Is it wise to buy a 2nd floor HDB resale unit at Punggol which is cheap but next to rubbish collection point?

A few things to consider;

1. Did you go while they working at the collection centre? If not you might want to, to check that it is indeed clean with no smell

2. As some of the other commenters mentioned, you'll likely get a lower rent for the unit compared to other areas. If you wouldn't want to live in the place, what makes you think other people would want to live there, unless its super affordable. In this case, you might get less desirable tenents that may or may not keep you unit in good condition. Hence your upkeeping cost might increase.

3. Other than lower rent, if you want to resell it, it cost will be lower than the surrounding areas, especially if the cleaniless level falls over time.

4. Are you ok to keep this asset, or do you forsee you will need to sell this in future to obtain additional cash.

If you are still okay to proceed with the sales, try to see if you can get a further discount. (note that future buyers will do the same to you in future if you want to sell the unit)

I would do it, especially if it is, as you say, clean with no nasty odours and free of pests. Bear in mind the wear and tear that comes with age though.

The best way to look at this is to see what the rental yield for is. While you can get is at $60k lower than average (quite sizeable), the amount of rent you can command might be lower as well.