View Full Version : No fat returns from investment properties
This is why you should not expect fat returns from investment properties
Another drawback of MAS cooling measures.
According to Nomura, on 5 October, the MAS announced the latest round of cooling measures for the housing market, imposing a cap on mortgage loan tenures at 35 years as well as a lower LTV for mortgage tenures exceeding 30 years or extending beyond the age of 65 years.
Here's more from Nomura:
Nomura property analyst Sai Min Chow has noted that the measures are imposed on first-time home-buyers for the first time and he detects a slightly more hawkish tone from the MAS statement: “we will do what it takes to cool the market”.
According to the MAS, “more than 45% of new residential property loans granted by financial institutions have tenures exceeding 30 years”.
Our property analyst notes that unless home buyers have ample equity capital, he estimates that mortgage repayment could now be 24-45% higher than before, which theoretically should have some impact on housing demand.
The most likely outcome, in his view, is a month or two of lower transaction volumes before activity starts to pick up again. He, therefore, thinks that the government may have to implement new curbs if the property market remains buoyant.
Our concern is that additional measures may be the straw that breaks the camel’s back. To the extent that the measures implemented in the past have had limited effect, especially on transaction volumes, the property market will likely be vulnerable to yet more measures if the new curbs do not work.
What is worrying, in our view, is the increase in investment demand from Singaporeans who still believe that they can get a reasonable return on their investment properties when completed.
With vacancies on the rise and rentals declining, we see risk that many “investors” may have difficulty securing adequate cash flow to service their debt. Sooner or later, we believe that the fundamentals of increasing supply, a sluggish economy and prices at an all-time high will inevitably put pressure on prices, with a concomitant impact on sentiment.
Observers continue to point to the low unemployment numbers as a key determinant underpinning sentiment. Should unemployment start to rise as a result of weakening global economic conditions or Singapore’s economic restructuring, the property market may become vulnerable to a sharp pullback.
This would have negative wealth effects on the economy in addition to affecting corporate earnings
Well said. Rental has indeed softening. Most projects that are sold are under construction, so are not completed or ready for rental as yet till 2014 onwards.
What will happen then ? Massive vacant condos units with no rental to help defray mortgage repayment ? :scared-4:
Well said. Rental has indeed softening. Most projects that are sold are under construction, so are not completed or ready for rental as yet till 2014 onwards.
What will happen then ? Massive vacant condos units with no rental to help defray mortgage repayment ? :scared-4:
Do you own an investment property??? If no, you may not know how it works.
Do you own an investment property??? If no, you may not know how it works.
How does it work?:p
Do you own an investment property??? If no, you may not know how it works.
Well say, if you don't have taste, how can you know what taste good or bad.
Well said. Rental has indeed softening. Most projects that are sold are under construction, so are not completed or ready for rental as yet till 2014 onwards.
What will happen then ? Massive vacant condos units with no rental to help defray mortgage repayment ? :scared-4:
China have a lot of vacant condos, do their price drop?
How does it work?:pmany ways, if desperate, can do daily or weekly rate for room instead of the whole apartment. if got holding power, then hold it lor.
China have a lot of vacant condos, do their price drop?
china properties are mainly brought by rich businessman, very rich. can afford to buy a street of shophouse.
sgp properties brought by a lot of average joes, I'm also a joe.
cannot compare.
china properties are mainly brought by rich businessman, very rich. can afford to buy a street of shophouse.
sgp properties brought by a lot of average joes, I'm also a joe.
cannot compare.
Me below average, $44,000 a year salary.
china properties are mainly brought by rich businessman, very rich. can afford to buy a street of shophouse.
sgp properties brought by a lot of average joes, I'm also a joe.
cannot compare.
Agree, cannot compare with those apartments bought by the rich businessman with holding power & like to leave apartments empty.
I am sharing my concern on local market. The high end rental is lethargic.
Will mass market be next come 2014 onwards or thereabout when supply streaming in ?
The loan officer I know said he wouldn't be able to afford to buy if CM6 came few months back. His loan tenure was 48 yrs.
Do you own an investment property??? If no, you may not know how it works.
From what I understand, rental income is the means to finance the mortgage repayment. Unless there are other means I am not aware of ? :ashamed1:
From what I understand, rental income is the means to finance the mortgage repayment. Unless there are other means I am not aware of ? :ashamed1:
Do you really want to learn? If yes, then I pose you some question and we can begin. What is the property price. What is the loan quantum? What is the tenure you have? What is the current rental? What is the cheapest rental to get a tenant in (you undercut the competition)? What is your CPF amount you can use every month?
If you take the trouble to input all the answers, I will take the trouble to answer you. If not, let's assume we never corresponded.
Cheers ;)
Do you really want to learn? If yes, then I pose you some question and we can begin. What is the property price. What is the loan quantum? What is the tenure you have? What is the current rental? What is the cheapest rental to get a tenant in (you undercut the competition)? What is your CPF amount you can use every month?
If you take the trouble to input all the answers, I will take the trouble to answer you. If not, let's assume we never corresponded.
Cheers ;)i can join in to learn??
i can join in to learn??
Of course, if you input the figure, I can share with you something. But please hor, I am not god. I will do my best, thats all. You need to decide from there. I will not in anyway tell anyone to buy or sell. I will only share and discuss. You have a right to agree or disagree and come to your own conclusion. OK?
This are my terms.
Me below average, $44,000 a year salary.
you are a lucky joe, but i cant say if others as lucky as u.
Do you really want to learn? If yes, then I pose you some question and we can begin. What is the property price. What is the loan quantum? What is the tenure you have? What is the current rental? What is the cheapest rental to get a tenant in (you undercut the competition)? What is your CPF amount you can use every month?
If you take the trouble to input all the answers, I will take the trouble to answer you. If not, let's assume we never corresponded.
Cheers ;)
Thank you Chestnut. I think I got a good picture from the questions you posed for me :)
Thank you Chestnut. I think I got a good picture from the questions you posed for me :)
Please huh, make sure u have a job if not make sure u have buffer in cpf to pay monthly in the event you lose your job. Then at least you still go money to spend from rental when u are out of job.
ask Focus to input all these into his spreadsheet
Please huh, make sure u have a job if not make sure u have buffer in cpf to pay monthly in the event you lose your job. Then at least you still go money to spend from rental when u are out of job.
I think I know Rlin from somewhere.
Let's just say that the properties she invests in belong to the higher end type that not many Singaporeans are able to touch.
She does not really need to work, at least not for the money.
And I would wager that she has more experience in property investing than you have, Chestnut.
ask Focus to input all these into his spreadsheet
Bro/sis, I will never ask someone to do something if he/she does not ask me a question. Scully they think I bossy. Hahaha.
Many people know something but actually they only know "something". They actually dont know that the something only makes up 10% of the entire equation.
I taught my direct reports this so they can have financial freedom in the future. My believe is, if they can have money, they wont worry and then they can concentrate on the job and do a great job. So I have a very interesting philosophy and ideas very different from many people.
I think I know Rlin from somewhere.
Let's just say that the properties she invests in belong to the higher end type that not many Singaporeans are able to touch.
She does not really need to work, at least not for the money.
And I would wager that she has more experience in property investing than you have, Chestnut.
Honestly, it doesnt matter to me. If she is richer then me, I am happy. I did not hurt nor deceive anyone. If she is playing with me, so be it. But some other forummers hopefully can learn, right. Dont take it so personally la. Life is already tough for many, why make it worst. And what makes you think that I cannot touch those higher end that you mentioned??? Hahaha, Dont underestimate me.... just because of my name/nick - chestnut. Hahahaha
Background: 1bedrm MM, 3xxsqft, CCR:
What is the property price? 750000
What is the loan quantum? 450000
What is the tenure you have? 35yrs
What is the current rental? $2800pm
What is the cheapest rental to get a tenant in (you undercut the competition)? $2000 (i am willing to go to this low)
What is your CPF amount you can use every month? $0
Do you really want to learn? If yes, then I pose you some question and we can begin. What is the property price. What is the loan quantum? What is the tenure you have? What is the current rental? What is the cheapest rental to get a tenant in (you undercut the competition)? What is your CPF amount you can use every month?
If you take the trouble to input all the answers, I will take the trouble to answer you. If not, let's assume we never corresponded.
Cheers ;)
Background: 1bedrm MM, 3xxsqft, CCR:
What is the property price? 750000
What is the loan quantum? 450000
What is the tenure you have? 35yrs
What is the current rental? $2800pm
What is the cheapest rental to get a tenant in (you undercut the competition)? $2000 (i am willing to go to this low)
What is your CPF amount you can use every month? $0
OK
at 1.5% loan, your repayment is 1.4K. Interest rate will stay low for 2years at least. So you dont need to worry about paying extra cash right??? If rental softens. But I really dont know where people get the idea it is softening?? Mine is going up.
If you are working or a stash of CPF, you can use your CPF to pay mortgage during no job situation. But I really dont understand about the 0 CPF part unless you are a foreigner or you are not working. So this, please dont tell me. I hope I answered your question.
OK
at 1.5% loan, your repayment is 1.4K. Interest rate will stay low for 2years at least. So you dont need to worry about paying extra cash right??? If rental softens. But I really dont know where people get the idea it is softening?? Mine is going up.
If you are working or a stash of CPF, you can use your CPF to pay mortgage during no job situation. But I really dont understand about the 0 CPF part unless you are a foreigner or you are not working. So this, please dont tell me. I hope I answered your question.Oh, CPF is currently servicing 1st residential property. since didnt meet the CPF minimum sum, so cannot use cpf to service 2nd property.
you mean the rental for your unit is going up?
how do you justify rental increase to your tenants? my current lease is up for renewal soon and i am just thinking about increasing rent.
This may sound silly but i look at my nearby condos - not a full condo with full facility and their 2 bedders are going for 1K more than my 3 bedder in another full condo. but my neighbours in my condo development are renting their places out at about the same rate as mine.
OK
at 1.5% loan, your repayment is 1.4K. Interest rate will stay low for 2years at least. So you dont need to worry about paying extra cash right??? If rental softens. But I really dont know where people get the idea it is softening?? Mine is going up.
If you are working or a stash of CPF, you can use your CPF to pay mortgage during no job situation. But I really dont understand about the 0 CPF part unless you are a foreigner or you are not working. So this, please dont tell me. I hope I answered your question.
Oh, CPF is currently servicing 1st residential property. since didnt meet the CPF minimum sum, so cannot use cpf to service 2nd property.
Oh, then wifey/hubby leh??? Now the question is only your risk appetite and your prediction of the market. Thats all I can share. The last is, do due diligence. Work out the worst case if you lose your job, how long you can weather.
you mean the rental for your unit is going up?
how do you justify rental increase to your tenants? my current lease is up for renewal soon and i am just thinking about increasing rent.
This may sound silly but i look at my nearby condos - not a full condo with full facility and their 2 bedders are going for 1K more than my 3 bedder in another full condo. but my neighbours in my condo development are renting their places out at about the same rate as mine.
If the rental in your development did not drop and they are renting out at the same price as you, cant you ask for say $100-200 more?? If they move to another location, they need to pack, get movers (inconvenience) - what does this translate to in $. Get your agent to do the talking lah. Thats what I do. But if you cannot afford to lose this tenant, then you bo pian lo. You dont try, you never know. Good luck.
Honestly, it doesnt matter to me. If she is richer then me, I am happy. I did not hurt nor deceive anyone. If she is playing with me, so be it. But some other forummers hopefully can learn, right. Dont take it so personally la. Life is already tough for many, why make it worst. And what makes you think that I cannot touch those higher end that you mentioned??? Hahaha, Dont underestimate me.... just because of my name/nick - chestnut. Hahahaha
Like your spirit Chestnut. Wealth does not define who we are. The questions posed by you is indeed helpful for me to know what is the mortgage scene like for a younger set of buyers. Thanks for your generous sharing.
Cheers
Like your spirit Chestnut. Wealth does not define who we are. The questions posed by you is indeed helpful for me to know what is the mortgage scene like for a younger set of buyers. Thanks for your generous sharing.
Cheers
Like your spirit too. Oh, by the way, I am not so young. Hahaha.:cheers1:
Oh, then wifey/hubby leh??? Now the question is only your risk appetite and your prediction of the market. Thats all I can share. The last is, do due diligence. Work out the worst case if you lose your job, how long you can weather.lol, cannot predict lah. i guess just invest in wat i can lah. household income $180k, total outstanding mortgage loan $1.4m (3 PC), $200k emergency cash. healthy or not healthy?
lol, cannot predict lah. i guess just invest in wat i can lah. household income $180k, total outstanding mortgage loan $1.4m (3 PC), $200k emergency cash. healthy or not healthy?
Bro, it is the security of the job that is important for your kind of pay. If you are confident of having your job, you can sleep peacefully at nite.
Another thing, please do not post so freely all your personal details. It is indeed scary.
Wa lau, the new generation really CAN. Bro, 180K and 3 PC I take my hats off to you. You are the man. You have gone in and now you know how the game works. Well done. The 2nd unit was tough but the 3rd was a lot easier right !!!! I am sure your emergency cash is from rental income accumulation. Your status now is super solid. As for your fourth, this is the tough 1. You need to ask yourself why you are buying. For speculation, for fear of losing out or what??? Only if you know why you are going in, then you will find the answer. But u definitely did well with your household income.
Lastly, do your homework. You need knowledge then conviction will come in. If not you will be always shaking when something happens.
Bro, it is the security of the job that is important for your kind of pay. If you are confident of having your job, you can sleep peacefully at nite.
Another thing, please do not post so freely all your personal details. It is indeed scary.
Wa lau, the new generation really CAN. Bro, 180K and 3 PC I take my hats off to you. You are the man. You have gone in and now you know how the game works. Well done. The 2nd unit was tough but the 3rd was a lot easier right !!!! I am sure your emergency cash is from rental income accumulation. Your status now is super solid. As for your fourth, this is the tough 1. You need to ask yourself why you are buying. For speculation, for fear of losing out or what??? Only if you know why you are going in, then you will find the answer. But u definitely did well with your household income.
Lastly, do your homework. You need knowledge then conviction will come in. If not you will be always shaking when something happens.thanks sinseh chestnut...provided people believe the numbers stated here. :tongue3:
felicia_sg
19-10-12, 18:12
"Lucky"? You see him "no up"? :p
I rather say he is smart :cool:
There may be many smart ones around for all you know. :D
you are a lucky joe, but i cant say if others as lucky as u.
Originally Posted by Arcachon
Me below average, $44,000 a year salary.
lol, cannot predict lah. i guess just invest in wat i can lah. household income $180k, total outstanding mortgage loan $1.4m (3 PC), $200k emergency cash. healthy or not healthy?
Household income $180k only, you want to play property game????
In the OCR mass market and CCR small condo market you are playing poker with people whose combined income ranges from $500k to $1.5m.
The buyer profile of this market: both spouses are doctors, lawyers, private bankers, senior bank executives, management consultants, etc.
They can outbid and outplay you.
If you think you can outlast and outwit these people, good luck to you.
That's what happened in the freehold landed market. These past couple of years, it was bidded up by this group of Singaporeans.
$180k.... Hahaha.... My toes are laughing.... You better come back to earth, my friend. Don't lose it and crash hard.
auroraborealis
19-10-12, 18:32
yess same here... the rate rental gg up is so aggressive...
like from 2800-3000 range within 2 yrs shot up to 3400-3600 range; i also dun understand why everybody so worried abt rental... in the worst case, fall back to the old range loh
OK
at 1.5% loan, your repayment is 1.4K. Interest rate will stay low for 2years at least. So you dont need to worry about paying extra cash right??? If rental softens. But I really dont know where people get the idea it is softening?? Mine is going up.
If you are working or a stash of CPF, you can use your CPF to pay mortgage during no job situation. But I really dont understand about the 0 CPF part unless you are a foreigner or you are not working. So this, please dont tell me. I hope I answered your question.
Household income $180k only, you want to play property game????
In the OCR mass market and CCR small condo market you are playing poker with people whose combined income ranges from $500k to $1.5m.
The buyer profile of this market: both spouses are doctors, lawyers, private bankers, senior bank executives, management consultants, etc.
They can outbid and outplay you.
If you think you can outlast and outwit these people, good luck to you.
That's what happened in the freehold landed market. These past couple of years, it was bidded up by this group of Singaporeans.
$180k.... Hahaha.... My toes are laughing.... You better come back to earth, my friend. Don't lose it and crash hard.
Hmmm how they outbid outplay ah? I bought already mah, i not competing the same units with them leh.
Also mine is iron rice bowl, are those of bank exexutives iron rice bowl too? Dont know leh. Also, one of the 3PC is fully paid.
yess same here... the rate rental gg up is so aggressive...
like from 2800-3000 range within 2 yrs shot up to 3400-3600 range; i also dun understand why everybody so worried abt rental... in the worst case, fall back to the old range loh
yup singapore rental mkt very strong my sis from australia just signed 2 year rental contract for 2 bedder apt 1000sq ft at mt sophia area for $4k pm...:o...but corporate lease so ok i guess
i follow her see a few apts looks like for ccr apts NO problem finding tenants if ur asking is reasonable...but a lot of those newer ones asking 6 to 7k i dunno who rents:o
http://www.bloomberg.com/news/2012-10-19/southeast-asia-seen-leading-rate-increases-next-year-economy.html
how will this impact us? what do you think?
http://www.bloomberg.com/news/2012-10-19/southeast-asia-seen-leading-rate-increases-next-year-economy.html
how will this impact us? what do you think?
Aiyah. The article so long but only talk abt other ASEAN countries. SG won't be affected one.
MAS uses exchange rate and not interest rate to fight inflation. It will keep the SGD strong and that will attract more money from overseas to park in our property here.
Continue to buy property without fear. Remember, a wise mickey mouse once said: Property meant to be bought and not sold, meant to be passed down to the next generation. (but don't look at Japan hor)
buttercarp
19-10-12, 20:50
https://pbs.twimg.com/media/A5khUd6CAAAKL3U.jpg:large
Passed by this Siglap house (39 East Coast Dr) and it is for rental.
Called the agent said $7.5k per month for 2 years !
Isn't it expensive?
That is really a good deal. City fringe already secured rental of between 4.8 - 5k. Owner could have paid up the house and just need some pocket money.
yup singapore rental mkt very strong my sis from australia just signed 2 year rental contract for 2 bedder apt 1000sq ft at mt sophia area for $4k pm...:o...but corporate lease so ok i guess
i follow her see a few apts looks like for ccr apts NO problem finding tenants if ur asking is reasonable...but a lot of those newer ones asking 6 to 7k i dunno who rents:o
Me below average, $44,000 a year salary.
Havent add your rentals. Should be at least $100k p.a.
buttercarp
19-10-12, 22:06
Havent add your rentals. Should be at least $100k p.a.
This was his post in the I love my Bank. thread.
http://forums.condosingapore.com/newreply.php?do=newreply&p=317069
I almost fall off my chair when I read my banker reply.
I was looking at a 1 Bedroom Sky green for my retirement home.
There was also a Shophouse selling for 750k, valuation 800k.
Just celebrated my 12th birthday.
Own 5 Room HDB val at 595k, 2 Bedroom val at 1.5m, 3 Bedroom PH at 1,305,800. Outstanding loan at 1.8m.
Salary 44k a year, rental income 78k, cola 4k a month, housing 200 euro.
BMW 5 series 4k euro, SMART car 4k euro.
Son going NS.
Wife stay at home watch series everyday.
auroraborealis
19-10-12, 22:23
Exactly... Since we use strong SGD to fight inflation, SOR rates can only stay low if SGD remains strong
Aiyah. The article so long but only talk abt other ASEAN countries. SG won't be affected one.
MAS uses exchange rate and not interest rate to fight inflation. It will keep the SGD strong and that will attract more money from overseas to park in our property here.
Continue to buy property without fear. Remember, a wise mickey mouse once said: Property meant to be bought and not sold, meant to be passed down to the next generation. (but don't look at Japan hor)
That is really a good deal. City fringe already secured rental of between 4.8 - 5k. Owner could have paid up the house and just need some pocket money.
yup i also guessed as much so faster grabbed and secured 2 year lease..:)
Thanks but I am trying to ask for $1000 more so that rental in my condo is on par with the new condo beside mine. If it's $100-200 more, I think the agent can justify to the tenant - normal year on year inflation is more than that.
but thanks anyway.
If the rental in your development did not drop and they are renting out at the same price as you, cant you ask for say $100-200 more?? If they move to another location, they need to pack, get movers (inconvenience) - what does this translate to in $. Get your agent to do the talking lah. Thats what I do. But if you cannot afford to lose this tenant, then you bo pian lo. You dont try, you never know. Good luck.
Thanks but I am trying to ask for $1000 more so that rental in my condo is on par with the new condo beside mine. If it's $100-200 more, I think the agent can justify to the tenant - normal year on year inflation is more than that.
but thanks anyway.
Sis, no way your old condo rental can be same price with new condo leh. You must benchmark with your own condo. If you up 1K to same price as new condo, your tenant has a choice to shift to another unit in your condo.
Say right now your condo rental 3.5K ave in your estate.
New condo is 4.5K.
You up to 4.5K, cant they rent a unit in your existing condo at 3.5K? Must compare apple with apple/ Orange with orange.
Please benchmark within your estate. Your tenant is not so stupid you know.
i know bro, that's why i don't get rental dynamics. my condo is big development with full facilities and only 2 years since TOP (it's very new and looks new as well) and this new condo is one block with only gym and pool. and my condo and this new condo are very close to each other...
i am just trying to understand more about rental dynamics that's all.
Sis, no way your old condo rental can be same price with new condo leh. You must benchmark with your own condo. If you up 1K to same price as new condo, your tenant has a choice to shift to another unit in your condo.
Say right now your condo rental 3.5K ave in your estate.
New condo is 4.5K.
You up to 4.5K, cant they rent a unit in your existing condo at 3.5K? Must compare apple with apple/ Orange with orange.
Please benchmark within your estate. Your tenant is not so stupid you know.
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