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Anonymous
How much debt is acceptable?
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Oliver Siah
02 Aug 2021
Co-Founder at Fraxtor
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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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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.