CPF Accounts Value thread

[henrylbh]

but bbc has a point in that the difference in condo rental and a hdb 5-room rental is not big compared to its prices.

Take my case. My condo could be rented out at about $2,200. Net of maintenance and sinking fund and property tax, rental is about $1,800 against market value of $880k that I just sold. My 5rm flat could easily net 2k against market value of $440k that I just bought. Not much difference?

 

[SBC]

1. What’s the expected quantum for the condo? Private price index is still record high, unless you managed to hunt for good fire sale.
2. Your loan duration will only be 15 years. TDSR could be a challenge.
Say loan of 500k, monthly repayment will be $3574. You will at least 10k income.
3. How much space you need?

I was using MSR calculation earilier, 30%. With TDSR of 60%, income has to be more than 5k, assuming no other loan obligations.

 

[SBC]

Take my case. My condo could be rented out at about $2,200. Net of maintenance and sinking fund and property tax, rental is about $1,800 against market value of $880k that I just sold. My 5rm flat could easily net 2k against market value of $440k that I just bought. Not much difference?

My HDB 4-room rental is > 2k with quantum of 320k. Easily 7% yield. Vs Henry old EC at 2.5%. Most condo rental yield is 1.5% to 2% range.

 

[henrylbh]

My HDB 4-room rental is > 2k with quantum of 320k. Easily 7% yield

320k is market value of your 4rm flat?

The quantum my father paid for his 4rm flat was 24.5k and it could be rented for 2k.

 

[Toni90]

Thanks. My thoughts too.
She's not working. Very little in her Cpf left after we bought our first HDB.

If sell your hdb, can you buy two condos with one paid fully in cash? If can, just do.

 

[SBC]

320k is market value of your 4rm flat?

Bought at 323k about 8 years ago. Current value is also around there.
4S at 84 sqm.

That’s the thing with HDB. Cannot appreciate much. But good rental yield.

 

[LexusIS]

Check with u guys.
I'm near 50 years now (time really flies before u know it).
OA 103k
SA 213k
MA 57k

HDB fully paid, no investment done from cpf money and no debt.

Wife is asking if we could upgrade and buy a condo.
I'm thinking it may not be wise to go back into debt when this time should focus on building up the reserves for retirement.
She's not working since over 10 years ago.

What's your opinion?

Best to do your financial review before committing .....

1) How much u will get back when you sell you house?

2) how much will the potential property cost and how much loan you can get. TDSR could be a problem as one bro shared due to your age

3) how much cash/CPF you have on hand on to pay down and service installment

4) Do a worst case scenario test, eg if you are retrenched or stop working, do you have sufficient cash? For emergency?

If both Husband and Wife are still working, potentially you can commit if you have good savings to standby. But if only one party is working and it will stretch your finances.

my advice is just save up the cash, put in some SSB, high yield deposit accounts eg Citibank maxigain, or simply get some blue chip shares when it is cheap.

 

[dork32]

My HDB 4-room rental is > 2k with quantum of 320k. Easily 7% yield. Vs Henry old EC at 2.5%. Most condo rental yield is 1.5% to 2% range.

this sort of calculation is very misleading. you used your purchase price 8 years ago and the current rental.

if i used the purchase price of my condo, 600k (20 years ago) and the current rental 3k, the yield is 6%.

you should use the current rental price and value to make such calculations.

 

[havetheveryfun]

Turned into property thread again

 

[dork32]

Bought at 323k about 8 years ago. Current value is also around there.
4S at 84 sqm.

That’s the thing with HDB. Cannot appreciate much. But good rental yield.

84 m2 hdb is cannot fetch 2k rental these days in the suburbs.

 

[crimsontactics]

this sort of calculation is very misleading. you used your purchase price 8 years ago and the current rental.

if i used the purchase price of my condo, 600k (20 years ago) and the current rental 3k, the yield is 6%.

you should use the current rental price and value to make such calculations.

Why use current when you only paid the previous price?

Sent from . using GAGT

 

[BBCWatcher]

Take my case. My condo could be rented out at about $2,200. Net of maintenance and sinking fund and property tax, rental is about $1,800 against market value of $880k that I just sold. My 5rm flat could easily net 2k against market value of $440k that I just bought. Not much difference?

My HDB 4-room rental is > 2k with quantum of 320k. Easily 7% yield. Vs Henry old EC at 2.5%. Most condo rental yield is 1.5% to 2% range.

Pretty crazy, isn’t it? Welcome to Singapore’s present housing market conditions.

When the market is effectively screaming at you in these ways, I think you should listen. So, applying these present market realities to Greddy88’s case, I think the best way to satisfy the non-working spouse’s desire is via “rental arbitrage”: rent a private condo, live in it, and rent out the HDB unit. I’d also engineer a gap so that you can do a fantastic job remodeling the HDB unit to design magazine standards just before moving back into it, whenever that happens. But for now, in present market conditions or anything like present market conditions, just rent your private condo and rent out your HDB unit. You can satisfy your spouse’s desires (if you both wish), and that’s the financially smart way to do it.

 

[dork32]

Why use current when you only paid the previous price?

Sent from . using GAGT

i can sell my condo for 1.2 mil now or i can continue to hold and collect 3k rental now.

you can buy my condo 1.2 mil now and collect 3k rental or you can hold your 1.2 mil in cash.

use current price is fair to you, me, everyone.

use your own private price is only fair to you.

take henry's example. his 4-room is 24.5k. if he can rent his 4 room at 2k per month, his rental return is 100%. it is a joke if you use such numbers

 

[BBCWatcher]

Turned into property thread again

That’s one of the challenges with CPF and of Singapore, that residential housing (to be more precise) weighs so heavily in financial and optimization decisions. Plus there’s a bunch of emotion and history wrapped up in how people think of housing in Singapore. I get it, but you make a good point that we ought to try to keep separate issues separate.

 

[LexusIS]

Pretty crazy, isn’t it? Welcome to Singapore’s present housing market conditions.

When the market is effectively screaming at you in these ways, I think you should listen. So, applying these present market realities to Greddy88’s case, I think the best way to satisfy the non-working spouse’s desire is via “rental arbitrage”: rent a private condo, live in it, and rent out the HDB unit. I’d also engineer a gap so that you can do a fantastic job remodeling the HDB unit to design magazine standards just before moving back into it, whenever that happens. But for now, in present market conditions or anything like present market conditions, just rent your private condo and rent out your HDB unit. You can satisfy your spouse’s desires (if you both wish), and that’s the financially smart way to do it.

Yeah true. There is a lot of supply in the market for private property. Currently a tenant market.

Eg rent out your Hdb at 2k and rent a 2br condo at 2.6-2.8k in the suburbs. Probably after a yr or so your Wife might complain about the size or in accessibility. Lol

 

[crimsontactics]

i can sell my condo for 1.2 mil now or i can continue to hold and collect 3k rental now.

you can buy my condo 1.2 mil now and collect 3k rental or you can hold your 1.2 mil in cash.

use current price is fair to you, me, everyone.

use your own private price is only fair to you.

take henry's example. his 4-room is 24.5k. if he can rent his 4 room at 2k per month, his rental return is 100%. it is a joke if you use such numbers

I see...

Thank for explaining!

 

[BBCWatcher]

Yeah true. There is a lot of supply in the market for private property. Currently a tenant market.

Yup, and that’s been true for a rather long time now.

Eg rent out your Hdb at 2k and rent a 2br condo at 2.6-2.8k in the suburbs. Probably after a yr or so your Wife might complain about the size or in accessibility. Lol

Greddy88 can test all such propositions quite easily and financially sensibly, too. “Let do it! Let’s move into a private condo, now.” Sign, say, a 2 year or 2.5 year private condo lease, rent out the HDB unit, continue (or start) saving and investing prudently (in an age and risk appropriate way), and see how it goes. The bottom line is that I don’t see any reason why Greddy88 cannot satisfy his (Greddy88 is male?) non-working spouse’s request to live in a private condo. Buying a private condo, no, that financial math does not compute, but living in a private condo, sure, have fun.

After a couple years, at least three outcomes are then possible:

1. Greddy88 has saved up more than enough to remodel their HDB unit to design magazine standards, and they do that.

2. Greddy88 has saved up more funds, and the private condo market has become more attractive to buyers. Then market conditions plus the extra capital might make private condo ownership more realistic.

3. Greddy88 has saved up more funds, and they decide to buy a lovely vacation home in another country. (Although I would start with renting one and see how it goes. I don’t think it makes sense to leap into home ownership in a new environment without understanding what living in that environment is like, via rental.)

Or some combination of the above, particularly 1+3.

 

[greddy88]

Thanks folks for your advice.
Mostly similar and align with my thoughts.
Just need to manage my wife expectations

We have kind of digressed.. Let's return the discussion to CPF

 

[SBC]

84 m2 hdb is cannot fetch 2k rental these days in the suburbs.

Rental at Hougang is still quite good. Believed is much better than SK/PG.

3 bus stops from interchange.

 

[Toni90]

Yup, and that’s been true for a rather long time now.


Greddy88 can test all such propositions quite easily and financially sensibly, too. “Let do it! Let’s move into a private condo, now.” Sign, say, a 2 year or 2.5 year private condo lease, rent out the HDB unit, continue (or start) saving and investing prudently (in an age and risk appropriate way), and see how it goes. The bottom line is that I don’t see any reason why Greddy88 cannot satisfy his (Greddy88 is male?) non-working spouse’s request to live in a private condo. Buying a private condo, no, that financial math does not compute, but living in a private condo, sure, have fun.

After a couple years, at least three outcomes are then possible:

1. Greddy88 has saved up more than enough to remodel their HDB unit to design magazine standards, and they do that.

2. Greddy88 has saved up more funds, and the private condo market has become more attractive to buyers. Then market conditions plus the extra capital might make private condo ownership more realistic.

3. Greddy88 has saved up more funds, and they decide to buy a lovely vacation home in another country. (Although I would start with renting one and see how it goes. I don’t think it makes sense to leap into home ownership in a new environment without understanding what living in that environment is like, via rental.)

Or some combination of the above, particularly 1+3.

She wants to own a condo lah. Not only living in one.