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

βˆ™

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

Discussion (7)

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Elijah Lee

12 Aug 2021

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

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Let's just do the maths.

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

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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)

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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...)

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

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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.

Zed

Edited 02 Aug 2021

Just a Software Developer at Tech Company

Do consider thinking about how long you can survive if your tenant run roads and one/both losing the work income. Think it is too far fetched? Go watch the recent video regarding people who lost jobs especially the Singaporean example due to the pandemic in CNAInsider. I guess you are trying to do something similar to the house hacking plan like the US ppl but it will be super hard to replicate in Singapore due to ABSD and tons of regulations so good luck on that.

View 2 replies

Lim Boon Tat

02 Aug 2021

Mathematics at Cambridge University

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

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