View Full Version : Buying properties in your child’s name (part I)
http://propertysoul.com/2012/11/15/buying-properties-in-your-childs-name-part-i/
Buying properties in your child's name (part I)
November 15, 2012
With soaring property prices and unceasing cooling measures, more buyers are considering buying their second or third property under their children’s names.
Here are some of the reasons:
1) Buy for the next generation just in case they can’t afford one in the future.
2) Buy it under a child who hasn’t bought any property to avoid paying ABSD (Additional Buyer Stamp Duty).
3) Ask a child under 30 to buy the property and apply for a 30 or 35-year loan, for higher loan-to-value ratio, longer tenure and lower monthly repayment.
Hey, that’s nothing new. I started using my baby girl’s name to borrow when she was barely a week old!
Being a nerdy bookworm, the number of books I can borrow from libraries is never enough. So when I find out that there’s no age limit to apply for library membership, I immediately know how to ‘work around it’.
One afternoon while my one-week-old baby was sleeping and my confinement lady was busy, I sneaked out of the house and headed straight to the nearest library.
With my baby’s birth certificate and my IC, the application was instantly approved. In less than 5 minutes, I got a welcome pack and a new membership card.
I couldn’t wait to borrow six books right away using the new card. Hurray! I could now borrow a total of 14 books – six more than the original eight from my premium membership card!
It didn’t take long for me to realize that it’s difficult to cope with both a newborn and the new books I borrowed. Twenty-one days passed like a split-second and I was soon behind the return date.
At the end, I had to settle the sum of late payment (for my baby). I also found out from the librarian that all fines are capped at $25. Exceeding that, your borrowing account will be automatically suspended from the system – until you come in person to ‘clear the debt’.
Fortunately, I have returned the books and paid the fine. Otherwise, my poor girl will be banned from the library system even before she learns ABC!
The morale of this story: If you want to buy any property under your children, do them a favor and pay it in full!
Alternatively, make sure that you or the younger generation have no problem paying the mortgage to avoid repossession by the bank in the future. You don’t want to leave a permanent mark in the credit history of your kids.
Above all, buy with a ‘safety margin’ to avoid the property becoming a negative equity (outstanding loan higher than property value) when the market prices continues to go south. You don’t want to see your children coughing up money to top up the difference (between the outstanding loan and property’s current value) while being pressed by the bank.
Remember the Japanese who bought properties during the property bubble in the 1980s with a multi-generation mortgage of 100 years. After two lost decades (and still counting), their second and third generations are still repaying those home loans borrowed by their grandfather!
VIP - glad to see u on this forum again, and thanks once again for your wonderful sharings.
Not all who wish to share have the knowledge to share, and not all who have the knowledge are willing to share. I am glad you have the knowledge and is willing to share.
me will build a business that can let my future generation to take over..
:D:D
Remember the Japanese who bought properties during the property bubble in the 1980s with a multi-generation mortgage of 100 years. After two lost decades (and still counting), their second and third generations are still repaying those home loans borrowed by their grandfather!
Understand in japan, for those who inheirited the property with the multi-generation loan, they just consider themselves tenants, every month just set aside that sum of money for the monthly installment, as there is no way to finish paying in thier lifetime / generation.
quite sad and we are definitely moving in that direction. :scared-3:
Understand in japan, for those who inheirited the property with the multi-generation loan, they just consider themselves tenants, every month just set aside that sum of money for the monthly installment, as there is no way to finish paying in thier lifetime / generation.
quite sad and we are definitely moving in that direction. :scared-3:
wah kao..never know this happen in japan..
is sg really moving to that direction?
payment for hdb loan instalments also like paying rental... u r a lessee at best. never a true owner.
Allthepies
15-11-12, 18:28
buy within ur means and u can probably pay off in 20years or less. where got pay multi-generations?
VIP - glad to see u on this forum again, and thanks once again for your wonderful sharings.
Not all who wish to share have the knowledge to share, and not all who have the knowledge are willing to share. I am glad you have the knowledge and is willing to share.
You are most welcome.
The best way to learn is by sharing. The more you share, the more you learn.
It is all about when you buy and how much you pay for.
In the 1980s, the Japanese had this "prices will only be going higher and higher" mentality. That's why people paid ridiculous prices for their housing and banks were willing to offer incredibly long mortgage loans.
It's only after the bubble burst that people came to their senses. Japanese banks have tightened their granting of loans for properties now.
payment for hdb loan instalments also like paying rental... u r a lessee at best. never a true owner.
Agree.
The government determines how you can buy, when you can rent out, when to upgrade, when you can sell, who you can sell to, etc.
It's obvious who's the real owner here.
payment for hdb loan instalments also like paying rental... u r a lessee at best. never a true owner.
very enlightening..
:cool:
very enlightening..
:cool:
Roly8, I missed out something here. :confused: :confused: :confused:
Can u enlighten me on this portion.... I cannot get it. Since u are enlighten, I believe u got it. Please she'd some light to me. I am serious. Not joking hor.
Roly8, I missed out something here. :confused: :confused: :confused:
Can u enlighten me on this portion.... I cannot get it. Since u are enlighten, I believe u got it. Please she'd some light to me. I am serious. Not joking hor.
I believed what roly8 meant was the the HBD will always be the true owner of you flat, even when you've finished paying off the instalments. Still binded by their rules and regulations, cannot do this cannot do that can rent out etc etc.
Our government has tighten the loan duration, the anount of deposit needed is quite high. So are we heading Japan direction?
Roly8, I missed out something here. :confused: :confused: :confused:
Can u enlighten me on this portion.... I cannot get it. Since u are enlighten, I believe u got it. Please she'd some light to me. I am serious. Not joking hor.
whatever property you got still owned by govt at the end of the day..
just depend whether govt want to take it back or not... :o
I believed what roly8 meant was the the HBD will always be the true owner of you flat, even when you've finished paying off the instalments. Still binded by their rules and regulations, cannot do this cannot do that can rent out etc etc.
But if u pay up, u can sell the house... Say hdb cost 300k. U pay down 60k. Monthly installment over 30 yrs = $800 per month(too lazy to calculate-so throw a figure). After 30 years, assume flat drop to 200k. U sell, u still get 200k rite.
Now, if u rent, it will be higher, rite. About 1.5k(I use super low figure). U rent for 30 years = 540k.
Say u rent a room at $600. After 30 years, u paid - 216k.
U are at the mercy of the landlord. He raise price, u have to move out.
After 30 years, who is in a better position? Even if the prices drop.
That's why I am confused.
What if prices go up? If u rent the flat for 30 years. U have helped the owner of the hdb pay for his house, rite?
:confused: :confused:
whatever property you got still owned by govt at the end of the day..
just depend whether govt want to take it back or not... :o
What gov take, govt give back more. SER
http://www.hdb.gov.sg/fi10/fi10329p.nsf/w/eSERSBenefits?OpenDocument
Never, ever rent.... U will live to regret it. U are just throwing money away. There is just no logic!!!! Only do it if u are posted overseas- u don't know how long u will be there and rental is the only way out.
But please take my statement w a pinch of salt if u disagree. Each of u have a rite to disagree.
:cheers5:
What gov take, govt give back more. SER
http://www.hdb.gov.sg/fi10/fi10329p.nsf/w/eSERSBenefits?OpenDocument
Never, ever rent.... U will live to regret it. U are just throwing money away. There is just no logic!!!! Only do it if u are posted overseas- u don't know how long u will be there and rental is the only way out.
But please take my statement w a pinch of salt if u disagree. Each of u have a rite to disagree.
:cheers5:
I disagree. If never ever rent, then who's gonna rent our properties? :D :D
I disagree. If never ever rent, then who's gonna rent our properties? :D :D
Hahaha.. Good one....:D :D :D
Ok, let me correct :
Please rent.... Make my day - like what dirty harry always say.
Our government has tighten the loan duration, the anount of deposit needed is quite high. So are we heading Japan direction?
Bro, google and u will find lah
http://en.wikipedia.org/wiki/Japanese_asset_price_bubble
Japan's prices at its peak was US$20k per sq ft. Compare with their salary(their salary high ok) starting pay for engineer a few years ago was about 5k us, if I can remember.
http://www.realestate.co.jp/rej/forsale/view/123597/2K-Mansion-in-Suginami-ku-Tokyo/lang/en
http://www.realestate.co.jp/
Please do your research and determine for yourself. Help yourself by googling...
Once u read moe, u have a better understanding of the lost decade.
:cheers4:
Bro, do u consider 1997 to 2006 a lost decade for Singapore property as well?:confused: :confused:
Hahaha.. Good one....:D :D :D
Ok, let me correct :
Please rent.... Make my day - like what dirty harry always say.
lol!!! :D:D:D
wah kao..never know this happen in japan..
is sg really moving to that direction?
Not only SG, HK & parts of china all moving in that direction, thats why all the CMs which will hopefully prevent or at least slow down from reaching there :confused: :confused:
I am away for holiday and did not have the mood to write on this serious topic.
I am waiting for Part 2, part 3 ....
VIP.....pl complete your story and then I share what are my friends doing....
with the latest CM, we gonna see more and more investors buying with their children's name!
It works just like the buyers of the 1.5-1.7 million dollars ECs. How could a newly wed couple with <12k household income be able to support these kind of purchase without their parents' help?
buttercarp
18-11-12, 18:52
Hi vip, I just got home and read this thread.
From your previous other posts, I gather you are a young mother.
But you have so much wisdom.
I am impressed!
Yes, I agree with you that if we buy for our next generation, we should be prepared to pay for them, rather than burden them with a hefty loan.
That's why in my case, I would rather my kids apply for HDB as their first home.
Of course, I will aim to own another 2 more properties, but under my name, and may transfer to them later when they can afford to take over the mortgage.
Of course, I will aim to own another 2 more properties, but under my name, and may transfer to them later when they can afford to take over the mortgage.
transfer will need to pay stamp duty
buttercarp
19-11-12, 08:14
transfer will need to pay stamp duty
Oh ya, overlooked that:o .
Then let them inherit it.
Inheritance no need hefty stamp duty, right?
http://www.iras.gov.sg/irasHome/page04.aspx?id=8784
But if u pay up, u can sell the house... Say hdb cost 300k. U pay down 60k. Monthly installment over 30 yrs = $800 per month(too lazy to calculate-so throw a figure). After 30 years, assume flat drop to 200k. U sell, u still get 200k rite.
Now, if u rent, it will be higher, rite. About 1.5k(I use super low figure). U rent for 30 years = 540k.
Say u rent a room at $600. After 30 years, u paid - 216k.
U are at the mercy of the landlord. He raise price, u have to move out.
After 30 years, who is in a better position? Even if the prices drop.
That's why I am confused.
What if prices go up? If u rent the flat for 30 years. U have helped the owner of the hdb pay for his house, rite?
:confused: :confused:
I would suggest moderator to delete your post..
If my long term tenant see your post.. he will give me a termination letter soon..
and may give me an offer to buy over my place.. which I have no plan to sell.. :D
I would suggest moderator to delete your post..
If my tenant see your post.. he will give me a termination letter soon..
and may give me an offer to buy over my place.. which I have no plan to sell.. :D
Hahaha.... My tenant offered to buy my unit so many times during the tenure... Hahaha.... I already posted in 1 of the thread...
Please rent... Make my day...
Wa lau, I share, share kana hamtam by u... Damn pain leh... Hahahaha:gun2:
I would suggest moderator to delete your post..
If my long term tenant see your post.. he will give me a termination letter soon..
and may give me an offer to buy over my place.. which I have no plan to sell.. :D
your tenant is probably foreign talent... definitely smart enough to know this simple calculation...
:o
your tenant is probably foreign talent... definitely smart enough to know this simple calculation...
:o
Yes! My so-called smart long term tenant.. that even with lots of knowledge, facts & figure, charts and so on.. & lots of "copy & paste"...... in the end oso lan lan be my tenant.. :D
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.