Asked by Anonymous

Should I sell my BTO flat and buy for investment or rent permanently?

I have 9 yo BTO flat that has been fully paid out except refunding back to CPF OA. Am moving to family's place to stay due to family expansion. Originally planned to rent out BTO flat for passive income however realized CPF accrued interest will erode my sales proceed if I were to sell it. Question is should I continue to rent out despite CPF accrued interest eroding my sales proceeds if I were to sell OR do I sell now to get the full proceeds and use them to buy a condo for investment?

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    • Nicholas Woon
      Nicholas Woon, Marketing Director at ERA Realty Network Pte Ltd
      19 Answers, 42 Upvotes
      Answered on 27 Sep 2018


      As you pointed out correctly, your sales proceeds might be eroded away since the HDB resale prices have been stagnant/slightly decreasing since 2013. Hence, selling once you reach MOP is a good strategy to capitalize the profit.

      If you are at a mature estate and near MRT, there might be more value/potential in keeping your unit. If your unit is at a non-mature estate, there is more competition in the newer BTOs. With that said, I would recommend investment property with a condo rather than HDB due to better tenant profile for the former in general.

      Assuming your HDB can fetch about $5xxK in the resale market, with the same amount of money (or a slight top up), you would be able to purchase a 1 bedroom condo. For HDB, tenants usually maximize the quota for number of occupiers (ie. 4-6). With a 1 bedroom, you would expect at most 2 people staying at the unit. The amount of damage/wear & tear at the property between the 2 would be very different during the lease.

      Althought HDB has an unbeatable rental yield, there is intangible cost that cannot be neglected. Hence, I would recommend selling your HDB and buying a condo as an investment property.

      P.S. I would recommend buying a 2BR for investment rather than 1BR in today’s market because it is much easier to sell the former due to ABSD. Then again, this is a discussion for another day!


      It is easier to sell a 2BR in the future as compared with a 1BR because 1BR owners are usually investors while 2BR have a fair share of both homeowners and investors. From experience, many HDB upgraders would not consider 1BR as it is not big enough for their family, so they would only have their eyes set on 2BR and above.

      On the other hand, there are lesser investors in the market now that would buy 1BR due to the steep ABSD. Nowadays, most of them would have a long term plan where they would rent out for the first 10 years and perhaps let their children/themselves stay at the condo after if they decide not to continue renting. Hence, 1BR is less ideal and most people who prefer 2BR if they have the budget.

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