Asked 3w ago
The question is how much ROI is satisfactory for you?
Buy, Wait and Rent is one of the better approach, as the main bulk of your payment is paid by the tenant.
Once after 3 years, evaluate options again, due to Seller stamp duty if sell within 3 years.
Let's use an example of a 3br in Punggol.
If you buy at 1.2m, rental is 2.6k per month. Loan $900k
If you use 29% as downpayment ($332,600)
Monthly installment is $3102
Yearly installment is $37,224
Rental per year is $31,200.
Maintenance $300 *12 = $3600
Property Tax is $2200
Agent Fee is $1391
At the end of the year, every year, looking at negative cash flow of $13,215
If 3 years, will be $39,645
After 3 years of paying $3102 monthly installment,
Total payment of $3102 * 36 = $111,672
Interest = $38,917
Principle Paid = $72,755
Outstanding Principle Left is $827,245
Total cash outlay - $332,600 + 39,645
If sell at 1.3m
1.3m - 827,245(Loan) = $472, 755
Profits made: $472,755 -372,245 = $100,510
Over 3 years, 100,510 / 372,245 = 27%
If you feel that this is satisfactory for you, then sell.
Usually my rule of thumb is that After 3 years, if property appreciated more than 3 years of rental collectible, can consider selling.
If below 3 years, can still consider renting out.
After selling, recycle your cash to buy another property.
Selling BTO at MOP. But that leaves you without a home.