Which type of small condo is the best for rental yield?

[xersion]

Hold your breath for Budget on 18 Feb to see if government will give developers an extension on their ABSD remission.

I doubt so... Absd is good revenue and pte property is hot now... Developers have no problem selling...

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[gerdhold]

When they talk about 3% yield, is that the absolute returns or it must still deduct other expenses?

It is gross that is commonly discussed as the nett is very particular to the individual and specific property. But the difference between gross and nett can and is often very large.

 

[OngHuatHuat]

Hope my financial situation will improve after Chinese New Year and some good news from the government.

Hold your breath for Budget on 18 Feb to see if government will give developers an extension on their ABSD remission.

 

[Perisher]

It is gross that is commonly discussed as the nett is very particular to the individual and specific property. But the difference between gross and nett can and is often very large.

That's what I think too so it can become substantially lower than 3%... almost nothing... So how to hit 9% on capital cost?

 

[Perisher]

Must use nett...

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If it's nett 3%, then that's ok, as someone mentioned, it would be around 8-9% on initial capital outlay. But I doubt that would be the case.

 

[MikeDirnt78]

When they talk about 3% yield, is that the absolute returns or it must still deduct other expenses?

Must use nett...

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Just plug in the date and all cash flows (capital, loan, rent, tax, fees, property value, principal balance, etc) into Excel. And use the XIRR function.

Sometimes Excel will not be able to work out if there are too many entries. You need to nett off some items to cut down on the entries.

What matters is the % number must be positive and high enough.

 

[Perisher]

Just plug in the date and all cash flows (capital, loan, rent, tax, fees, property value, etc) into Excel. And use the XIRR function.

Sometimes Excel will not be able to work out if there are too many entries. You need to nett off some items to cut down on the entries.

What matters is the % number must be positive and high enough.

Asking the experienced ones because I have no idea. If they can give a % of the yield after deducting everything.

 

[OngHuatHuat]

If it's nett 3%, then that's ok, as someone mentioned, it would be around 8-9% on initial capital outlay. But I doubt that would be the case.

Actually if the yield is too much a concern, it is better to wait for price crash.

 

[MikeDirnt78]

Asking the experienced ones because I have no idea. If they can give a % of the yield after deducting everything.

Looking at yield is not reall complete. Just like stocks.

You can get positive cash flows but price is declining.

Not so evident in property but end of day, you still must see the total returns.

 

[Perisher]

Actually if the yield is too much a concern, it is better to wait for price crash.

It is a concern, it forms part of the returns afterall.
Whether it's a very big one depends on individual. Issue then become whether there will be a crash? I doubt it. Cooling measures take care of that.

In other words, not much yield, no huge capital appreciation nor a crash expected. Just very delicate situation.
Like all things, want good return need good deep research.
My2cent.

 

[Perisher]

Looking at yield is not reall complete. Just like stocks.

You can get positive cash flows but price is declining.

Not so evident in property but end of day, you still must see the total returns.

I'm not purely looking at yield just wondering if the yield is good.

 

[OngHuatHuat]

Sometimes if you focus too much on petty sums, you will miss out the bigger picture, as in the demand driven price increase for this type of condo.

It is a concern, it forms part of the returns afterall.
Whether it's a very big one depends on individual. Issue then become whether there will be a crash? I doubt it. Cooling measures take care of that.

In other words, not much yield, no huge capital appreciation nor a crash expected. Just very delicate situation.
Like all things, want good return need good deep research.
My2cent.

 

[BBCWatcher]

Sometimes if you focus too much on petty sums, you will miss out the bigger picture, as in the demand driven price increase for this type of condo.

Did your real estate agent tell you that, or are you practicing to be one?

 

[NewInvestor]

Did your real estate agent tell you that, or are you practicing to be one?

Very cynical leh. Don't be liddat. Give some chance.

 

[OngHuatHuat]

Did your real estate agent tell you that, or are you practicing to be one?

Just feel excited for having one extra freehold property for my family.

 

[gerdhold]

Being private residential landlord is not so easy these days. Tenants are picky and have lower purchasing power. Dealing with vacancy is a real and costly issue. Repairs/refurbishment/maintenance are recurring and relatively frequent issues you will have to deal with or pay someone to deal with. Realistic unlevered yields are in 1-2.5% range, levered is of course higher. Against that backdrop, one should consider if it is worth the effort not forgetting real estate is not nearly as liquid as other asset classes.

 

[xersion]

If it's nett 3%, then that's ok, as someone mentioned, it would be around 8-9% on initial capital outlay. But I doubt that would be the case.

Hdb possible... I have not seen a condo that is top recently making profit...breakeven also hard

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[andyhtc]

Just wonder for studio or 1 bedder of similar price(take note not similar size), geylang higher or Potong pasir or balestier?

I find geylang condo rental seems on the high side for similar units, correct me if I am wrong.

Geylang rental is supported by vice trade.

 

[andyhtc]

Just feel excited for having one extra freehold property for my family.

It won't be exciting when you are a landlord now.

 

[andyhtc]

Just plug in the date and all cash flows (capital, loan, rent, tax, fees, property value, principal balance, etc) into Excel. And use the XIRR function.

Sometimes Excel will not be able to work out if there are too many entries. You need to nett off some items to cut down on the entries.

What matters is the % number must be positive and high enough.

Vacancy period is the biggest variable.