01 Aug 2021
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
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.
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