facebookCouple with combined income of $8k. Fully paid hdb. Cash savings and investments $160k. OA $50k. Plan to rent the whole hdb out and purchase a 2 bedroom condo to stay. - Seedly

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          Anonymous

          01 Aug 2021

          CPF

          Couple with combined income of $8k. Fully paid hdb. Cash savings and investments $160k. OA $50k. Plan to rent the whole hdb out and purchase a 2 bedroom condo to stay.

          Can we afford a 2 bedroom condo with our situation? Thanks

          7

              Discussion (7)

              What are your thoughts?

              Elijah Lee

              Elijah Lee

              12 Aug 2021

              Level 18·Independent Financial Advisor at Phillip Securities (Jurong East)

              Hi anon,

              Let's just do the maths.

              A second residential property requires cash downpayment of at least 25%.

              Assuming you wipe out your bank accounts and liquidate all investments, you have enough for a condo worth $160K/0.25 = $640K. This is not even considering the fact that the ABSD is $76.8K which you can pay $50K from CPF OA, and the rest from....borrowed money? (Please don't)

              A search on property guru at this point in time reveals exactly SIX 'two-room' condos for sale under $640K (https://www.propertyguru.com.sg/property-for-sa...)

              All of them are 506sq ft or smaller. All.

              If someone told you that you can afford a two bed room condo, they aren't wrong mathematically, but there is no way this is a practical move. Even if your rental income comfortably covers your mortgage payment, all you need is for your tenant to vacate for a couple of months and you'll be under stress to meet mortgage payments AND the condo MCST at the same time.

              Reply

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                  Lim Boon Tat

                  Lim Boon Tat

                  02 Aug 2021

                  Level 10·Mathematics at Cambridge University

                  Perhaps more useful to ask: what needs to go wrong for you to regret this purchase?

                  Reply

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                      Take note of:

                      1. The amount of loan you can take. You need to do down payment and pay all the ta...

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