facebookHave about S$400K in cash & another S$200K in investments, no other debt/obligations, alr co-own a 3room flat with parent. At this point, is buying a condo ~S$1.5M risky? - Seedly

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Anonymous

01 Aug 2021

Property

Have about S$400K in cash & another S$200K in investments, no other debt/obligations, alr co-own a 3room flat with parent. At this point, is buying a condo ~S$1.5M risky?

How much debt is acceptable?

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Oliver Siah

02 Aug 2021

Co-Founder at Fraxtor

It seems like debt is the least of your concern in this transaction. There are a few property cooling measures which can dampen your plan. You can take a look at this: https://www.fraxtor.com/post/singapores-propert...

Since you already co-own a property with your parent, your condo will be subjected to 12% ABSD. For a property investor, entering at a price of 12% above market price don't really make financial sense. You should look to sell your interest in the flat back to your parent before acquiring the condo.

To purchase a condo at $1.5 million, you will need around $375k + $44,600 for stamp duty + $3,000 for conveyancing in cash or CPF. You also need to get a loan for the remaining $1.125 million which works out to be a $4,500 per month mortgage. If the repayment is comfortable to you at your current salary and expenditure levels, I don't foresee too much risk in taking on this debt. Your current $200k in investment (which i assume is liquid) is more than enought to tide you over in the event of any unforeseen circumstances.

All the best in your property investing advanture.

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Having debt is not risky, need to know your affordability. Need to go bank ask. The bank also wont loan to you, if you are not eligible.

Buying a condo, on the other hand, you must do your research, like any investment, not all condo will make $$$. But if you choose the right condo and enter at right price will be very profitable.

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