Target networth

[What2do4life]

Buying REITs and property stocks are very poor way of getting expose to property assets because of too many leakages and many layers of additional costs (plus the fact that you don't own the hard assets anyway) so much so that they become lousy assets to hold over a long term (of 20 years or more)!
In truth, the real value in owning properties are the LAND! (hence FREEHOLD is desired), and you should own yourself to get the max appreciation because of high inflation and massive money printing!

Even Mike that little boy keep claiming that property is lousy to invest in and REITs are much better and yet in real life, he sold all his REITs (and he accidentally leaked saying that he sold all his REITs because he deemed them to be too high price now) and he also refused to tell us he actually bought a property in Philippines! despite claiming that we shouldn't invest directly in properties!

So, moral of the story?

I have to agree on the REIT assessment.

Indeed, freehold is a much better for investment.

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[Sinkie]

I have to agree on the REIT assessment.

Indeed, freehold is a much better for investment.

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IMO, first property should always be a hdb, followed by a freehold unit

 

[What2do4life]

IMO, first property should always be a hdb, followed by a freehold unit

In the old days i agree.

But with the leasehold (owner or lessee) issue, the rate of increase will not be as high for HDB vs private in the medium to long term.

Go for private as the first ppty. Dun lock in yr liquidity and incur opportunity cost.

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[havetheveryfun]

IMO, first property should always be a hdb, followed by a freehold unit

BTO HDB to be exact

 

[revhappy]

Obviously!
Ask you:
- Who pay for the Millions $ salaries of the CEO, CFO, board of directors etc?
- Who pay for the corporate car and chauffeur and expensive meals and even first-class flights of the CEO, CFO, Board of Directors etc?
Since you want to invest in properties, might as well save all these costs and pay yourself to enjoy (by owning the properties directly in your own name) right?!

The slight efficiency of a large real estate company is just not sufficient to negate all the so much more extra costs involved!

I still stick with my statement, property investors took way too high risk and it worked in their favour. The concept of risk adjusted returns needs to be understood. Ignorance doesn't mean there is no risk. Like if you blind fold a man and ask him to walk on the roof wall of a 100 storey building. As he is blind folded and he walks straight, he is not scared and he doesn't fall. Doesn't mean there was no risk. Ask him to walk with eyes wide open and it will scare the **** out of him, leave alone walking on the wall.

We have had subprime crisis in the US and many people lost their homes. In SG too during the Asian crisis many people were under water. So I don't believe that everybody did well all throughout last 30 years in property.

Another point past performance doesn't mean anything for the future.

Sent from Dont Take Any Of My Statment As Investment Advice. Do Your Own Due Diligence. using GAGT

 

[minamikaze]

BTO HDB to be exact

But, if the first property is a HDB, that means married couples both of their "first property" will be tied up. So the 2nd property will incur a hefty ABSD.

 

[Sinkie]

In the old days i agree.

But with the leasehold (owner or lessee) issue, the rate of increase will not be as high for HDB vs private in the medium to long term.

Go for private as the first ppty. Dun lock in yr liquidity and incur opportunity cost.

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Don't get misled or disillusioned by the owner or leasee, it's just a troller or opposition tool to discredit the PAP

You will be absolutely ok if your first purchase is a bto, and hdb will always offer a higher rental yield compared to a condo due to its lower quantum.

And also because it is protected against bankruptcy, it is a very good asset for those who takes risk to grow their money too

Buy a hdb first, a freehold condo can talk later

I have never regret buying my resale hdb

 

[What2do4life]

But, if the first property is a HDB, that means married couples both of their "first property" will be tied up. So the 2nd property will incur a hefty ABSD.

Go for private first!
The landscape has changed with the ABSD, etc. Gone are the profits from HDB!

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[Sinkie]

But, if the first property is a HDB, that means married couples both of their "first property" will be tied up. So the 2nd property will incur a hefty ABSD.

You mean buy condo as first property will not incur absd for your second property?

Anyway another way to avert such restriction is to marry late, buy resale hdb under the single scheme, then another condo using your partner name.

 

[minamikaze]

Exactly, it won't, if only one of the parties own the condo. The other party is free to buy another condo in the future as a first owner.

Marrying late (as in 35-late) is usually not an option for most couples. Waiting till 35 before getting into the property game doesn't seem that wise too (but of course, maybe can invest in equities first, then diversity into property at a later age).

 

[BBCWatcher]

Obviously!

No, you'll have to do much, much better than that. Where are the data to suggest that real estate companies -- and that's plural, they compete against one another -- are less cost efficient than individual investors purchasing one or two properties?

There are all sorts of cost efficiencies that large real estate companies have that you don't, including marketing, advertising, sales, management, bulk purchasing of remodeling and refitting, more favorable access to bank lending, better energy management, special relationships with large tenants (such as corporate housing departments), loyalty point programs to extract more value, the ability to negotiate much more favorable pricing on property insurance (and/or to self-insure prudently at lower cost).... The list is practically endless.

- Who pay for the Millions $ salaries of the CEO, CFO, board of directors etc?

Most CEOs in Singapore's real estate companies are paid under S$2 million. City Developments' and CapitaLand's CEOs are two exceptions, so if that bothers you, don't invest in City Developments or CapitaLand.

But this is a competitive market, both for management and in their businesses. And the cost efficiency in one of the many areas that I listed above utterly dwarfs any of the salaries of these particular individuals.

Where are your data? If individual property investors owning one or two properties each were just so darn more efficient, then why do these large real estate companies even exist? Shouldn't the smaller property investors be clobbering them in the real estate market?

 

[Sinkie]

Exactly, it won't, if only one of the parties own the condo. The other party is free to buy another condo in the future as a first owner.

Marrying late (as in 35-late) is usually not an option for most couples. Waiting till 35 before getting into the property game doesn't seem that wise too (but of course, maybe can invest in equities first, then diversity into property at a later age).

Can always buy first condo under your partner name, then wait for 35 to get the hdb

It’s the same as having child late too

 

[Mecisteus]

Don't get misled or disillusioned by the owner or leasee, it's just a troller or opposition tool to discredit the PAP

That explains all of Ervino posts.

 

[Dividends Warrior]

Some people tend to look at things in extreme. Either this or that. Which one of the 3 banks should I invest in? Should I choose PropNex or APAC realty? Either REITs or physical properties. Why not choose both?
I am vested in lots of REITs, but I am also looking to buy a property soon. Sometimes, there is no need to choose.
Pretty sure I am not the only one doing this. Lots of people live in flats/condos/bungalows/penthouses have REITs too.

 

[BBCWatcher]

Some people tend to look at things in extreme.

I agree, but then you immediately proceed to describe extreme investing.

That is extreme too if you're so heavily overweighting real estate in Singapore (and/or in the region). Why would that specific sector (real estate) and that specific geography both necessarily outperform the other ~99% of the investable world? Real estate happens to be Singapore's most heavily taxed sector, so any such bold forecast has to overcome that starting reality.

Why not just invest in the entire investable world, in all investable sectors? Maybe with a little overweighting in Singapore -- not hard with CPF and a primary residence and emergency reserve funds in SSBs -- if you're planning to retire in Singapore. But what's wrong with the pharmaceutical industry, the renewable energy industry, the Web/mobile industry, the entertainment industry, the heavy construction equipment industry, the financial services industry, the food and beverage industry, or any of the other sectors that are not real estate? Why are they any more or less worthy of your investment affections?

 

[What2do4life]

I agree, but then you immediately proceed to describe extreme investing.

That is extreme too if you're so heavily overweighting real estate in Singapore (and/or in the region). Why would that specific sector (real estate) and that specific geography both necessarily outperform the other ~99% of the investable world? Real estate happens to be Singapore's most heavily taxed sector, so any such bold forecast has to overcome that starting reality.

Why not just invest in the entire investable world, in all investable sectors? Maybe with a little overweighting in Singapore -- not hard with CPF and a primary residence and emergency reserve funds in SSBs -- if you're planning to retire in Singapore. But what's wrong with the pharmaceutical industry, the renewable energy industry, the Web/mobile industry, the entertainment industry, the heavy construction equipment industry, the financial services industry, the food and beverage industry, or any of the other sectors that are not real estate? Why are they any more or less worthy of your investment affections?

Spoken like a true investor.

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[Toni90]

Dont know why people still argue about stock or properties. Should do both.

 

[BBCWatcher]

Dont know why people still argue about stock or properties. Should do both.

Exactly! And you automatically pick up ample real estate exposure if you do things like buy a primary residence and buy a broad stock index fund. Consider the Straits Times Index, for example, which you can buy via ES3. It contains these listings among the 30:

CapitaLand
CapitaMall Trust
CapitaCom Trust
City Developments
Ascendas Real Estate Investment Trust
Hongkong Land Holdings

plus these:

Genting Singapore PLC
Keppel Corp
Jardine Strategic Holdings Ltd
Jardine Matheson Holdings Limited

The first 6 are pure real estate sector companies -- that's all they do. The next 4 are heavily involved in real estate, as a substantial part of what they do. And I'm not counting the banks (DBS, OCBC, UOB) which are obviously heavily involved in real estate. So when you buy ES3 (or G3B), you're investing in the local and regional real estate sector, a lot. Unfortunately you're not investing in many, many sectors of the global economy -- 30 stocks listed in Singapore isn't enough coverage to do that -- but local and regional real estate you're definitely getting, big time.

Other stock indices contain real estate companies, including the U.S. S&P 500. The STI is perhaps the world's most real estate heavy stock index (something to check), but practically every broad stock market index includes plenty of real estate exposure.

Having too little real estate in your investment portfolio isn't a real world problem. Having too much? Yes, that can happen.

 

[peterchan75]

Target networth... as high as it can be.
It ain't gonna to happen if there is no income or wealth generator.

I know it's hard to stare at the horse's arse. That's the way it is....

 

[malthead]

Anyway, my original question isn't how much is your target networth but rather

will you likely revise your target networth higher whem you reach it and continue with your lifestyle or will you change (ie slow down) your lifestyle or career to pursue your other interests

hope to hear from people who experienced it