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Thread: Should I sell my D9 FH property if I can nett a million profit.

  1. #1
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    Default Should I sell my D9 FH property if I can nett a million profit.

    Hi all,

    I have just one property in my name and that’s a D9 FH PC I bought recently.
    Transacted psf in my condo has gone up some 30% lately. I know I’m getting ahead of the situation but hypothetically speaking, if it reaches a point where I can make a million from disposing it, should I?

    - PC currently rented but yield is not good
    - Bought this apt when we had no kid. Shortly after firstborn came along.
    - We’ve never moved in for various reasons - outsized being one of factors - so we rented out.
    - Bought the place because we like the vicinity (lifestyle) - close to Robertson

    When I purchased this place, the intention was to hold for long (even considered the possibility of passing to kid if I have one though at that point we were DINK). Like all buyers, I did try to avoid buy high. Not so much as to hope to profit from it in future but rather to minimise the risk of losing money in case emergency strikes and I need to sell. The recent run up in prices got me thinking this could be THE chance for me to make money if opportunity presents itself.

    My “concerns” are:
    - if I sell now I don’t foresee myself having another chance of owning another D9 FH property anymore as I’ll be priced out (I really fancy owning a D9 property)
    - I don’t know what to do with the proceeds (I don’t invest), and I don’t think I’ll buy any property in the short term due to current high prices. Chances are I’ll be “investing” in some very safe products with a yield of maybe 2% , which can’t beat inflation.
    - a much longer timeframe down the road, my place gets enbloc and I lose the opportunity to pocket even more because I didn’t hold out long enough (hahaha, I can dream....)



    Like to hear all opinions!

    Thanks for reading this long post.

  2. #2
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    When buying ask why are you buying, for rental yield, capital appreciation or inflation hedge.

    When selling ask yourself what can you do with the profit or money on hand.

    You should get your answer by asking the 2 question first.

  3. #3
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    Agree.

    You put that 1M in your bank, you lose 3% a year. You don't sell, you earn 3% a year with the risk of fluctuation.

    You decide if that risk is worth 6% (3+3) a year. And in the longer run, do you think the risk of price fluctuation affects you?

    6% a year = 100% in 12 years in compounding terms



    Quote Originally Posted by Arcachon View Post
    When buying ask why are you buying, for rental yield, capital appreciation or inflation hedge.

    When selling ask yourself what can you do with the profit or money on hand.

    You should get your answer by asking the 2 question first.

  4. #4
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    Quote Originally Posted by thomastansb View Post
    Agree.

    You put that 1M in your bank, you lose 3% a year. You don't sell, you earn 3% a year with the risk of fluctuation.

    You decide if that risk is worth 6% (3+3) a year. And in the longer run, do you think the risk of price fluctuation affects you?

    6% a year = 100% in 12 years in compounding terms
    Wow , Time Value of Money playing here.

  5. #5
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    Quote Originally Posted by shue7 View Post
    Hi all,

    I have just one property in my name and that’s a D9 FH PC I bought recently.
    Transacted psf in my condo has gone up some 30% lately. I know I’m getting ahead of the situation but hypothetically speaking, if it reaches a point where I can make a million from disposing it, should I?

    - PC currently rented but yield is not good
    - Bought this apt when we had no kid. Shortly after firstborn came along.
    - We’ve never moved in for various reasons - outsized being one of factors - so we rented out.
    - Bought the place because we like the vicinity (lifestyle) - close to Robertson

    When I purchased this place, the intention was to hold for long (even considered the possibility of passing to kid if I have one though at that point we were DINK). Like all buyers, I did try to avoid buy high. Not so much as to hope to profit from it in future but rather to minimise the risk of losing money in case emergency strikes and I need to sell. The recent run up in prices got me thinking this could be THE chance for me to make money if opportunity presents itself.

    My “concerns” are:
    - if I sell now I don’t foresee myself having another chance of owning another D9 FH property anymore as I’ll be priced out (I really fancy owning a D9 property)
    - I don’t know what to do with the proceeds (I don’t invest), and I don’t think I’ll buy any property in the short term due to current high prices. Chances are I’ll be “investing” in some very safe products with a yield of maybe 2% , which can’t beat inflation.
    - a much longer timeframe down the road, my place gets enbloc and I lose the opportunity to pocket even more because I didn’t hold out long enough (hahaha, I can dream....)



    Like to hear all opinions!

    Thanks for reading this long post.
    Don't sell. YOu gave the reasons yourself. Over time, you will regret offloading it. As you said, you have no urgent need for funds.

  6. #6
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    Quote Originally Posted by tonymontana View Post
    Don't sell. YOu gave the reasons yourself. Over time, you will regret offloading it. As you said, you have no urgent need for funds.
    But sometime hand itchy. :b

  7. #7
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    Looking ahead, do you need that sum of money somewhere in the mid term. There is opportunity cost for everything that you do. I rather you ask what is your holding balance in your bank now which you can weather any sort of downturn now that your kid is in the equation. If you have a 'safe buffer' (amount subjective due to your lifestyle), then I think the answer is clearer.

  8. #8
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    This is what a 1mil profit can buy. For reference.

    https://www.straitstimes.com/singapo...for-queenstown
    The three laws of Kelonguni:

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

  9. #9
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    If you are very rich and this property is meant for your children, than keep it.

    If you are rich, and want to be richer, and believe that a major price correction is in the waiting (for economic reasons or whatever your research suggested), than sell and invest your profits in bonds etc. You can re-enter the market and maybe with the profits you can buy two instead of still holding to this single unit.

    However, if you believe that prices can only go up in the long term (like all property agents are advocating) and willing to forgo mid term price correction, and miss the opportunity to add more, than do not sell.

    If you are not so rich and hoping to be rich, you may need to take some calculated risk here. You either end up holding to this single unit for the next 20 years or you can add more by taking some risk.

  10. #10
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    Never buy Low sell High because you will never buy because you will be waiting for the next low.

    Same with sell High buy Low because you will be waiting for the next high.

    Buy when you can with all the reserve for bad time, sell when you need to sell and not when you want to sell.

    Remind yourself how many 10 years do you have and you should be safe.

  11. #11
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    When you want to buy a property or a new car, you need to decide for yourself if it is the right time to buy. You can ask the property agent or the car salesperson anything about the property or car but never ask them is it the right time to buy. You will always get the same 'convincing' answer from them because they need to sell to pay for their own bills and to keep their jobs.

  12. #12
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    Sell only if offers above valuation gao gao.
    True story, valuation 4mio. Someone sold to china buyer 5mio.

  13. #13
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    Hold till enbloc next time.

  14. #14
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    Quote Originally Posted by jwong71 View Post
    Sell only if offers above valuation gao gao.
    True story, valuation 4mio. Someone sold to china buyer 5mio.
    got lobang bo? i also want to valuation 4m sell to china buyer at 5m leh.

  15. #15
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    Quote Originally Posted by bargain hunter View Post
    got lobang bo? i also want to valuation 4m sell to china buyer at 5m leh.
    Bo lobang. You can try on their chinese group singapore website

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    how many years of reserve for bad time? 3 years to cover mortgage?

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    Quote Originally Posted by sginvestor View Post
    how many years of reserve for bad time? 3 years to cover mortgage?
    6 month

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    Quote Originally Posted by sginvestor View Post
    how many years of reserve for bad time? 3 years to cover mortgage?
    If you are below 40 and marketable, 6 months sound reasonable. However, if you are above 40, even if you are marketable, be prepared for 3 years if you expect to get a job to match your last drawn pay. Be prepared to even settle for less than half of what you used to draw to be employable. This is the new norm.

  19. #19
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    I just sold my D9 FH. Close to 60% gains, ignoring all the rental income which I pocketed and paid down the loan over the years.

    As with all investments, there is an entry point, and also an exit point. Listen to yourself and do your own math.

    Having said that, since you bought recently (not sure how recent), you should be subject to SSD upon sale. Assuming you paid ABSD, all the stamp duties, legal fees and agent fees will eat into a substantial chunk of your profit. Hence, I am not sure if that 30% gain number is realistic. Again, do your own math.

    Money is always fungible, and there are many investment classes. Since you probably are young, can have a longer term investment horizon, calibrated by your risk appetite.

    Perhaps you should ask yourself - do you see yourself buying another investment property with the proceeds? Is having a D9 investment property a constant objective? Is this current property rentable in the next 5-10 years horizon? That should inform you on the opportunity costs of holding, versus the potential upside from reinvesting in other investment classes or properties.

  20. #20
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    Quote Originally Posted by new2mondrian View Post
    I just sold my D9 FH. Close to 60% gains, ignoring all the rental income which I pocketed and paid down the loan over the years.

    As with all investments, there is an entry point, and also an exit point. Listen to yourself and do your own math.

    Having said that, since you bought recently (not sure how recent), you should be subject to SSD upon sale. Assuming you paid ABSD, all the stamp duties, legal fees and agent fees will eat into a substantial chunk of your profit. Hence, I am not sure if that 30% gain number is realistic. Again, do your own math.

    Money is always fungible, and there are many investment classes. Since you probably are young, can have a longer term investment horizon, calibrated by your risk appetite.

    Perhaps you should ask yourself - do you see yourself buying another investment property with the proceeds? Is having a D9 investment property a constant objective? Is this current property rentable in the next 5-10 years horizon? That should inform you on the opportunity costs of holding, versus the potential upside from reinvesting in other investment classes or properties.
    Very sound advice. For sure, you are not a property agent but a sound investor who understands the mechanics of investment.

  21. #21
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    Quote Originally Posted by Amber Woods View Post
    If you are below 40 and marketable, 6 months sound reasonable. However, if you are above 40, even if you are marketable, be prepared for 3 years if you expect to get a job to match your last drawn pay. Be prepared to even settle for less than half of what you used to draw to be employable. This is the new norm.
    6 month more than suffices. The new reality is at least can be Grab driver. 2-3K close one eye work half day 5 days a week also can meet.

    Need more work more hours.

    Job security is not really an issue.
    The three laws of Kelonguni:

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

  22. #22
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    What I meant was 6 month would suffice for one to sell a D9 FH property.
    The three laws of Kelonguni:

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

  23. #23
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    Quote Originally Posted by Kelonguni View Post
    6 month more than suffices. The new reality is at least can be Grab driver. 2-3K close one eye work half day 5 days a week also can meet.

    Need more work more hours.

    Job security is not really an issue.
    For the average worker earning less than 5K a month, this option (Grab driver or delivery for Q10 or Lazada) is workable. However, for most professionals earning 5 to 10k a month, they are the one who will need 3 years of mortgage saving to save their homes.

  24. #24
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    Quote Originally Posted by Amber Woods View Post
    For the average worker earning less than 5K a month, this option (Grab driver or delivery for Q10 or Lazada) is workable. However, for most professionals earning 5 to 10k a month, they are the one who will need 3 years of mortgage saving to save their homes.
    Check my previous message. Why can't they sell in 6 months but must reserve 3 years of mortgage to pay for something that they (now) cannot afford?

    The deposit required for any D9 FH property and the amount of mortgage paid is already enough to fully settle to pay for a resale HDB anytime they need to downgrade.

    And this guy is already sitting on $1 million profit on top of the amounts mentioned.
    The three laws of Kelonguni:

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

  25. #25
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    Quote Originally Posted by Kelonguni View Post
    Check my previous message. Why can't they sell in 6 months but must reserve 3 years of mortgage to pay for something that they (now) cannot afford?

    The deposit required for any D9 FH property and the amount of mortgage paid is already enough to fully settle to pay for a resale HDB anytime they need to downgrade.

    And this guy is already sitting on $1 million profit on top of the amounts mentioned.
    The person who asked this question is not the person sitting on $1m profit. Their needs are different.

  26. #26
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    Quote Originally Posted by Amber Woods View Post
    The person who asked this question is not the person sitting on $1m profit. Their needs are different.
    There is no such profile as someone who must keep a property they can’t afford for three years waiting for their matching job to come along.

    No financial advisor will advise three years of mortgage on standby. It’s ultra ultra safe, but way beyond what most require.

    For me, 3 months cash for mortgage plus 1 year of CPF OA for mortgage is more than sufficient.

    Or perhaps you can share what profile requires 3 years’ mortgage on standby and why? Thanks.
    The three laws of Kelonguni:

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

  27. #27
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    Quote Originally Posted by Kelonguni View Post
    There is no such profile as someone who must keep a property they can’t afford for three years waiting for their matching job to come along.

    No financial advisor will advise three years of mortgage on standby. It’s ultra ultra safe, but way beyond what most require.

    For me, 3 months cash for mortgage plus 1 year of CPF OA for mortgage is more than sufficient.

    Or perhaps you can share what profile requires 3 years’ mortgage on standby and why? Thanks.
    That was a hypothetical question posted by someone asking how long does it takes to hold on to a property in bad times.

  28. #28
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    Quote Originally Posted by Amber Woods View Post
    That was a hypothetical question posted by someone asking how long does it takes to hold on to a property in bad times.
    If cannot hold or need money, it's better to sell and move on.

    But just to note that we have just gone through those 4 years of simulated "bad" times.

    Those who commit in the last few years are likely to have quite a bit of buffer to sell or to hold.
    The three laws of Kelonguni:

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

  29. #29
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    Quote Originally Posted by Kelonguni View Post
    If cannot hold or need money, it's better to sell and move on.

    But just to note that we have just gone through those 4 years of simulated "bad" times.

    Those who commit in the last few years are likely to have quite a bit of buffer to sell or to hold.
    The last 4 years were neither good nor bad times. Weak holders who bought at high at CCC (including Sentosa) in 2007 had already sold their holdings. For those who bought at the peak in 2013 for OCR and RCR, the last 4 years have been testing times but not worrying times since there is neither recession nor crisis affecting the market except the cooling measures still in tact.

    The next 4 years shall be interesting with buyers and sellers taking different positions. Some are taking the opportunity to take profits now while the market is still hot while some are buying now not wanting to miss the boat despite all the cooling measures still in tact.

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