Would it be better to sell my BTO due to 'old age' of the flat or rent it out? - Seedly
Seedly logo
Seedly logo
 

Property

HDB BTO

Lifestyle

Anonymous

Asked on 07 Oct 2019

Would it be better to sell my BTO due to 'old age' of the flat or rent it out?

Currently working overseas and have a 4-room, 30 years old HDB flat near Simei MRT.

Caught in between renting out my HDB or selling it? Coz given the ‘old age’ of the flat, think it is better to sell?

0 comments

4 answers

Answer Now

Answers (4)

Sort By

Meiling Tan
Meiling Tan
Level 4. Prodigy
Answered on 08 Oct 2019

It's a toss-up in the current market conditions. It's been a buyer's market for resale flats for the past couple years (i.e., buyers are spoilt for choice, so if your unit doesn't stand out, it might be difficult to sell it).

That said, if you're willing to put in the necessary work before selling it, now might be the only time you have in the next few years. Most of the major financial indicators are that Singapore is headed for a technical recession, which would negatively impact property prices.

Zhi Cheng raises a good point though: if you're coming back from your overseas work in a few years, it might be worth it to keep the property so you have a place to stay.

0 comments

👍 1

It really depends on the type of income you want as well as other factors like the current property market and your future plans.

Looking for a lump sum where you can immediately use for other forms of investments?

Sell your flat would perhaps be the better option.

Looking for consistent cash flow from your property AND you wish to have a home if you ever move back to Singapore?

Perhaps renting it out would be a better option.

Either way, I have with me property experts that can help you with selling/renting of flats. DM me if you have any questions!

2 comments

👍 1
KLY W

08 Oct 2019

Thanks for your reply, I just scare my 30 years old HDB will depreciate faster than I can imagine
Samuel Lee
Samuel Lee

08 Oct 2019

Maybe I could further clear your misunderstanding - Depreciation is the cost of your property over the number of years left on your lease. This is at a constant rate and is one of the factors for the VALUE of the flat. Your value of the flat however fluctuates according to the market valuation: Demand-Supply, Depreciation etc. However once again the question you should ask yourself is if you see yourself coming back to Singapore to stay once more, as this affects your strategy with regards to handling this particular asset.
Alvin Teo
Alvin Teo
Level 6. Master
Answered on 20 Oct 2019

What would you do with the money if you sell?

The key question is always the same: how to best optimize your money?

Firstly, is working overseas permanent?

When it comes to HDB, I try not to look at “current market conditions” but rather do the simple math, if you rent out your flat, it could fetch $1200 a month, you have to pay to cover some tax and commission so maybe you end up with about $10k a year extra.

If you sell the flat for $400k and put all the proceeds into CPF OA, you can get 2.5% annually compounded that is risk-free $10k.

Or if you invest it to get 5%, you get $20k annually.

The numbers surely vary so do your own homework before taking action.

0 comments

👍 0
Grace Lim Yan Zhen
Grace Lim Yan Zhen
Level 3. Wonderkid
Answered on 20 Oct 2019

I would recommend you to rent it out.

If you rent it out, you will get cashflow.

For example, based on a 4 room hdb flat, monthly rental is $2000 * 12 = $24000 per year. Furthermore, your house got only left 80 years.

So yearly rental which is $24000 * 80 years = $1920000.

So if you rent out for 80 years, the total rental earned would be potentially more than your capital gain.

Capital Gain = Sell Price - Buy Price of your property.

However, if you use this capital gain to reinvest, then I recommend you to sell your BTO due to 'old age'.

After you sell your property, you will receive capital gain.

You can use your money earned from capital gain, to reinvest in other financial instruments.

0 comments

👍 0