Advice for After MOP

Hi all, I would like to seek some advices from the community. I am currently living with my wife (no childrem but have plans to start in 2023) in a new 5-rm BTO unit. We are in our 30s. The unit will reach MOP in around 3.5 years. I am the only current owner of the unit and my wife is an occupier. Each of us have plans to get our new small private property, hers being the 1st and mine being 2nd (current ABSD at 12% 😅). It is for investment purpose as we didnt want to upgrade to private and have to work so hard to pay off the mortgage loan. The concept that I have is that I can leverage on debt to buy sg property and I can use the rental income to offset the mortgage loan. I understand that the 2nd mortgage loan is capped at 40% or 45%, can I check if this still hold if I pay off my remaining mortgage HDB loan using a mixed of CPF and cash? What are the possible

I currently have around 50k in cash, 50k in ETFs, 150k in stocks, 400k in Crypto. I have plans to sell off part of my Crypto to materialise the gains.

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12 Aug 2021

Hi YJ, thanks for raising the points of required taxation. But that having said, if I reap the capital appreciation from my HDB and buy another private property living in it, I am essentially raising my own living expenses with no rental income and throwing in whatever capital appreciation that I have gotten from my previous sale. If after living for another few years, I upgrade again, I will be stuck in this rat race.

Hence, if I buy a small unit at 700000, we are thinking if it is worthwhile. Didn't compute in renovation costs, maintenance cost, income tax though. Not too sure if I miss out on any details.

Price: 700000

Down Payment: 20% of 700000 = 140000 (If mortgage loan can be at 80%)

ABSD: 84000 (@ 12%) one time pmt

Property Tax: 6% of 21000 AV (Rental yield at 3%) = 1260 per year

MSCT = 300 per month / 3600 per year

Mortgage Loan (@1.88% over 30 years) = 2036.43 (Mortgage Loan covered by rental yield of 3%)

Total Expenses:

140000 + 84000 + (1260+3600)*30 = 369800.

Total Asset Value:

700000 if inflation at

1% over 30 years it is 700k c (1.01)^30=943k

2% over 30 years it is 700k x (1.02)^30 = 1268k

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1M45

Edited 10 Aug 2021

Go for capital appreciation. Rental not really worth it, must pay income tax, property tax , maintainence fee, utilities.... and dont pay ABSD (unless you want to contribute to nation building), just sell the HDB and upgrade.

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