My two cents. I think it is important to note that we will not be seeing the same easy interest rate environment nor the same low inflation environment we had if the last decades; what had actually fuelled affordability for real estate. I too owned purchase my landed in D 10 when I was in my early 30s with hubby in early 2000, back then it was so easy to get a mortgage. Decades later, I am happily back in a condo in D 10 next to MRT; no more mortgage. I think upgrading is always positive but taking on a huge mortgage is not advisable, not matter how secure you feel your job is. Between hubby and I, we have been retrenched 4x, from different industries. Never assume you are safe.
In my early years, I was taught the typical Loan to Total Annual Income ratio should not be more than 4-5 times. Of course as years go by, banks are finding new ways to avoid breaching lending thresholds including pay interests only schemes. Quite easy to overstretch nowadays. But I would exercise caution as the economic environment is fast changing. Putting the interest rate discussion aside, I think one should consider the ever changing life needs and also external events which one cannot control including advent of AI, geopolitical risks eg wars, more disruptions will certainly take place. Sources of good income today may be gone or eroded tomorrow. Best to exercise caution and live happier within one’s means. I don’t think it’s worth it if the higher financial stress brings broken marriages and family relationships.
Can't be further from the truth. ABSD and TDSR have both eliminated overleveraging. Household balance sheets in singapore havent been as de-levered as it is in 10years per MAS as of end of early 2024. We are no longer like how we were in 1997. One SGporean won't have more than one property and there is TDSR and SSD to prevent overspeculation and overleveraging. The government is shutting the doors to foreigners for now with 60% absd amidst tremendous amount of major construction projects lining up that will sure to keep construction costs high- MBS, RWS/USS, Changi T5 (size of T1 to T4 combined), MRT lines, new expressway, East coast plan, Marina South waterfront. Don't buy soon, then no need buy aldy once foreigners return (the 60% absd wont stay forever and govt giving us chance now).😢
thank you for sharing! On your point about interest only schemes, they have been banned ever since i entered the industry hahah. So i dont think its as easy to overleverage today, as compared to the pre-TDSR, ABSD years. That said, its still a huge committment and i relish the challenge. Wish me luck hahah.
wah, that's probably a better answer than what most agents can give. very impressive. i dont think government will lift ABSD for foreigners though. Unless, theres a black swan event and they desperately need foreign capital to support our currency/economy. And even if they do lift it, it might be temporary. Or, limiting them to buy new developments or developments in the core central region like D1 or D2. So that they dont knock the balance of the wider market.
Thanks for your sharing , for investment one bedder or resale 2 bedder for renting out , which is better ? but for 2 bedder renting our even near mrt , the positive cash I have only about $1500 after montage and all the fees factor . Pls advise . Tks
are you comparing 2x 1br new launch vs resale 2br? id pick 1 x 2br. perhaps a dual key would be even better. it leaves 1 name free. to explore future opportunities. also, for 2x 1br, you are most likely paying more maintenance fee than 1x 2br. assuming it hits TOP and you are holding onto it to rent out (you should prepare for this eventuality as 1br are tough to sell on TOP)
Your loan is almost 4 mil. The monthly instalment of 16.8k at an interest rate of 3.0% will be substantial of 10k, i.e. 120k interest per year. How do you factor this in your financing?
well my answer is going to be pretty multi faceted hahah how do i factor the mortgage and interest into my financiang? 1) most importantly, is to ensure i have sufficient sources of income to sustain the mortgage. 2) in the event i can't, i'll rightsize back to a condo. In all likelihood, be able to pay that off fully utilising all the profits. 3) 10k might sound like alot in interest, but i do need a place to stay and help me grow my assets. what's my alternative? well i could rent a smaller place and purchase a place for investment and rent out. then nobody will be watching this video😂 we also need to consider the interest as a proportion to asset size and income.
i'm not well verse enough in investments to yield sufficient returns on my 1.5m cash that will allow me to rent a similar property. assuming a 12k rental, that'll require a 12% ROI p.a. , just to cover the cost of renting. and we've been burnt in investments before. so there's trauma there as well hahah. so we figured that it'll be better to put the money into something that i spend all my time studying. hopefully it'll turn out well!
i was referring to my earlier comment " 10k might sound like alot in interest, but i do need a place to stay and help me grow my assets. what's my alternative? well i could rent a smaller place and purchase a place for investment and rent out." i do think i put alot more facts and figures into my videos as compared to others. But nowhere near perfect. will try harder!
A few questions: 1. Your calculations did not factor in property tax 2. Your calculations did not factor in interest payment either 3. The sale of parc esta definitely cannot afford to tear down and rebuild a landed property. Just the rebuild will cost 2 million at least.
thank you for the questions! if you're pointing out about the property tax and interest on the landed. i'll put that into the next video. for my first 2 properties, they were both rented out, so the tenants kinda paid for those expenses. i didnt factor rental income into the calculations to balance those off. on the rebuild, i'll be taking a construction loan. Which again, i'll be explaining in the next video. Dont forget to subscribe so you dont miss it 😊
most welcome! i must admit, that is 1 thing ive been procrastinating about hahah. But we're well covered on the liabilities should anything happen to either of us.
QE you mentioned as a driving force in the past and i agree. But we are QT now. You conveniently omitted it. Good you made profits , i did as well. But instead of increasing my exposure at market highs i cash out. Market doesnt always go up. Recent transactions will show we are in overpriced territory. Your landed can hold value but might not appreciate the rate you want it to . Expext stagnation for next 5 yrs.
What about the cost of loaning? I.e. Interest cost. That eats into your "profits" significantly and was not mentioned. As well as property tax of your current property and the opportunity cost of sinking 1.3m cash into downpayment.
if for own stay/school, i dont think so, its a good quality development in an area (around 1km of Rulang especially) with quite limited supply. for investment, then it really depend on what's your budget and what are the alternatives available
On rich people not selling and hoarding supply due to absd? Not true. Every 2 days a new gcb or bungalow for sale. Why? 1.Quantum. you can make better money else where and not many can buy 10m bungalows. 2. Property tax killing the rich. 32-36% property tax. Cost to hold these assets have gone up by so much. Not just interest rates but taxes... and opportunity cost from cash and profits stuck there
thank you for sharing! that's a really fair point😊 happy to learn too, i dont profess to know everything! still working my way up to the GCB market hahah
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My two cents. I think it is important to note that we will not be seeing the same easy interest rate environment nor the same low inflation environment we had if the last decades; what had actually fuelled affordability for real estate. I too owned purchase my landed in D 10 when I was in my early 30s with hubby in early 2000, back then it was so easy to get a mortgage. Decades later, I am happily back in a condo in D 10 next to MRT; no more mortgage. I think upgrading is always positive but taking on a huge mortgage is not advisable, not matter how secure you feel your job is. Between hubby and I, we have been retrenched 4x, from different industries. Never assume you are safe.
thank you for your sharing! hopefully with some luck and hard work, we can enjoy a retirement like yours :)
In my early years, I was taught the typical Loan to Total Annual Income ratio should not be more than 4-5 times. Of course as years go by, banks are finding new ways to avoid breaching lending thresholds including pay interests only schemes. Quite easy to overstretch nowadays. But I would exercise caution as the economic environment is fast changing. Putting the interest rate discussion aside, I think one should consider the ever changing life needs and also external events which one cannot control including advent of AI, geopolitical risks eg wars, more disruptions will certainly take place. Sources of good income today may be gone or eroded tomorrow. Best to exercise caution and live happier within one’s means. I don’t think it’s worth it if the higher financial stress brings broken marriages and family relationships.
Can't be further from the truth. ABSD and TDSR have both eliminated overleveraging. Household balance sheets in singapore havent been as de-levered as it is in 10years per MAS as of end of early 2024. We are no longer like how we were in 1997. One SGporean won't have more than one property and there is TDSR and SSD to prevent overspeculation and overleveraging. The government is shutting the doors to foreigners for now with 60% absd amidst tremendous amount of major construction projects lining up that will sure to keep construction costs high- MBS, RWS/USS, Changi T5 (size of T1 to T4 combined), MRT lines, new expressway, East coast plan, Marina South waterfront. Don't buy soon, then no need buy aldy once foreigners return (the 60% absd wont stay forever and govt giving us chance now).😢
thank you for sharing!
On your point about interest only schemes, they have been banned ever since i entered the industry hahah. So i dont think its as easy to overleverage today, as compared to the pre-TDSR, ABSD years.
That said, its still a huge committment and i relish the challenge. Wish me luck hahah.
wah, that's probably a better answer than what most agents can give. very impressive.
i dont think government will lift ABSD for foreigners though. Unless, theres a black swan event and they desperately need foreign capital to support our currency/economy. And even if they do lift it, it might be temporary. Or, limiting them to buy new developments or developments in the core central region like D1 or D2. So that they dont knock the balance of the wider market.
Thanks for the insights. Valuable. Do you hold 1-1 discussion on our portfolio?
Yes we do! WhatsApp us at 81555656
Thanks for your sharing , for investment one bedder or resale 2 bedder for renting out , which is better ? but for 2 bedder renting our even near mrt , the positive cash I have only about $1500 after montage and all the fees factor . Pls advise . Tks
I mean cash $1500 per month
are you comparing 2x 1br new launch vs resale 2br?
id pick 1 x 2br. perhaps a dual key would be even better.
it leaves 1 name free. to explore future opportunities.
also, for 2x 1br, you are most likely paying more maintenance fee than 1x 2br. assuming it hits TOP and you are holding onto it to rent out (you should prepare for this eventuality as 1br are tough to sell on TOP)
Your loan is almost 4 mil. The monthly instalment of 16.8k at an interest rate of 3.0% will be substantial of 10k, i.e. 120k interest per year. How do you factor this in your financing?
well my answer is going to be pretty multi faceted hahah
how do i factor the mortgage and interest into my financiang?
1) most importantly, is to ensure i have sufficient sources of income to sustain the mortgage.
2) in the event i can't, i'll rightsize back to a condo. In all likelihood, be able to pay that off fully utilising all the profits.
3) 10k might sound like alot in interest, but i do need a place to stay and help me grow my assets. what's my alternative? well i could rent a smaller place and purchase a place for investment and rent out.
then nobody will be watching this video😂
we also need to consider the interest as a proportion to asset size and income.
Have you factored in your opportunity cost on your 1.5mil cash downpayment plus mortgage interest plus property tax? How does that compare to renting?
@TheRightMoveSG "then nobody will be watching this video"... means you glossed over facts for views?
i'm not well verse enough in investments to yield sufficient returns on my 1.5m cash that will allow me to rent a similar property. assuming a 12k rental, that'll require a 12% ROI p.a. , just to cover the cost of renting.
and we've been burnt in investments before. so there's trauma there as well hahah.
so we figured that it'll be better to put the money into something that i spend all my time studying.
hopefully it'll turn out well!
i was referring to my earlier comment " 10k might sound like alot in interest, but i do need a place to stay and help me grow my assets. what's my alternative? well i could rent a smaller place and purchase a place for investment and rent out."
i do think i put alot more facts and figures into my videos as compared to others.
But nowhere near perfect. will try harder!
A few questions:
1. Your calculations did not factor in property tax
2. Your calculations did not factor in interest payment either
3. The sale of parc esta definitely cannot afford to tear down and rebuild a landed property. Just the rebuild will cost 2 million at least.
thank you for the questions!
if you're pointing out about the property tax and interest on the landed. i'll put that into the next video.
for my first 2 properties, they were both rented out, so the tenants kinda paid for those expenses. i didnt factor rental income into the calculations to balance those off.
on the rebuild, i'll be taking a construction loan. Which again, i'll be explaining in the next video.
Dont forget to subscribe so you dont miss it 😊
@@TheRightMoveSG then you also need to factor income tax on your rental income too 😊
yup! part of the expenses that i've mentioned. hence, leaving out the rental income altogether
Hi Alvin,
Thanks for sharing your experience and takeaways :)
Just curious, did you do any estate planning (e.g., writing a will) for your family?
most welcome!
i must admit, that is 1 thing ive been procrastinating about hahah.
But we're well covered on the liabilities should anything happen to either of us.
QE you mentioned as a driving force in the past and i agree. But we are QT now. You conveniently omitted it.
Good you made profits , i did as well. But instead of increasing my exposure at market highs i cash out. Market doesnt always go up. Recent transactions will show we are in overpriced territory. Your landed can hold value but might not appreciate the rate you want it to . Expext stagnation for next 5 yrs.
congratulations on the profits!
Don't think im planning to flip the landed hahah so i'm good for a longer than 5yrs hold.
What about the cost of loaning? I.e. Interest cost. That eats into your "profits" significantly and was not mentioned. As well as property tax of your current property and the opportunity cost of sinking 1.3m cash into downpayment.
yup! that's where part 2 of the video comes in.
what's it really like to live in a landed (cost)
subscribe so u dont miss it😅
Is it too late to buy Lake Grande now?
if for own stay/school, i dont think so, its a good quality development in an area (around 1km of Rulang especially) with quite limited supply.
for investment, then it really depend on what's your budget and what are the alternatives available
@@TheRightMoveSG own stay 😀👍
Congrats bro. U did well. 👍
Thank you 🙌
Love how numbers driven you are and factual you are haha. But wish you had gone more into the loan and ability to loan millions though.
thank you!
no magic to the ability to loan though, subject to TDSR just like everyone else. A function of age and income :)
is your loan really 3.9m? since you mentioned your downpayment is 1.3m
@@TheRightMoveSG so you guys didn't need to show funds or do anything like pay yourself and CPF OA, SA, Medisave? you had to do 30% haircut?
yup😱
yes we need to take the haircut. thankfully the stress test rates came down so we could qualify
On rich people not selling and hoarding supply due to absd? Not true. Every 2 days a new gcb or bungalow for sale. Why? 1.Quantum. you can make better money else where and not many can buy 10m bungalows. 2. Property tax killing the rich. 32-36% property tax. Cost to hold these assets have gone up by so much. Not just interest rates but taxes... and opportunity cost from cash and profits stuck there
thank you for sharing! that's a really fair point😊
happy to learn too, i dont profess to know everything!
still working my way up to the GCB market hahah
🎉🎉🎉
Probably you are a high income group to be able to loan nearly $4million.
we do work very hard😅
Everyone work hard, not everyone gets the same pay 😂
Open mouth ask papa mama to help out lo. What's so difficult. Say until like that...😂
yeah lo, thats why people say i very longwinded 😅