Asked by Anonymous
How good is the rental market right now? Or get a slightly lower than 6k pay and try for bto? Cos I know with the money saved from bto, the investment can do a better job in compounding... for your kind advices please. :) Thanks!
The first property you buy should alway be the one you want to live in (and can tahan living in for life). The investment part should only be secondary and not your main reason for buying the house. This is my personal opinion only. This way, even if rental market is bad, you can alway move into your unit, and you also won't get "stuck" with a property that's inconvenient for you live in, when the property market is down.
My unprofessional 2 bits worth of opinion is, HDB actually can potentially gave you a higher rental yield compared to private condos if you do it right, but you will be subjected to HDB rules. As the cost of HDB is lower, you can potentially get a higher monthly rental compared to your monthly mortgage, meaning you can get extra income per month. But you have to research to find out the average rental in the area and compare against the cost of the unit & your estimated monthly mortgage
The best earnings from private condos is the capital gains you get from selling the condo, especially if you bought it at launch, rental usually will just try to cover mortgage & maintenance fees where possible, so its difficult to get a high enough rent for income, until your mortgage is fully paid up.
In both cases, you need to consider that you can afford to pay the monthly mortgage, even without rental. I understand where you are coming from. It's the 6K Cap that is pushing you to make a decision so you don't regret missing the boat when you go beyond the salary cap. But don't buy for the sake of buying. If you do decide to get a HDB, it should be for the right reasons, and not just to avoid missing a boat.
In the mean time, it doesn't hurt to shop around for a property while you are trying to decide. Was viewing private earlier for 1-2 years but couldn't find one at reasonable price. Took me about 1 year to find the right house after I decided to go for a resale instead. Knew it was the fated one, because I manage to get all emo viewing a house with no reno.
Now is not necessary a good time for property investment as well. As u mentioned, "the investment can do a better job in compounding.." , so u should question why do u need to buy a property now since u do not intend to live in it.
Take some time to understand the property market first. Keep a lookout for new launches and past transactions. Get a feel of the general economic environment. Then when a good property investment opportunity comes along, u will be positioned to go for it.
And u will never know when your significant other will come, then both of u could get an EC then. =D