posting on behalf of a friend who wasn't able to register an account here. Please provide your valuable 2 cents to him. Thank you.
Hi,
My wife and I have been pondering over this for quite some time, and we have not reached a conclusion. So I will like to seek some advice here.
My wife and I are both in our forties and we have a teenage kid. We live in a 5rm flat in Sengkang that has some 100k+ outstanding loan remaining. We opted not to pay off the loan as we always have a plan to purchase a private property as an investment.
Eventually, our intention is to have 2 properties, one for collecting rent.
Option 1 - Buy EC now
There are a lot of ECs in Sengkang and Punggol. With the current prices, the ECs are very attractive option as the psf gap with private condos is widening. It is still possible to buy ECs at 600+~700+ psf around my area. My wife works part time and our combined pay is still within 12k threshold. So buying an EC has a very high chance of making a good profit in the future. We should be able to fully pay off the EC w/o taking any loan.
EC concern 1: We will be tied for the next 8 years as assuming 3 years needed to built the new EC and 5 years MOP. Within this period, I can only have one property. By then my kid would have completed her uni studies and working already and I will be in my fifties. I plan to semi-retire around this age.
EC concern 2: We are 2nd timers so our chances of getting an EC are very slim. Are we allowed to walk-in purchase the leftover units or returned units?
EC concern 3: there are many ECs in Sengkang/Punggol so we must be prepared to live in it ourselves if we purchase one as we will have to compete with fellow ECs and HDB'ers for rentals.
EC concern 4: 8 years is a very long time so we are not sure if we are able to afford a 2nd private property then. Especially when we are actually planning to semi-retire by then.
EC concern 5: If we sell the EC 8 years later and purchase a resale flat, we will be tied for another 5 years of MOP.
Option 2 - stick to HDB for now
Our HDB is one LRT station away from the MRT and some 600~700m from the future hospital in Sengkang. So we're thinking that it may increase our chances of renting out our flat.
Some of my foreign colleagues who used to stay in condos have downgraded to HDB. So with property prices still soaring, HDB rentals should still be attractive.
Currently, we can only afford a private property in the range of 800k due to the new 40% loan policy from govt. If we save up these 2~3 years we should be able to easily afford one that is ~1m. We just need a 2 bedder as our family is small. We can either continue to live in our flat and rent out the private property or vice versa.
Eventually, we prefer to live in a smaller unit as we are getting older and we do not have a maid to do the housework.
Condo concern 1: prices may runaway beyond our reach within next few years.
So if you were in our shoes will you try to get an EC now? It is a low risk investment because of its low psf now and we have a high chance of taking some decent profit in 8 years. However, it will be hard for us for own a 2nd property to collect passive income which is part of our retirement plan.
If you have better ideas we will really appreciate if you could share.
Thank you very much!