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Anonymous

19 Sep 2019

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Should I sell my fully paid up HDB flat?

The flat is currently tenanted and we live in another property. Location is D4 and mins to MRT, so the rental yield is around 10% of the purchase price 10 years ago, or ~$3k per month. Transacted price has been quite stable since MOP. Should I cash out for other investment opportunities or continue renting it out?

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Loh Tat Tian

19 Sep 2019

Founder at PolicyWoke (We Buy Insurance Policies)

My opinion is this.

Rental Yield should be irrelevant of the price you paid for but should be evaluated as at current market price. If there is no better investment that can give you a better yield at the same or lower risk, you should just continue to rent it out. This is because of the opportunity cost to redeploy the funds (but also gives you reinvestment risk),

However, do take note of the few problems with HDB flats. As it age, the price of the HDB would start to drop (especially pass the 60-70 years lease left and drop sharper) due to the restriction of buyers. Hence, you may wish to shop for a newer HDB with longer lease to preserve the value, while having rental income, if you really feel HDB property rentals are a good investment.

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