Sell HDB or Keep?

[Nestor]

The 99 years start running when the land is sold by URA to the developers. So, even if the property is completed in 1999, more than 11 years would have already ran out. The planning and construction of the property could easily take 2 years, so that's 13yrs out of the 99.

I think it's sold in 1995, which translate to 16 years already. Sounds like a no-go for DC!

Sheesh I'm stuck!

[sh]

I think it's sold in 1995, which translate to 16 years already. Sounds like a no-go for DC!

Sheesh I'm stuck!

The issue with DC is that it is surrounded by freehold properties. It is easy for buyers to choose freehold over leasehold. In areas where there is only leasehold, buyers who like the area have no choice and no way to compare.

As the property gets older the price difference is going to accelerate.

[vip]

After all, how many private property owners actually downgrade or subsequently invest in HDB? Very few.

During the bad times between 2002 and 2005, I went for hundreds of flat viewings and asked all the owners why they had to sell their condo units.

Many gave the answer of downgrading to HDB.

Although the market is bad at that time, prices of HDBs are still strong due to lots of downgrading from condo (but less upgrading to condo).

[Nestor]

So I think I got some questions answered thanks to everyone here. The general advise is to

- keep the hdb and buy the condo you can afford
- affordable means having enough cash to weather through at least 6 months of job loss or no tenant after purchase
- since it is peak price now, be prepared that rental yield might not cover the monthly cost of the condo if property dip, so might be wise to wait and see

With that the only viable choice is Duchess since I can really afford there having kept my HDB. But because Duchess is surrounded by freeholds and that it's 16 years old already, buying it now might not be a good thing after all.

It's starting to sound like I should just call off the idea and wait a year more, and start the cycle again with the intention of getting a 1.5m place while keeping the HDB

I can of cos sell of my HDB and get the "dream" unit, but that will be going against the advise of almost everyone I asked (keeping HDB)

[richwang]

If the main objective is for your kids to get into that school, two options:

1) Rent a place nearby. I have friend rented a place but never really stayed, just trying to get into the school. I believe the rule says 1 year+ for renting;

2) Try to get into GEP - top 1% in Singapore just for math and English test at P2 (?), then you can transfer school. I have another friend did that for his twin boys.

If none works out, try some tuition in The Learning Lab. That's as good as any top school. My son learnt English there, and he managed to enter top secondary school from below-average priamry school.

Thanks,
Richard

[Nestor]

Thanks. The GEP option is really a far fetch idea, not easily achievable, I'll have to fall on the rental option as a last resort. You mean your friend rented a unit but didn't stay there at all? I didn't know that is allowed from the school's perspective... But if that is the case then it's possible to rent the cheapest and smallest unit for 2 years at about 84k for 2 years with zero hope for any returns, and not stay there.

It will be the worst case scenario I think. It might be a better deal in my case to buy a unit in duchess, rent out my hdb to subsidize part of the condo and still have a little hope of capital appreciation later. If the price doesn't increase at all, it might still be worthwhile to hold it and rent out to expat and local families who's trying to do the same as me?

If the main objective is for your kids to get into that school, two options:

1) Rent a place nearby. I have friend rented a place but never really stayed, just trying to get into the school. I believe the rule says 1 year+ for renting;

2) Try to get into GEP - top 1% in Singapore just for math and English test at P2 (?), then you can transfer school. I have another friend did that for his twin boys.

If none works out, try some tuition in The Learning Lab. That's as good as any top school. My son learnt English there, and he managed to enter top secondary school from below-average priamry school.

Thanks,
Richard

[ocoloco79]

Take my comments with a pinch of salt, I am no expert here, but had benefitted greatly from the experts here. Our situation is similar. Our combine annual income is about $150000+, but no kids nor other huge commitments . I owned a 26 years old 5 room hdb about 700m away from mrt (10 mins walk)that fetched me a $250K profit after I sold it off. I wanted to keep both, and of course that will be ideal if affordabilty can never be an issue. My condo cost about 1mil and I took a 80% loan. My cash is lesser than yours, only slightly more than 200K. Some advised me to keep hdb, while some advised me to sell it because I am actually stretching financially if we have to take into acc of Interest rates hikes in future as well as margin calls if property really crashes one day. In the end, I chose to sell it off after weighing all cost and benefit. HDB rental yield is high, but capital appreciation is really very limited. I calculated the minimum rental that my unit can fetch annually, minus off the taxs, plus any possible additional cost that can incurr and realised that it will take me about 25 years to accumulate the same profit if I were to sell off my hdb now. If I were to take into account of the trouble related to renting plus inflation and vacant periods, I think that it is better off if I let go. I felt a big sense of relief after selling my hdb, and now I can enjoy life, just bought my first rolex , and going europe tour soon

[Komo]

Ialways think that if u want to play with property investment, u need at least 3 properties to start with inuding one for own stay. Good to have a hdb in the portfolio for cashflow as rental yield probably best. Should fully repay hdb loan if possible as interest cost is higher than banks. Believe now the new rule is u do not have to sell hdb if mop is more than 5 yrs. If I were u I will buy dc as investment. That is don't commit too much. Get smaller unit but still good enough for family since probably this group will rent your unit. Do that you have achieved 2 investment properties. Dream or retirement home can be later. That will probably be a landed one!

[Nestor]

That's very encouraging and I will see if that can be done! Thanks

Ialways think that if u want to play with property investment, u need at least 3 properties to start with inuding one for own stay. Good to have a hdb in the portfolio for cashflow as rental yield probably best. Should fully repay hdb loan if possible as interest cost is higher than banks. Believe now the new rule is u do not have to sell hdb if mop is more than 5 yrs. If I were u I will buy dc as investment. That is don't commit too much. Get smaller unit but still good enough for family since probably this group will rent your unit. Do that you have achieved 2 investment properties. Dream or retirement home can be later. That will probably be a landed one!

[Nestor]

Wow your situation is extremely similar to mine... I'll have to think harder about selling my HDB but I agree with you, selling it will mean a lot more cash later. How much HDB loan did you have remaining when you make the sale? We're about 90k left. Your condo is a freehold I suppose?

Take my comments with a pinch of salt, I am no expert here, but had benefitted greatly from the experts here. Our situation is similar. Our combine annual income is about $150000+, but no kids nor other huge commitments . I owned a 26 years old 5 room hdb about 700m away from mrt (10 mins walk)that fetched me a $250K profit after I sold it off. I wanted to keep both, and of course that will be ideal if affordabilty can never be an issue. My condo cost about 1mil and I took a 80% loan. My cash is lesser than yours, only slightly more than 200K. Some advised me to keep hdb, while some advised me to sell it because I am actually stretching financially if we have to take into acc of Interest rates hikes in future as well as margin calls if property really crashes one day. In the end, I chose to sell it off after weighing all cost and benefit. HDB rental yield is high, but capital appreciation is really very limited. I calculated the minimum rental that my unit can fetch annually, minus off the taxs, plus any possible additional cost that can incurr and realised that it will take me about 25 years to accumulate the same profit if I were to sell off my hdb now. If I were to take into account of the trouble related to renting plus inflation and vacant periods, I think that it is better off if I let go. I felt a big sense of relief after selling my hdb, and now I can enjoy life, just bought my first rolex , and going europe tour soon

[ocoloco79]

Wow your situation is extremely similar to mine... I'll have to think harder about selling my HDB but I agree with you, selling it will mean a lot more cash later. How much HDB loan did you have remaining when you make the sale? We're about 90k left. Your condo is a freehold I suppose?

Yes, my condo is freehold in D19, about 600m from kovan mrt, primo residences. My hdb loan left $130k, 40k more than yours After selling hdb, i got back about 300k+ in terms of cash and cpf. Thereafter I reduce my loan to 50% loan from bank, so every month pay by cpf, no need top up cash cos low interest. In future if interest hike, need not pay too much cash too.. Can save all over again to buy studio next time, better investment compared to hdb IMO.

[mcmlxxvi]

Can just rent out hdb like that and stay in condo meh? I thought approval is required, even after MOP? And I doubt getting children into top schools counts as a valid reason. Sorry am noob when comes to hdb.

[ocoloco79]

Can just rent out hdb like that and stay in condo meh? I thought approval is required, even after MOP? And I doubt getting children into top schools counts as a valid reason. Sorry am noob when comes to hdb.

yes, approval required, have to write in to get approval..

[Nestor]

Can just rent out hdb like that and stay in condo meh? I thought approval is required, even after MOP? And I doubt getting children into top schools counts as a valid reason. Sorry am noob when comes to hdb.

That is actually an excellent question. I haven't thought of that at all. Approval is required and I'm not sure if momentary resident address for school enrollment is a valid reason, I also think it might not be. This kinda change the ballgame a little. Maybe there are good reasons to sell the HDB after all.

If I hold HDB and buy Duchess at 99 years, get average rental yield with little capital appreciation and in the end I still have to sell my HDB to move in when it's time for enrollment, because gov doesn't allow me to rent the HDB out, I will be stuck with a over 20 year old condo, cannot rent out, with little money left for other investment, and with historical bad capital appreciation.

So... it seems like selling HDB and buying condo is back as an option! Am I flicker minded or just getting more inform? Argh...

[Fleur]

Actually, buying the condo while holding the hdb seems to be a good idea. I think 300k cash is good and should be sufficient. Duchess Crest is in a good location, although it is 99 yr leasehold. Since it is in a good location, there could be chances of en-bloc when the property is older, especially since, it is quite low-rise.

[gfoo]

That is actually an excellent question. I haven't thought of that at all. Approval is required and I'm not sure if momentary resident address for school enrollment is a valid reason, I also think it might not be. This kinda change the ballgame a little. Maybe there are good reasons to sell the HDB after all.

If I hold HDB and buy Duchess at 99 years, get average rental yield with little capital appreciation and in the end I still have to sell my HDB to move in when it's time for enrollment, because gov doesn't allow me to rent the HDB out, I will be stuck with a over 20 year old condo, cannot rent out, with little money left for other investment, and with historical bad capital appreciation.

So... it seems like selling HDB and buying condo is back as an option! Am I flicker minded or just getting more inform? Argh...

i think you are stretching yourself too much. sell the hdb, stay in the condo, have fun with your kids, and live a nice comfy life with buffer in the bank.

or stay in the HDB, forego the condo, and also have a great life.

HDB prices are already so high, and 12,000 more in supply coming each year, with singaporeans complaining so much that immigration is being stemmed. what will happen next?

the root of all evil, is the lack of money

[mcmlxxvi]

That is actually an excellent question. I haven't thought of that at all. Approval is required and I'm not sure if momentary resident address for school enrollment is a valid reason, I also think it might not be. This kinda change the ballgame a little. Maybe there are good reasons to sell the HDB after all.

If I hold HDB and buy Duchess at 99 years, get average rental yield with little capital appreciation and in the end I still have to sell my HDB to move in when it's time for enrollment, because gov doesn't allow me to rent the HDB out, I will be stuck with a over 20 year old condo, cannot rent out, with little money left for other investment, and with historical bad capital appreciation.

So... it seems like selling HDB and buying condo is back as an option! Am I flicker minded or just getting more inform? Argh...

Your No. 1 objective is getting your kid into the NYPS right? Then you have no choice but to sell HDB and get the private unless you very sure you can get HDB approval to 'rent hdb and stay condo'. Otherwise you stay in the private for 1.5 yrs during which you leave the HDB empty, but pay 10% property tax on the private (no you can't owner occupy both homes sorry if that's what you thinking). I don't think school will rat on you to HDB...

[Nestor]

Your No. 1 objective is getting your kid into the NYPS right? Then you have no choice but to sell HDB and get the private unless you very sure you can get HDB approval to 'rent hdb and stay condo'. Otherwise you stay in the private for 1.5 yrs during which you leave the HDB empty, but pay 10% property tax on the private (no you can't owner occupy both homes sorry if that's what you thinking). I don't think school will rat on you to HDB...

Yes that's the main priority. I just checked with my agent and she said I can rent it out because it's over MOP already, but to be safe I think I will just head down to HDB and ask personally. If I can't then the answer is obvious, it will be dumb for me to keep the HDB.

[Nestor]

Thanks gfoo. It's a very difficult decision for me as well. I presume you mean the HDB prices will drop in time to come so it's better for me to sell the HDB and buy the condo. I will bear that last sentence in mind!

i think you are stretching yourself too much. sell the hdb, stay in the condo, have fun with your kids, and live a nice comfy life with buffer in the bank.

or stay in the HDB, forego the condo, and also have a great life.

HDB prices are already so high, and 12,000 more in supply coming each year, with singaporeans complaining so much that immigration is being stemmed. what will happen next?

the root of all evil, is the lack of money

[rattydrama]

If past 5 years with or without loan can rent out the entire flat but must get HDB approval.

You have made your first buck from HDB, may well take profits and move on with the proceeds you have. Will it be worst off than your situation now since you can afford the installments and you can hold for at least 1o years? Any up and down of property price may not be a concern for you if you can hold and with the right property you bought.

To me, the price of HDB will be stabilized at this juncture. The COV will go down and in the next 3 years, there will be more supplies. This will impact the resale price as some will prefer new units. The MOP is going to impact re-sale flat buyer decision too.

In fact COV has gone down to 10K – 15K in general in the North area from what I heard.

You may start to look at ready unit now with upside potential and good rental. This apartment may not necessarily near NYPS but some other good school – Pei Hwa Primary? Put your balance money into CPF with 2.5% interest rate.

At the same time, accumulate more cash and wait for opportunity to buy into projects near NYPS if you still have time. If prices drop or if there is a fire sale, you have ready cash to commit.

BTW, if you rent a unit near NYPS, you need to stay there cos the school rep will visit yr place to ensure that you are a resident within 1 km from what I heard from colleagues.

I think near good school should be a consideration but not a must since buying into property is a big investment – better make sure it can help you to make money or at worst case scenario preserve your hard earn money for retirement.

No money no honey and no honey make us a miserable man.

That is actually an excellent question. I haven't thought of that at all. Approval is required and I'm not sure if momentary resident address for school enrollment is a valid reason, I also think it might not be. This kinda change the ballgame a little. Maybe there are good reasons to sell the HDB after all.

If I hold HDB and buy Duchess at 99 years, get average rental yield with little capital appreciation and in the end I still have to sell my HDB to move in when it's time for enrollment, because gov doesn't allow me to rent the HDB out, I will be stuck with a over 20 year old condo, cannot rent out, with little money left for other investment, and with historical bad capital appreciation.

So... it seems like selling HDB and buying condo is back as an option! Am I flicker minded or just getting more inform? Argh...

[roly8]

i think you are stretching yourself too much. sell the hdb, stay in the condo, have fun with your kids, and live a nice comfy life with buffer in the bank.

or stay in the HDB, forego the condo, and also have a great life.

HDB prices are already so high, and 12,000 more in supply coming each year, with singaporeans complaining so much that immigration is being stemmed. what will happen next?

the root of all evil, is the lack of money

nice ~~

[ocoloco79]

Usually after MOP, Hdb will allow us to sublet whole unit, but subject to approval. But so far I didnt hear of anyone not being able to sublet whole unit out after MOP. But HDB cannot guarantee you that approval will ALWAYS be granted. That is part of my dilema too when deciding whether to sell my hdb that time. Also due to the uncertainties in HDB ruling, I am just too afraid that one day, HDB will just go back to the old rule whereby private property owners must stay in hdb and rent out private. If that reali happens, many people will be rushing to sell their hdb, prices of hdb will suffer. However I think too much.. what is the likehood of this happening? Unless they want to lose out in election.

[ocoloco79]

If past 5 years with or without loan can rent out the entire flat but must get HDB approval.

You have made your first buck from HDB, may well take profits and move on with the proceeds you have. Will it be worst off than your situation now since you can afford the installments and you can hold for at least 1o years? Any up and down of property price may not be a concern for you if you can hold and with the right property you bought.

To me, the price of HDB will be stabilized at this juncture. The COV will go down and in the next 3 years, there will be more supplies. This will impact the resale price as some will prefer new units. The MOP is going to impact re-sale flat buyer decision too.

In fact COV has gone down to 10K – 15K in general in the North area from what I heard.

You may start to look at ready unit now with upside potential and good rental. This apartment may not necessarily near NYPS but some other good school – Pei Hwa Primary? Put your balance money into CPF with 2.5% interest rate.

At the same time, accumulate more cash and wait for opportunity to buy into projects near NYPS if you still have time. If prices drop or if there is a fire sale, you have ready cash to commit.

BTW, if you rent a unit near NYPS, you need to stay there cos the school rep will visit yr place to ensure that you are a resident within 1 km from what I heard from colleagues.

I think near good school should be a consideration but not a must since buying into property is a big investment – better make sure it can help you to make money or at worst case scenario preserve your hard earn money for retirement.

No money no honey and no honey make us a miserable man.

Agree! Dun need to reduce loan if you can afford, wait for good opportunities to go into the market with your hdb proceeds. May get a much much better investment property than hdb.. I was adviced to do that too, but still I choose to reduce loan cos I want to be safer

[devilplate]

Agree! Dun need to reduce loan if you can afford, wait for good opportunities to go into the market with your hdb proceeds. May get a much much better investment property than hdb.. I was adviced to do that too, but still I choose to reduce loan cos I want to be safer

u shdnt reduce ur loan with ur HOT HOT CASH....especially now the interest rate so so low

i din mention about mortgage packages like stanchart mortgage 1 sibor meh?

however, if u r retired and more den perhaps 50yo, den pls go ahead and fully redemn ur 'primary residence' mortgage loan and leave the younger ones to fry ppty....u shd be sitting back relax and watching the show oredi

[mcmlxxvi]

u shdnt reduce ur loan with ur HOT HOT CASH....especially now the interest rate so so low

i din mention about mortgage packages like stanchart mortgage 1 sibor meh?

however, if u r retired and more den perhaps 50yo, den pls go ahead and fully redemn ur 'primary residence' mortgage loan and leave the younger ones to fry ppty....u shd be sitting back relax and watching the show oredi

Ya I dunno why people rush to pay off their mortgage which is the cheapest money anyone can lend vs car vs reno vs credit card loan... I actually met Private Bankers with that conservative (yet illogical) mindset - that is, until they know me and listen to my explanation.

If they are young below 40s and working there is absolutely no reason why they should do that. As they say youth is priceless and in this case it is not just pricele$$ it is $$$ itself.

Do people really shiver with hot ca$h in hands dunno what to best make of it??? Ridiculous.

[rattydrama]

wats the rate for stanchart mortgage 1 sibor?

u shdnt reduce ur loan with ur HOT HOT CASH....especially now the interest rate so so low

i din mention about mortgage packages like stanchart mortgage 1 sibor meh?

however, if u r retired and more den perhaps 50yo, den pls go ahead and fully redemn ur 'primary residence' mortgage loan and leave the younger ones to fry ppty....u shd be sitting back relax and watching the show oredi

[devilplate]

Ya I dunno why people rush to pay off their mortgage which is the cheapest money anyone can lend vs car vs reno vs credit card loan...

yeah....cheapest loan on earth

[DC33_2008]

Agree with you on that. One should leverage on other people's money, ie. it could be the bank, given the current situation. BUT do not overleverage. Use own cash invest in instruments for higher returns. That's is one way the rich becomes richer.

Ya I dunno why people rush to pay off their mortgage which is the cheapest money anyone can lend vs car vs reno vs credit card loan... I actually met Private Bankers with that conservative (yet illogical) mindset - that is, until they know me and listen to my explanation.

If they are young below 40s and working there is absolutely no reason why they should do that. As they say youth is priceless and in this case it is not just pricele$$ it is $$$ itself.

Do people really shiver with hot ca$h in hands dunno what to best make of it??? Ridiculous.

[rattydrama]

how to be as savvy as your guys.....can share?

Agree with you on that. One should leverage on other people's money, ie. it could be the bank, given the current situation. BUT do not overleverage. Use own cash invest in instruments for higher returns. That's is one way the rich becomes richer.

[devilplate]

wats the rate for stanchart mortgage 1 sibor?

its not about the rate,...their rates nvr the best....

read their website lor....this package is for those who have spare cash and duno wat to do with it at the moment(waiting for opportunity )

http://www.standardchartered.com.sg/...eone-sibor/en/