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. - Seedly

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)

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.

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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?

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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...