As a single person with limited earnings/savings, should I BTO a 2-room flat by 35 and upgrade to a resale after the MOP, or save up and buy a resale when I'm even older? - Seedly
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Anonymous

Asked on 25 Oct 2020

As a single person with limited earnings/savings, should I BTO a 2-room flat by 35 and upgrade to a resale after the MOP, or save up and buy a resale when I'm even older?

I'm a 30 year-old single person and can't marry in Singapore. I would like to own my own home eventually. Does it make financial sense to BTO a 2-room flat and upgrade after the MOP for a larger resale flat; or better to tough it out and buy a resale straightaway when I'm older? Not considering to rent until I buy my flat. Thoughts?

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Mohd Fahan Fahan

Mohd Fahan Fahan

Level 2. Rookie

Answered on 03 Nov 2020

I want to check I want to check how to apply about BTO 2single house this is my first time

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Jeff Yeo

Jeff Yeo

Level 7. Grand Master

Answered on 28 Oct 2020

I would say get the BTO and focus on saving up and investing for retirement.

Top up your CPF and pay with cash for the BTO if possible.

This would be the more secure path. you can always plan for an upgrade later when you earn more or maybe have a change in your status.

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As a Singaporean, we should make use of our privileges. As long as you're able to stay in Singapore for 5 years during the Minimum Occupation period, you should get a BTO. if you're not planning to stay in Singapore you could rent it out while you're in overseas. When you retire, you could sell it off and make it part of your retirement fund.

This is what alot of Malaysian PRs are doing. It also works for them because their country has a lower cost of living than Singapore.

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Willy Tan
Willy Tan

27 Oct 2020

Sorry but your information is outdated. Been nearly a decade but ONLY SINGAPORE CITIZENS are allowed to rent out the whole HDB after the 5-years MOP. PRs - regardless of nationality - are not allowed to rent out the whole HDB. PRs are also not allowed to own a 2nd residential property in Singapore while holding on to a HDB. Only Singapore citizens are allowed to do that!
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It's a tough question. I presume you have no intention to stay in a 2-room flat in the long term?

BTO is a discount, so it will definitely ease your cash/CPF. Have you checked if this discount for 2-room flats is significant (versus 2-room flats in the resale market)? Have you also checked the demand trend for 2-room resale flats? I am not sure how easy it will be for you to sell. And in another 5 years, the trend may change for the better/worse...

Also, if you BTO, it will be at least another 10 years (more like 10 + number of years to BTO completion) before you move into your dream home... Still, the discount can be tempting...

Last but not least, do take into account renovation/furnishing costs. Can't really imagine keeping own home empty/unfurnished for 5 years...

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