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Thread: Should I Sell My HDB?

  1. #31
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    Jul 2008
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    Quote Originally Posted by 3C View Post
    I am staying in a Private Condo and rented out my HDB exec(fully paid up).
    I am using my HDB rental to finance my PC mortgage Loan
    for the past 5 years. Seem a good deal initially but rental has been dropping and
    hardly able to cover my monthly loan payment (shortfall of few hundreds $).
    My HDB which I bought resale has reached 25 years (left 74 years)and I am
    retiring in a couple of years time.

    Agent has advised me to sell off my HDB as he feels that HDB value will not go up as in
    the past and the value in fact will drop as it gets older.

    I am thinking to sell it off to pay off my PC loan or invest in a smaller PC.

    Any suggestion from you guys? Thanks
    Questions for you, with my thoughts appended

    1) do you intend to live in the PC over the long term (>5 years, or perhaps post retirement)?

    - if you don’t, and intend to scale down your lifestyle, good to maintain the current HDB if you and your spouse are open to moving back to the current HDB. Rationale being the HDB was purchased under the previous ruling, hence you can continue to flexibly hang on to your existing PC, or even buy more PCs, while keeping costs manageable with your HDB (self-stay)

    2) do you intend to leave a legacy for your kids by passing on property(ies) to them?

    - if not, sell the HDB and reinvest the funds in lower risk instruments, that are fairly liquid and can be used to repay your PC should interest rates rise. Will not suggest buying another PC at this point, given your age and retirement timeline. ABSD will also soak up a hefty portion of your retirement savings.

    - if yes, keep the HDB. This creates the additional property for source of investment income, and allow you to eventually downsize your lifestyle while keeping the PC.

    Having said all that, if it were me, I will still sell the HDB. I know this is a very contrarian view compared to what the rest of the forumers have expressed. My thoughts as follow :

    1) the HDB is poorly located, and rental will only be more difficult with lower yields as the flat ages. PropertyGuru is flooded with tonnes of flats >40 years, looking for buyers, and some of these have been stealthily dropping their asking prices over the past six months with no avail (case in point, my JC classmate’s 120sqm 5-room flat at Bt Merah has been advertising for $5XXk for the past 6 months, with no takers). Rental is competitive. There will come a point, where you cannot sell nor rent your flat, and have no choice but to live in it yourself.

    2) You are relying on the HDB rental to cover the PC’s instalment. That in itself is a dangerous assumption, given you are looking at retirement in a few years. I am not sure how much savings/investments you have, but it is now timely to revisit some of these core assumptions, and see if they still hold water.

    Good luck!

  2. #32
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    May 2012
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    Your cash flow situation is already very healthy. Even without HDB rental, your disposable income is more than sufficient to cover mortgage. Many heartlanders would aspire to be in your enviable position but sometime being born at the right time allows one to capitalize on the opportunities given.

    If rental income is taken with current HDB pricing, the yield should be around 4-5%. It should be going down further based on current oversupply situation. If sell HDB & get PC, the rental yield would be even lower but the upside potential is still there. Prices for older HDB should probably decline with the lease (refer to Minister’s statement).

    Doing nothing will keep all your original investment plans in place with very little risk except those policy affecting HDB. (Rental max 6 tenants etc).morover, you have not paid any ABSD so no hurry unlike some who had to sell to get back the refund.

    Sell HDB and be really patient for the next move. This will be what I will do if in your situation.

    =============••••••••============••
    Financial details:
    1. PC left 40% loan. rental from HDB is sufficient to cover the cash component of the monthly installment (in addition to spouse's CPF). But rental lease is going to expire soon.
    2. Both myself and spouse are working - monthly take home about 20k+ (Age: 40-45)
    3. Cash (in deposits) ~ 500k (excluding stocks)
    4. No car loan (COE valid for 9 more years)
    5. Two kids in Pri school

    Which option would you advise::
    1. If you are in my shoe, would you consider selling the HDB, and use the proceeds to look for another investment grade PC?
    2. Or would you keep the HDB, look for a small PC and pay the ABSD?
    3. Do nothing. Continue to let the HDB lease run down and hope rental continue to roll in.
    4. Any other better options?[/QUOTE]

  3. #33
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    May 2018
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    I am more inclined towards selling my HDB as well though still hoping to get new tenancy. At current mkt rate and rental, the yield is good at >6%, but not worthy to cover the ABSD if I decide to buy another small PC while getting the HDB. Or you guys would think otherwise?

    Curious about your note on "be really patient"? Do you think the current price uptrend will take a retreat in the near future? 300k from the HDB isn't a lot of money, and it would vaporize in no time if there is no next move.



    Quote Originally Posted by Reisor View Post
    Your cash flow situation is already very healthy. Even without HDB rental, your disposable income is more than sufficient to cover mortgage. Many heartlanders would aspire to be in your enviable position but sometime being born at the right time allows one to capitalize on the opportunities given.

    If rental income is taken with current HDB pricing, the yield should be around 4-5%. It should be going down further based on current oversupply situation. If sell HDB & get PC, the rental yield would be even lower but the upside potential is still there. Prices for older HDB should probably decline with the lease (refer to Minister’s statement).

    Doing nothing will keep all your original investment plans in place with very little risk except those policy affecting HDB. (Rental max 6 tenants etc).morover, you have not paid any ABSD so no hurry unlike some who had to sell to get back the refund.

    Sell HDB and be really patient for the next move. This will be what I will do if in your situation.

    =============••••••••============••
    Financial details:
    1. PC left 40% loan. rental from HDB is sufficient to cover the cash component of the monthly installment (in addition to spouse's CPF). But rental lease is going to expire soon.
    2. Both myself and spouse are working - monthly take home about 20k+ (Age: 40-45)
    3. Cash (in deposits) ~ 500k (excluding stocks)
    4. No car loan (COE valid for 9 more years)
    5. Two kids in Pri school

    Which option would you advise::
    1. If you are in my shoe, would you consider selling the HDB, and use the proceeds to look for another investment grade PC?
    2. Or would you keep the HDB, look for a small PC and pay the ABSD?
    3. Do nothing. Continue to let the HDB lease run down and hope rental continue to roll in.
    4. Any other better options?
    [/QUOTE]

  4. #34
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    May 2012
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    If I were in the same shoes, personally I would keep.

    Who is to say one day you won't require the huge space again? Some older gen HDBs are so huge that you can create spaces to house people (relatives). A study room can be carved out of kitchen. A bedroom can be carved out of living room.

    At the end, if misfortune strikes, one minimally still needs a place to stay. This is beyond the price gains analysis, it is buying insurance.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  5. #35
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    Oct 2012
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    Y worry about being leasehold hdb? The hillford condo only 55yrs leasehold 1 bedder also can sell in the market. Those industrial land with 30yrs lease also can sell. Imagine if u ask what happen if private owners are allow to buy old hdb? I think old hdb will be snapped up.

  6. #36
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    May 2012
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    Quote Originally Posted by star View Post
    Y worry about being leasehold hdb? ....... Imagine if u ask what happen if private owners are allow to buy old hdb? I think old hdb will be snapped up.
    It that happens, then it is a real U-turn in policy.

  7. #37
    Join Date
    May 2010
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    Very good inputs by you guys. Thanks.

    I calculated I bought my HDB exec at $470K(ignoring the interest I paid as I paid up rather fast)
    If I could get average rental of $2300, I actually
    can get back my capital payout in 17 years.
    Already past 5 years. 12 more years to go.
    After that any amount is actually extra income for the next 62 years.
    No matter how bad the condition, I don't think rental will drop below $1k

    If going by this line, I would think it may not be a bad idea to keep it.

  8. #38
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    Quote Originally Posted by 3C View Post
    Very good inputs by you guys. Thanks.

    I calculated I bought my HDB exec at $470K(ignoring the interest I paid as I paid up rather fast)
    If I could get average rental of $2300, I actually
    can get back my capital payout in 17 years.
    Already past 5 years. 12 more years to go.
    After that any amount is actually extra income for the next 62 years.
    No matter how bad the condition, I don't think rental will drop below $1k

    If going by this line, I would think it may not be a bad idea to keep it.
    HDB exec flats are highly livable. Love the huge spaces.
    Good that u have decided!

  9. #39
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    Quote Originally Posted by stalker88 View Post
    I am more inclined towards selling my HDB as well though still hoping to get new tenancy. At current mkt rate and rental, the yield is good at >6%, but not worthy to cover the ABSD if I decide to buy another small PC while getting the HDB. Or you guys would think otherwise?

    Curious about your note on "be really patient"? Do you think the current price uptrend will take a retreat in the near future? 300k from the HDB isn't a lot of money, and it would vaporize in no time if there is no next move.


    The yield is decent, and I agree that you have a fair bit of cash, and you certainly are in an enviable position. Why not status quo?

    Actually I have lived in a HDB all my life, and will continue to live in one no matter the number of PCs I have. In fact, one of my neighbours always park his Ferrari in the carpark.

    Good place to raise kids, huge bedrooms, and town council does a good job in terms of upkeep. Disposal of bulky items, just call town council. Conservancy charges are low. For those who bought under previous ruling (which allows for purchase of PCs and overseas properties after MOP), once sold you can never get back the same flexibility and terms.

  10. #40
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    Quote Originally Posted by stalker88 View Post
    I am more inclined towards selling my HDB as well though still hoping to get new tenancy. At current mkt rate and rental, the yield is good at >6%, but not worthy to cover the ABSD if I decide to buy another small PC while getting the HDB. Or you guys would think otherwise?

    Curious about your note on "be really patient"? Do you think the current price uptrend will take a retreat in the near future? 300k from the HDB isn't a lot of money, and it would vaporize in no time if there is no next move.
    [/QUOTE]

    Perhaps just like to ask these questions to assist in the decision making process.

    Is 6% yield based on current market price or price you bought years ago?
    Be really patient? 300k may not be a lot but definitely gives you liquidity to be more decisive when you want to make your next move when opportunity arises.

    Nothing wrong with keeping the status quo if it is already your long term plan.

  11. #41
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    Jun 2018
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    Quote Originally Posted by star View Post
    Bad idea to sell off. Hdb has the highest rental yield. No need pay maintenace fee, no high property tax, govt will have home improvement program like change pipes, upgrading toilets, painting whole flat at subsidised cost. In fact 74yrs old lease left shows that your flat is still young. Maybe when left with 65yrs then u decide. Just my opinion. Now every month u only top up a few hundred dollars for your condo payment is not much. Let's say if u sold off your hdb what u do with the money? Leave in bank very low interest and money will disappear fast. If buy 1 bedder condo u need to pay maintenace fee n higher property tax.
    Hi, just read this post. Why do you recommend 65 years of lease left then decide if need to sell? Appreciate the advise.

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