Sell or Rent?

[Vizkid]

Dear all Gurus who may want to comment ;

I will be moving to a pvt property which was bought in 2007 for 600K, paid 20% and loan 80%. My current flat is a 5 room HDB valued at 400K with 170K left to service. The rental is avg 2K per month if I were to rent out. The combine income is 10K/mth and will have no issue servicing 2 properties with the rental.

Is it better to rent out or sell my current flat for a profit of abt 120K? Or rent out and wait for capital appreciation? All inputs welcome.

[proud owner]

Dear all Gurus who may want to comment ;

I will be moving to a pvt property which was bought in 2007 for 600K, paid 20% and loan 80%. My current flat is a 5 room HDB valued at 400K with 170K left to service. The rental is avg 2K per month if I were to rent out. The combine income is 10K/mth and will have no issue servicing 2 properties with the rental.

Is it better to rent out or sell my current flat for a profit of abt 120K? Or rent out and wait for capital appreciation? All inputs welcome.

rent out ....

HDB is probably you gift from our Garment ....

[kgchong]

rent out ....

HDB is probably you gift from our Garment ....

agree... rent out now.. till price go higher... then consider sell...

[proud owner]

agree... rent out now.. till price go higher... then consider sell...

Or when mkt recover ... and if your private value goes up more and faster ...then sell private and move back to HDB

come back another day ... and keep accumulating $$

[isaaclim]

Dear all Gurus who may want to comment ;

I will be moving to a pvt property which was bought in 2007 for 600K, paid 20% and loan 80%. My current flat is a 5 room HDB valued at 400K with 170K left to service. The rental is avg 2K per month if I were to rent out. The combine income is 10K/mth and will have no issue servicing 2 properties with the rental.

Is it better to rent out or sell my current flat for a profit of abt 120K? Or rent out and wait for capital appreciation? All inputs welcome.

5rm sell is almost death. Unless you sell it below valuation. Otherwise you have only one option.

[i12buyhouse]

You have abt 650K outstanding loan to service if u decided to rent. It should be alright for a combine income of 12K include rental. Then , the question is how stable is both of your jobs. If one of u down , can u adjust your life style to cater for the tough situation...?

The real danger if u hold on both unit. The bank may ask u to top up your loan. You bought your unit during 2007 (peak) , very likely that the bank may start to go after u if the market continue to go south (this is not a question anymore , it is a fact)


The decision lie on your cash on hand and jobs security to tie u through. good luck




Dear all Gurus who may want to comment ;

I will be moving to a pvt property which was bought in 2007 for 600K, paid 20% and loan 80%. My current flat is a 5 room HDB valued at 400K with 170K left to service. The rental is avg 2K per month if I were to rent out. The combine income is 10K/mth and will have no issue servicing 2 properties with the rental.

Is it better to rent out or sell my current flat for a profit of abt 120K? Or rent out and wait for capital appreciation? All inputs welcome.

[Farmcow]

Dear all Gurus who may want to comment ;

I will be moving to a pvt property which was bought in 2007 for 600K, paid 20% and loan 80%. My current flat is a 5 room HDB valued at 400K with 170K left to service. The rental is avg 2K per month if I were to rent out. The combine income is 10K/mth and will have no issue servicing 2 properties with the rental.

Is it better to rent out or sell my current flat for a profit of abt 120K? Or rent out and wait for capital appreciation? All inputs welcome.


Basing on your 80% loan, your interest paid would be abt 160K with a tenure of 20years. Reduction of loan may save you at least half the interest paid, say 80K. Yes, your rental yield may be able to cover the interest, but for how long? Say 12K/yr, approx. 7 years payback for 80K. This calculation excludes HDB interest paid! Thats too long for me and that's based on a conservative approach that you are able to rent your HDB flat without any hassle.

Not fogetting the property tax. Property tax is base on the highest AV of the 2 that you are holding and the rate will be 10% of AV instead of 4%. That may turn up to be about 1K plus a year.

I believe you have check out the CPF regulation on multiple property and has taken care of the minimum sum require....

Conclusion, I would sell the HDB for a situation like this. Base on track record, HDB price hike will be very high at the initial 5 to 10 years. If the HDB exceeds 10 year, the selling power will decrease. If you were to buy a HDB flat at this moment, will choose a 5-8 year old property or a 15-20 year old property? Those whom go for the 15-20 years are those that like the location very very much!

However, that's my perspective towards the question asked. Decision is still individual. Take care and make sure you make the correct decision, most importantly is no regrets!

[Vizkid]

Thanks to all who advise.

I'm looking at this as a long term investment. But at the same time i'm also looking how I can maximise by CPF funds without much risk. In the mid term goal, I will redeem my HDB within 5 years with partial cash. I believe this will give me enough safety net if one should lose our job.

For now, I think I'm keeping my HDB and adopt the wait and see situation. Who knows it might turn out the way I wanted.

[Vizkid]

You have abt 650K outstanding loan to service if u decided to rent. It should be alright for a combine income of 12K include rental. Then , the question is how stable is both of your jobs. If one of u down , can u adjust your life style to cater for the tough situation...?

The real danger if u hold on both unit. The bank may ask u to top up your loan. You bought your unit during 2007 (peak) , very likely that the bank may start to go after u if the market continue to go south (this is not a question anymore , it is a fact)


The decision lie on your cash on hand and jobs security to tie u through. good luck

What do you mean if I hold 2 property the bank will ask me top up my loan? HDB loan is direct from HDB and my private is from UOB. I bought beginning 2007 and my unit has already appreciated 100K despite current situation. Does it affect me?

[loopy]

No, if your loan amount from bank is less than property value now, you don't need to worry.

[Petmail]

my cents worth...

you should hold on to your hdb and rent it out for passive income... there's no better income then to have a passive income which will generate revenue for you even when you are not working! when you rent it out, your tenants are actually paying the rent for you and still have some cash balance from the rental while you only have to worry the instalment for your pte apt. think it the other way.. your tenant is also subsidising partially your instalment for your apt as well.

hdb loan is the best singapore housing loan as the interest rate is fixed at 2.6% or rather 0.1% pegged on cpf interest rate. as long as cpf interest remains the same the interest will be forever... why bothers to go for early redemption to your hdb?

if you wanna save more interest, why not pay more for your pte apt instead and hopefully redeem your apt the soonest as the interest rate is more prone to the market situation and sentiment.

Most successful property investors if you realised had been renting their property out for long term investment instead of basing on flipping/buying&selling... As quoted by donald thrump; the most hatred and yet one of the most successful biz man: 'The longer you hold, the more you make'.

Hope this one helps!!!

:)
Pet

[Vizkid]

Thanks Petmail. This is what I thought so. I'm quite conservative hence my strategy in redeem full for my HDB. After which, I can use both our CPF and support our private, this will mean no partial cash repayment. My rental will be hard cash on hand to do other investment. Sounds logical?

[isaaclim]

Thanks Petmail. This is what I thought so. I'm quite conservative hence my strategy in redeem full for my HDB. After which, I can use both our CPF and support our private, this will mean no partial cash repayment. My rental will be hard cash on hand to do other investment. Sounds logical?

Ah... It depend! Whatever money you bank in your HDB loan account = The end! You cannot cash it back unless you sell it off.

So, this move more sound smart. But it may bite u one day. This is my experience. If not because of this stupid HDB, i already pocketed around 500K profit.

[AK47]

Yup, u will not be able to get back 2.6% from HDB after u buy private property. So let your HDB loan runs its natural course. I am sure your rental yield easily exceed 6%, why sell?

I wont sell my hdb
I wont redeem my hdb loan.

Bank loans are lower than HDB now, but for how long?


my cents worth...

you should hold on to your hdb and rent it out for passive income... there's no better income then to have a passive income which will generate revenue for you even when you are not working! when you rent it out, your tenants are actually paying the rent for you and still have some cash balance from the rental while you only have to worry the instalment for your pte apt. think it the other way.. your tenant is also subsidising partially your instalment for your apt as well.

hdb loan is the best singapore housing loan as the interest rate is fixed at 2.6% or rather 0.1% pegged on cpf interest rate. as long as cpf interest remains the same the interest will be forever... why bothers to go for early redemption to your hdb?

if you wanna save more interest, why not pay more for your pte apt instead and hopefully redeem your apt the soonest as the interest rate is more prone to the market situation and sentiment.

Most successful property investors if you realised had been renting their property out for long term investment instead of basing on flipping/buying&selling... As quoted by donald thrump; the most hatred and yet one of the most successful biz man: 'The longer you hold, the more you make'.

Hope this one helps!!!

:)
Pet

[Petmail]

I always remember this phrase... Passive Income Is Always The World Best Income As You Don't Need To Be Working At All Yet Still Being Paid!!!


:)
Pet

[focus]

Anyone knows how what is the average price psf for Semi-D or Terraces in Serangoon Garden Estate? I checked URA and they show recent transaction at $400-500 psf.. I am wondering what was the lowest in 2003.

[isaaclim]

Yup, u will not be able to get back 2.6% from HDB after u buy private property. So let your HDB loan runs its natural course. I am sure your rental yield easily exceed 6%, why sell?

I wont sell my hdb
I wont redeem my hdb loan.

Bank loans are lower than HDB now, but for how long?

There is an issue with renting out the existing HDB. It is very hard to find a high quality tenant that will maintain your unit and still willing to pay high rental.

Basically if you rent out your HDB, it is only for renovation fund raising or buying some time during the bad time so you can sell it at higher price in good time.

[Petmail]

There is an issue with renting out the existing HDB. It is very hard to find a high quality tenant that will maintain your unit and still willing to pay high rental.

Basically if you rent out your HDB, it is only for renovation fund raising or buying some time during the bad time so you can sell it at higher price in good time.


actually not really thru.. whether pte or hdb... depends on the rental budget the profile sometimes can still be pretty good.. my hdb tenant profile are currently not really very good but they kept my house clean and pays me well ahead of due date. my previous two tenant was really bad... even the senior red uniform sia stewardess also mess up my entire place till i almost fainted... its pretty indivdual.. i have also seen an unit rented out to a japanese director i heard... and during viewing i was really pissed and complained to my owner about the condition, socks & undergarments (looks unwashed) everywhere, blood stains on the beds... etc... super gross!!! i even inform my owner that i will be wasting his time and buyers' time as long as the tenant is not out of the house and till they get professional cleaners to clean the house up.

:)
Pet

:)
Pet

:)
Pet

[Vizkid]

So, how much property tax must I pay annually if I rent? Someone here says is 10% of the higher property, i.e. my private. So, how about the property tax for HDB? Does that mean 10% (private) + 4% (HDB) = 14% total for both?
Also, do I need to know of any additonal tax i need to take care of?....income tax...etc. I heard some ppl don't declare the rent to Govt...what's your view on that?

[loopy]

I don't think there is a link between your HDB rental and your private property as far as tax rate concern. People who pay off HDB loan or work overseas can also rent out HDB flat even they don't have other private property.

If you rent out your HDB or condo, you pay 10% of annual value of the property. That's all. Since HDB flat's annual value is lower, your tax is lower in fact. You need to go to HDB office to apply first, and fill in some form. I don't know if HDB forward such info to IRAS or not.

When you file income tax, you need to fill the "other income" portion (on the website you will open up a long list), then you can fill the property address etc, you can also deduct interest, HDB or town council fee etc.


As someone said, it is your luck to find a good tenant. For HDB, you can rent to foreign students (studying in NUS/NTU/SP etc), or some professionals (nurses, engineers etc). Of course, you need to check their visa/work permits (and file/update info with HDB).


Remember there are a lot of things to do once you rent out the place... If you don't want to bother (fixing leaking water heater, for example), you need to find good service company or individual (such as electrician/plumber).

[loopy]

I heard some ppl don't declare the rent to Govt...what's your view on that?

That's not a good idea at all! It is really a penny wise approach. If you are able to make money from your flat, why you wan to save a few percentage points and get into big troubles?

IRAS will ask you for sure. The reason is that when you rent out a place you need to pay something called stamp duty for lease. I am not a lawyer but I think Gov't collect "stamp duty" as a form of tax. Also, Gov't knows you rent out the property once you go to buy stamp duty.

On the other hand, if you don't get stamp duty, then your lease may not become a legal document at all(don't ask me if it is true, I am not an expert).

To rent property (esp expensive ones), you normally deal with a company, and agents will definitely get the stamp duty for the lease. Otherwise, if something goes wrong, both sides will have trouble to sort out issues.

If you rent your place to your relatives for a while, you probably can trust them, then you don't have a lease nor have to get stamp duty. In such case, if you take cash, IRAS may not have time to track you down:-), but it is hard to think of someone will need a place if they are also Singaporeans. Why don't they just get their own flats?

[Vizkid]

Thank you for your sound advise!