Is there any difference between long term rentals and HDB 99 yr lease?

[Shiro Neko]

Actually I don't get it whats the difference between renting a property for 20 years through a lease agreement and a 99 year lease with the government?

End of the day aren't both parties long term renters who have no equity or remaining after their lease ends?

 

[SaintPeachie]

You can sell your HDB and profit

 

[Adonai.avatar]

The difference is that, you can rent your hdb, and also sell the remaining portion of lease.

You can’t do that for long term rate.

Posted from PCWX using iPhone11,2

 

[Laguna123]

For long term rental still need to pay for property tax?

 

[Shiro Neko]

You can sell your HDB and profit

but can be loss too right? So its really a double edged sword. Not to mention resale HDB prices have peaked about a decade ago. So in reality, most owners have had negative CAGR over the past decade and this is amplified by leverage.

The harsh reality is that, with the vast majority of HDBs reaching their tail end of the lease, what was once assumed to be an asset that only appreciates is now rapidly depreciating due to the extreme time decay associated with the tail end of a lease, much like a car.

Picture here is the price index of HDB from 2012 to this quarter as we can see it has peaked and hardly recovered except for recently reason due to lower interest rates. But with interest rates almost at 0, there aren't much catalyst left for upside unless pap suddenly announce all HDB convert to freehold

 

[SunnyStall]

99 yr lease if downstairs complain water leaks, owner got to pay some money to repair.

Pay upfront for the lease, also if lift upgrade need to pay also.

 

[wwenze]

One is you buy the rental upfront and you can sell it

It's like one is CFD / futures and the other is call options.

 

[Shiro Neko]

The difference is that, you can rent your hdb, and also sell the remaining portion of lease.

You can’t do that for long term rate.

Posted from PCWX using iPhone11,2

sure you can sublet like WeWork, but you carry an insane amount of principal capital risk. Which a renter does not. And you also expose yourself to significant opportunity cost.

Reselling lease is not a common phenomenon in singapore and frankly the cash offered for reselling lease is more often than not, below market prices.

 

[zphoe222]

Good question
LT rental of HDB direct from HDB is not common and accessible to all though

thoughts
- LT rental vs buying 99y lease hdb is akin to long term car rental vs buying a 10y coe cars

- do the numbers and see which option works for you and weigh the pros and cons.
-

 

[Shiro Neko]

For long term rental still need to pay for property tax?

if rental no need, but if long term rental for government 99 years (i.e leasehold) need to pay property tax

 

[wwenze]

but can be loss too right? So its really a double edged sword. Not to mention resale HDB prices have peaked about a decade ago. So in reality, most owners have had negative CAGR over the past decade and this is amplified by leverage.

The harsh reality is that, with the vast majority of HDBs reaching their tail end of the lease, what was once assumed to be an asset that only appreciates is now rapidly depreciating due to the extreme time decay associated with the tail end of a lease, much like a car.

Picture here is the price index of HDB from 2012 to this quarter as we can see it has peaked and hardly recovered except for recently reason due to lower interest rates. But with interest rates almost at 0, there aren't much catalyst left for upside unless pap suddenly announce all HDB convert to freehold

Price index =/= nominal prices tho. I mean compare 2012 and 2020 and price has doubled.

The problem is this index is created by the Singapore government so it has as much reliability as a space rocket built by a flat-earther.

 

[buttbERry]

Under Long term Rental, any issue is the owner daiji lor.. so u just feedback to owner

99 year lease means u settle the daiji yourself

 

[Shiro Neko]

99 yr lease if downstairs complain water leaks, owner got to pay some money to repair.

Pay upfront for the lease, also if lift upgrade need to pay also.

need to directly pay for lift upgrade???
or you mean indirectly like gst increase?

 

[mewmew]

under ltr chiu cannot sell

 

[wwenze]

Good question
LT rental of HDB direct from HDB is not common and accessible to all though

thoughts
- LT rental vs buying 99y lease hdb is akin to long term car rental vs buying a 10y coe cars

- do the numbers and see which option works for you and weigh the pros and cons.
-

When 80% of the population live in subsidized housing and one organization has monopoly on subsidized housing, you can throw all hopes of doing pros and cons comparison out the window.

Like imagine your finance strategy involves putting a lot in CPF and retire at 55 and suddenly new rule bam minimum sum.

 

[undiscern]

You can sell your HDB and profit

Again and again, people just choose to ignore this fact.

 

[SunnyStall]

need to directly pay for lift upgrade???
or you mean indirectly like gst increase?

Last time no lift, then build all level got lift, you need to pay.

 

[Shiro Neko]

Last time no lift, then build all level got lift, you need to pay.

wtf i never hear b4
wonder if those people feel song anot

 

[evildoer]

knn if hbd transcation include land value.. when 99 years come they should collect back at 0 value... they should have return us a portion of the landvalue..

 

[NumberX]

One will end before you die.
The other will end after you die.
Still no different?