations of the related expenses like property tax, income tax, maintenance fees, interest) is good for you, then it can be worth it. Perhaps you should look at the possible future capital appreciation as a whole, though no one can guarantee much.

You might want to hold on to purchasing one now, and wait a few months more to see if the market would be affected by the current coronavirus situation.
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Old 11-02-2020, 02:40 PM   #4
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Hi guys,

I am a late 30s single, and am looking at getting a 2 room condo after I get my PR (fingers crossed), to avoid the ABSD. I still need to pay 5% ABSD, but not the 15% of a non PR.

The place I am looking at is listing 1,300,000 SGD sales price. How much do you reckon that after all ABSD, stamp duty etc all in will cost me?

I am currently renting the exact same type in the condo (not same unit) and I am fetching a rental of 2500 SGD (and propertyguru is advertising 3000 to 3500). I might rent out the condo I bought since the current one I am renting is provided by my company. And only move into to my own condo in 2 - 3 years time.

Investment-wise, do you guys think it's worth it? Advice appreciated.
5% ABSD + normal Stamp duty = $101,600 based on $1.3M purchase price.. on top of that, you need to pay legal fess approx. $3k.. and dun forget to factor in your reno costs since you are buying resale unit..
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Old 11-02-2020, 02:51 PM   #5
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Depends on the project you take, certain projects have very high maintenance as well.

In terms of investment it is definitely better if you are planning to stay here long term.

$$ lost when buying a property :
ABSD + Buyer stamp adds up to $101,600 for a $1.3m property.

$101,600 / 2500 = 3 years 4 months worth of rental.
If we add maintenance costs (assuming $300 a month) -> (maintenance $300 a month * 3 year 4 months ~ 5 months + 3 year 4 months round up)
if you stay more than 3 years 10 months, you will start saving money.

If want to be more detailed you can factor in agent fee when selling next time / possible appreciation/depreciation value of condo / principal interest.
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Old 11-02-2020, 02:58 PM   #6
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If you get a resale, most likely conditions wouldn't be perfect, so you might end up replacing stuff / repairs while renting out for the next 2-3 years.

Then here comes the problem, if you replace, do you want to get a cheap replacement or a quality one since you are planning to stay afterwards. If you get a quality one, will the current tenant abuse/spoil/never take good care of your things ?

I'm not sure how your company package works, do you get allowance if you buy your own property?
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Old 11-02-2020, 10:03 PM   #7
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I personally feel while the new launches are overpriced, there are some value to be found in the resale market.

I had an ex boss who was a PR here for 20 odd years. He had lodging allowance like you. He bought a place and asked his company to pay for the monthly instalment. He did that for 20 years. So with the cap appreciation, his company literally gave him the place for free. He revoked his PR, took his cpf money, sold his place, and left SG at 45, retired 5-8m richer based on my calculations.

You can asking your company if they could foot your monthly instalments instead then it's a no brainer.
Thanks @drkcynic, I am unlikely to have my company foot the bill for monthly installment / rent. Hence I am simply exploring the option of buying one and staying in the other company rented apartment. With the possibility of moving into my own apartment in a few years time.
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Old 11-02-2020, 10:07 PM   #8
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https://www.moneysmart.sg/home-loan/...uty-calculator
Conveyancing Fees - ~$2,700 (average inclusive of GST, and you might be able to find cheaper ones)
Very useful link, thank you.

Wrong choices of words, and can lead to misunderstanding. Fetch is if you own the property. Bought if you already own one. So do you already own any property...?
I don't own any property yet, I am (rather my company is) paying rent for my current apartment.
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Old 11-02-2020, 10:09 PM   #9
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If you get a resale, most likely conditions wouldn't be perfect, so you might end up replacing stuff / repairs while renting out for the next 2-3 years.

Then here comes the problem, if you replace, do you want to get a cheap replacement or a quality one since you are planning to stay afterwards. If you get a quality one, will the current tenant abuse/spoil/never take good care of your things ?

I'm not sure how your company package works, do you get allowance if you buy your own property?
I won't be getting any allowance from the company if I buy my own property.
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Old 11-02-2020, 11:45 PM   #10
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All else being equal - it seems like you already have a roof over your head accounted for by your company.

You should look at a property only if you are intending to stay in SG long term.

Assuming that you are not intending to stay in SG long term, alternative asset classes should be more appealing (eg. REITS giving ~4% yield).

For private property, on day zero when u purchase you are already in a negative $ scenario and setback at least $100k, with questionable probability of capital appreciation and rentability.

Alternatively, if you intend to settle down in SG with a SG citizen spouse, HDB resale/BTO would be a better bet.
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Old 12-02-2020, 11:08 AM   #11
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All else being equal - it seems like you already have a roof over your head accounted for by your company.

You should look at a property only if you are intending to stay in SG long term.
That's my plan.

I am actually quite travel mobile, but Singapore is where I think I will settle down eventually.

Assuming that you are not intending to stay in SG long term, alternative asset classes should be more appealing (eg. REITS giving ~4% yield).
That is valid. I've looked at REITS and it's appealing, my only reservation is that during 2008 market crash, Singapore REIT fell over 50% in value, though it might (might not) still fecth 4% dividend, but they stock value took 50% hit.


For private property, on day zero when u purchase you are already in a negative $ scenario and setback at least $100k, with questionable probability of capital appreciation and rentability.

Alternatively, if you intend to settle down in SG with a SG citizen spouse, HDB resale/BTO would be a better bet.
I am still single now, so I don't know how things will pan out, hence I am ruling out the possibility of a SG spouse since there is none now, probability = ZERO now.
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Old 12-02-2020, 11:41 AM   #12
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That's my plan.

I am actually quite travel mobile, but Singapore is where I think I will settle down eventually.


That is valid. I've looked at REITS and it's appealing, my only reservation is that during 2008 market crash, Singapore REIT fell over 50% in value, though it might (might not) still fecth 4% dividend, but they stock value took 50% hit.


I am still single now, so I don't know how things will pan out, hence I am ruling out the possibility of a SG spouse since there is none now, probability = ZERO now.
If you plan to settle down in Sg, then its good idea that you can get your own property.. even if one day u decided to relocate else where, you can always rent it out / sell it.. one thing good about Sg property is you dont have to pay any capital gain tax when u sell..

Feel free to PM me for more info re property ownership in Sg..
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Old 12-02-2020, 01:33 PM   #13
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The ones I am looking for has about 1995 - 2000 TOP, so it's about 20 years old now, if I buy now and stay/rent another 20-30 years, that would be 40-50 years of usage. Would that be detrimental to price gain, especially given that there is a 99 year leasehold for it.
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Old 12-02-2020, 03:48 PM   #14
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Thanks @drkcynic, I am unlikely to have my company foot the bill for monthly installment / rent. Hence I am simply exploring the option of buying one and staying in the other company rented apartment. With the possibility of moving into my own apartment in a few years time.
I think as others have pointed out, 101k is what you need to come out with. I guess you have zero cpf now so the 25% down will be additional cash you need to get? That is opp costs lost there. Reno maybe sets you back 5k (or more) thereabout? Agent fees of 1 mth for 2 years. Agent fees of 2% if you eventually decide to sell your place. The interest on the loan you take up. Property tax. Maintenance fees. Other misc costs of renting out your place etc.

These are the additional costs you need to take into account. I estimate you need around 5 years of full rental to break even on all those outputs. If you fail to rent out at certain period your break even will drag out longer.

Your best bet is some capital gains on the property when you sell. That is an unknown considering the age of the property you are targeting and the high prices now. It depends on the pty and the price you go in.

You need to do your risk assessments. Ie lose job or whatever because you are single income for now. I personally will not take up the risk for little returns. At current prices, laws and taxes, it is no longer easy / risk free to be a consumer landlord in SG.
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Old 12-02-2020, 08:43 PM   #15
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I think as others have pointed out, 101k is what you need to come out with. I guess you have zero cpf now so the 25% down will be additional cash you need to get? That is opp costs lost there. Reno maybe sets you back 5k (or more) thereabout? Agent fees of 1 mth for 2 years. Agent fees of 2% if you eventually decide to sell your place. The interest on the loan you take up. Property tax. Maintenance fees. Other misc costs of renting out your place etc.

These are the additional costs you need to take into account. I estimate you need around 5 years of full rental to break even on all those outputs. If you fail to rent out at certain period your break even will drag out longer.

Your best bet is some capital gains on the property when you sell. That is an unknown considering the age of the property you are targeting and the high prices now. It depends on the pty and the price you go in.
Simplistically, assuming there is a 50% increase of property prices in 10 years, I am looking at an equivalent of 4% bank interest rates savings. See chart below.

I have not factored in wear and tear, and additional maintenance outlay obviously.



If I factor in the 3000 SGD rent that I am getting then it will additional 360K SGD I am getting assuming I continuously get rent, and the rent doesn't go up. Which neither is static.
You need to do your risk assessments. Ie lose job or whatever because you are single income for now. I personally will not take up the risk for little returns. At current prices, laws and taxes, it is no longer easy / risk free to be a consumer landlord in SG.
We can cancel out the risk factor here, as there is savings that would otherwise go into share market or REITS.
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