Property Investment

[chestnut]

Property investment - If I buy a 1 million property today

Let's look at a hypo senario... Assuming a person buys a 1 million property today with rental at say 3.5K. Loan @ 60%

So downpayment is 400K
Loan is 600K @ 1.5% 30 years
End of 30 years, total paid up is 746K
Gross rental after 30 years - 1,260K
Monthly rental = S$2,070
Please do your own deduction on maintenance, property tax etc....

So if interest is @ 3%
Loan is 600K @3% 30 years
End of 30 years, total paid = 910K
Gross rental after 30 years = 1,260K
Monthly rental = S$2,539

So if interest is @ 5%
Loan is 600K @5% 30 years
End of 30 years, total paid = 1,159K
Gross rental after 30 years = 1,260K
Monthly rental = S$3,220

question now, is it worth it to invest???? So technically, if you invest earlier, you can have a longer loan tenure.... You also take advantage of time value of money....

I am using 40% as downpayment as this is the situation today.... If you think your job is unstable, or if you are fearful, or you think prices will drop and you want to take advantage of it, please do so by all means.... No one size fits all.... I am not encouraging neither am I discouraging.... I am just stating what I found out about life !!!!! There are people who could not service the loans during bad times.... and were forced to sell.... So when would be a good time to buy.... Only you yourself know.... Please do your own calculations and enter only if you are comfortable and can sleep at nite.... If not, it will be a stressful situation and not advisable to enter if you are fearful....

Will prices drop or will it go up, use the above calculation and predict in 10 years, 20 years or even 30 years time..... I have done all the investing in properties and this is just my little contribution to all of you....

Some of you can do a spreadsheet and do a hypo scenario on your own.... To see how deep a pain you can sustain.... No investment is a guaranteed...

And lastly, if you think 3.5 k is too high or too low, input your own figures... hahahahahahaha

Cheers

[hopeful]

need to change definition of monthly rental in the 3 scenarios.
eg Monthly rental = S$2,070
people might think it is free cash flow.

[chestnut]

need to change definition of monthly rental in the 3 scenarios.
eg Monthly rental = S$2,070
people might think it is free cash flow.

Bro, if they think it is free cash, I personally think they better not enter into this investment. hahahahahaha

[Allthepies]

Change to minimum rental to cover loan payment?

[chestnut]

Change to minimum rental to cover loan payment?

Bro, if rental cannot cover mortgage.... the question is will this person come out on top after 30 years???? With the 40% downpayment, the question is what is the likelihood of rental not covering mortgage even at 5%???? That's why i painted a few scenarios.. Hahahahaha

With the 40% downpayment, the dynamics has changed quite a fair bit....

Those who bot say a 1 mil property 3 yrs ago, with say 20% downpayment, would have had their mortagage amount reduced from 800K to about 700K. Somemore with kopi money from the rental. hahahahahahaha...

Of course the best is to have rental more than cover mortgage rite.... and with extra kopi money (excess)....

So those with 40% downpayment, would they have major issue???? That's the question moving forward with this new paradigm shift.... Food for thought.

[DC33_2008]

It is really early movers' advantage in Singapore's property market in the last couple of years.

[lajia]

one key question remains whether can you rent out your unit if there is an over supply? If no matter what you can still rent out, then it is obvious that this investment confirm jalan...

have any giru here face this over supply issue during bad time?

[chestnut]

It is really early movers' advantage in Singapore's property market in the last couple of years.

Bro, agree... but I feel there is still room.... Let me share my other view.... If you dont invest in properties and you have saved say 1 mil... What would the individual do to get constant income to support their retirement??? This is a question that has been pondering me for the past few years.... Would the individual be skilled to managed other investment opportunities to get say 4k per month to support their retirement plan???? What would this investment vehicle be???

[chestnut]

one key question remains whether can you rent out your unit if there is an over supply? If no matter what you can still rent out, then it is obvious that this investment confirm jalan...

have any giru here face this over supply issue during bad time?

I rented out my anchorage at 2K during bad time.... The key is can you survive this period... If you dont do properties, you would have put into other vehicles like stocks... During the bad times, your stocks would also have halved... your dividents may not even kick in??? And you may be required to buy rights issues by the companies as well... So every investments has risk... Hahahahahaha.... Of course if you are champion in other investments, play to your strength.... Hahahahaha

[chestnut]

Here's my take on the future (I may be wrong)... But I really do see many parents buying properties for passive income and ultimately passing on to the kids... This is the new paradigm shift... I do know many of my friends with multiple units and a few have used this as a model.... The future generation of kids who have parents who bought houses will be at an "advantage" - say what you want.... Just like tuition in the past.... Then overseas educations... now properties... Is it rite??? It all boils down to the value given to the kid... Hahahahaha

Are kids with rich parents at a disadvantage??? To each his own... Diff strokes for diff people....

[DC33_2008]

It is about the choosing a safer vehicle for a portion of the portfolio. Those who did not leverage before found themselves stuck. Lots of people have this dilemma: Got money but not enough to invest. Got money but think it is too high and risky now.

Bro, agree... but I feel there is still room.... Let me share my other view.... If you dont invest in properties and you have saved say 1 mil... What would the individual do to get constant income to support their retirement??? This is a question that has been pondering me for the past few years.... Would the individual be skilled to managed other investment opportunities to get say 4k per month to support their retirement plan???? What would this investment vehicle be???

[chestnut]

It is about the choosing a safer vehicle for a portion of the portfolio. Those who did not leverage before found themselves stuck. Lots of people have this dilemma: Got money but not enough to invest. Got money but think it is too high and risky now.

Bro agree.... The pain is in the ABSD. Hahahahahaha buy 1 mil, kana 70k extra to folk out which will take about 2 yrs rental... Very pain.... Saying all that, bloody showrooms are crazy man !!!!

No perfect answers.... Only time will tell....

The market is still so flushed with liquidity....

[Arcachon]

Property investment - If I buy a 1 million property today

Let's look at a hypo senario... Assuming a person buys a 1 million property today with rental at say 3.5K. Loan @ 60%......

Cheers

[lionhill]

Bro, agree... but I feel there is still room.... Let me share my other view.... If you dont invest in properties and you have saved say 1 mil... What would the individual do to get constant income to support their retirement??? This is a question that has been pondering me for the past few years.... Would the individual be skilled to managed other investment opportunities to get say 4k per month to support their retirement plan???? What would this investment vehicle be???

Agree. That's way I bought recently even though there is ABSD and the price is high.

If not locking it, I am afraid I will lose most of my cash in the stock market in the next round of recession.

For properties, I am sure even if I have bought high, twenty years later, it will worth more than today.

[cavaliver]

Thank you for sharing, chestnut

[chestnut]

I was lucky to have met someone when I was in my twenties who shared with me this few pointers :

1. Go ahead and buy.... Take advantage of the tenure...
2. Remember : Time Value of Money.... Your money only reduces with time
3. Do you think your salary will not increase... Can all of you compare your salary 10 years ago with today.... Or even compare 5 years ago with today???
4. Land is limited here....

I have absolutely nothing to gain here.... I am here just sharing what I have learnt.... REMEMBER - DO IT TO YOUR COMFORT LEVEL... Do not give yourself undue stress if you think you cannot manage it or you think your job is unstable or you think your salary will not increase.... You need to know yourself well....

Property is not for everyone... But it will do well if you know how to wield it...

This is purely a sharing exercise.... Wish you all well in your pursuit of happiness and financial freedom.... But remember this - treasure those around you !!!!! Family is everything....

[radha08]

moving forward my inspiration and motivation is to buy my 3rd property a 1 bedder that is strategically located..maybe in 2 to 3 years time my dream might materialize but as what bro chestnut said i tried so many other forms of investment only one i ever made money from is property maybe others got better luck than me in shares..unit trusts..bonds...casino ..so to each his own

[indomie]

Soon people will prefer renting over buying. Buying will be viewed as too much commitments and creating lost of opportunities.

[chiaberry]

moving forward my inspiration and motivation is to buy my 3rd property a 1 bedder that is strategically located..maybe in 2 to 3 years time my dream might materialize but as what bro chestnut said i tried so many other forms of investment only one i ever made money from is property maybe others got better luck than me in shares..unit trusts..bonds...casino ..so to each his own

How not to make money in equities/unit trusts? Global markets are at or near 5-year highs.

[Lovelle]

Bro agree.... The pain is in the ABSD. Hahahahahaha buy 1 mil, kana 70k extra to folk out which will take about 2 yrs rental... Very pain.... Saying all that, bloody showrooms are crazy man !!!!

No perfect answers.... Only time will tell....

The market is still so flushed with liquidity....

why not buy mm where ABSD is about 1 year rental or slightly less..

[zzz1]

Here's my take on the future (I may be wrong)... But I really do see many parents buying properties for passive income and ultimately passing on to the kids... This is the new paradigm shift... I do know many of my friends with multiple units and a few have used this as a model.... The future generation of kids who have parents who bought houses will be at an "advantage" - say what you want.... Just like tuition in the past.... Then overseas educations... now properties... Is it rite??? It all boils down to the value given to the kid... Hahahahaha

Are kids with rich parents at a disadvantage??? To each his own... Diff strokes for diff people....

yeap..bro..agreed with you.

I bought in the context of generating passive income while working as a casual worker (former company engage me time to time on project basis), when i called it the day few years back...i must say that i am very lucky in term of timing...

but during the time of purchases, i do have the thought of fighting inflation and seeing property appreciated, was thinking how would my children afford when their time to buy ppt when they wanted to upgrade ( currently all happliy living in HDB )

i told them that they have to make them make their own mark, the ppt are for generating passive income and me and my wife i expenditures... but deep in me, eventually i will pass to them....

some may thing that it spoil the kid, but is diff stoke for deff ppl as you mentioned

[HANROSE]

I was lucky to have met someone when I was in my twenties who shared with me this few pointers :

1. Go ahead and buy.... Take advantage of the tenure...
2. Remember : Time Value of Money.... Your money only reduces with time
3. Do you think your salary will not increase... Can all of you compare your salary 10 years ago with today.... Or even compare 5 years ago with today???
4. Land is limited here....

I have absolutely nothing to gain here.... I am here just sharing what I have learnt.... REMEMBER - DO IT TO YOUR COMFORT LEVEL... Do not give yourself undue stress if you think you cannot manage it or you think your job is unstable or you think your salary will not increase.... You need to know yourself well....

Property is not for everyone... But it will do well if you know how to wield it...

This is purely a sharing exercise.... Wish you all well in your pursuit of happiness and financial freedom.... But remember this - treasure those around you !!!!! Family is everything....

Bro Chestnut, really lucky of you to meet such a person in your twenties.
I only understood it in my mid-thirties and only after paying 'tuition money' in the other form of investments.
Thanks for sharing....

[radha08]

How not to make money in equities/unit trusts? Global markets are at or near 5-year highs.

i am talking about my experience playing shares over the past 20 years
buy high sell low

[chiaberry]

i am talking about my experience playing shares over the past 20 years
buy high sell low

Ouch! We all have paid tuition fees along the way.

If you buy blue chip STI stocks, then generally you can hang on to them through the down turns unless you are in dire need of cash. Somewhat like property. And when the market goes down a lot and you have spare cash, you can buy in slowly a bit at a time. Because you won't know when it reaches the bottom.

If you buy penny stocks then sorry, you have to be in and out quickly or get caught with your pants down when the syndicates have moved ahead of you.

[3C]

I intend to rent my properties as long as I could for passive income.
However on 2nd thought - is it possible to be able to
get tenants for 20 to 30 years. By then the house
already look like old hen. Tenants will prefer new
development by then right? Maybe only Blangah will
rent at half the price..

As I am new, anybody here can share their experiences?

[chestnut]

I intend to rent my properties as long as I could for passive income.
However on 2nd thought - is it possible to be able to
get tenants for 20 to 30 years. By then the house
already look like old hen. Tenants will prefer new
development by then right? Maybe only Blangah will
rent at half the price..

As I am new, anybody here can share their experiences?

Check this out

http://www.propertyguru.com.sg/proje...ens-107/rent/1

[3C]

Check this out

http://www.propertyguru.com.sg/proje...ens-107/rent/1

Oh yeah..Mandarin Garden - very nice development.

This is one of the few old developments which I feel even better than many new developments, spacious , good view and nice landscape.

[radha08]

Ouch! We all have paid tuition fees along the way.

If you buy blue chip STI stocks, then generally you can hang on to them through the down turns unless you are in dire need of cash. Somewhat like property. And when the market goes down a lot and you have spare cash, you can buy in slowly a bit at a time. Because you won't know when it reaches the bottom.

If you buy penny stocks then sorry, you have to be in and out quickly or get caught with your pants down when the syndicates have moved ahead of you.

yup i know but easier said than done for me at least i tend to be my biggest enemy and always sabotage myself ah well thats life but then in
the property game i was a bit more focussed and timing was rightmaybe just luck so i decided maybe i not meant to play shares or those other financial instruments just invest in brick n mortar

[radha08]

Check this out

http://www.propertyguru.com.sg/proje...ens-107/rent/1

nice view sure can rent at the RIGHT $$$ but then again mandarin gardens is a GOLD MINE waiting to burst once eastern region MRT comes up

[flxcat]

nice view sure can rent at the RIGHT $$$ but then again mandarin gardens is a GOLD MINE waiting to burst once eastern region MRT comes up

Thanks Chestnut for sharing.

Believe it all boils down the price the property is purchased, location, amenities, and also whether the MC do a good job in keeping the condo surrounding and facilities in good condition, and mindful to maintain or enhance the value of the condo.

I visited Caribbean, even though is very old already, but the whole compound is still very well maintain and my friend even mentioned the MC had added a function room and build a bigger gym to keep the value of the condo. Well I have to admit that the maintenance fees is a killer too.