Asked by Anonymous
Asked on 23 Apr 2018
its good to be a tenant today - rents are dirt cheap compared to what it was 4-5yrs back. rents are not expected to increase unless there's a policy change wrt to immigration laws and singapore being flooded with more expats.
if you rent $3k a month for 5yrs - thats $180k. is it enough for your downpayment and stamp duties incurred for your condo purchase? probably yes.
over the next 5yrs, you only pay for your interest portion of your mortgage + all the misc running fees of owning a property in singapore.
you definitely get back your principal after 5yrs (unless we see a market C R A S H. if it does, then every one is screwed. you. me. everyone. cos if Pte market crashes, HDB will crash harder)
dont buy an agent's hype of which project is the best buy today. DYOR and find out whats the best option in the market today in terms of entry price and growth areas that will help support price increases.
with the right DYOR, you'll get back your principal AND a healthy capital profit on your purchase.
if you buy a pte today, do you have to wait for 5yrs before you do anything? potentialy if your property increases in price from 900k to 1.2mil in 3 yrs, dont need to be greedy and hold on longer. you can already cash out. since you have a time frame of 5yrs, the next two years you have a $300k kitty to pay for your rental (since that was your original alternative).
For any form of Property Investment, we would recommend holding a longer term. As property investment is usually considered as a hedge against inflation. At the current market, property prices are on an uptrend and I agree that there is a very high chance that property prices will appreciate quite a fair bit 5 years from now. However, we cannot guarantee that it will not drop 5 years from now. Hence, longer holding periods will allow you to have more flexibility to ride out the volatility in property prices if any. And for you to gain real appreciation, you will have to factor in the stamp duties, monthly maintenance as well as commission fees for the sale of the property.
On the other hand, if property prices do increase in your favor, you will be able to retain your money as well as make a handsome profit should the market situation allows.
For your case, I will recommend that you draft out your finances for both situations and make he comparison. For example, what would your rental outlay be like for a period of 5 years vs the outlay for holding/owning a property for the next 5 years. Factor in the costs and estimate what the selling price of the property should be like in 5 years and how much should you sell your property for in order for the investment to make sense.
With the numbers in hand, you can decide if you should rent or own a property base on what you value in life.
Hope this helps.
Do you believe in Singapore story?
Can Singapore expand Bigger?
Yes and No - Buy instead of rent.
No and Yes - Rent and leave Singapore wish you all the Best.
I believe the property market is always on the up rise And always a good investment provided that the location and property is a good one.
There are always risks of a depressed property market in 5 years so it has be an acceptable risk that it would be very little or even a margin lost.
however I believe you can always hold longer and sell at a later date even if you leave SG
5 years is not long enough time to cover the the purchase price if the ppty price does not appreciate enough.
And you are staying in the condo. Even when u sublet it out, the management fee could increase and go against your odds.
Anytime you could not pay back the bank, you risk more complication in paying more and losing the ppty in an auction.
Is better to save up since your 5yrs plan is to go home.
Is better Not to be in debt and put urself in a disadvantage situation.
Hope my reply helps.
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