Originally Posted by thomastansb
have you heard of a phase call "Penny Smart, Pound Foolish"
Originally Posted by thomastansb
have you heard of a phase call "Penny Smart, Pound Foolish"
Jadey, please don't be offended but I think you may be slightly confused.Originally Posted by Jadey
No shame if you don't know about matters such as annual value or how to calculate rental yield. If one is willing to humble down a bit, there is a lot to learn from many of the forummers here.
Btw, I thought the idiom was "Penny Wise, Pound Foolish". Well, I guess "Penny Smart Pound Foolish" mean the same thing, but what has it got to do with AV or Rental Yield?
You can actually do whatever calculation you want, as long as it make sense to youOriginally Posted by Jadey
you can use
1. current rent/current market value: it tells you if you buy it now at the market price, what is your return. it may also be a good indicator whether you want to exit now
2. current rent/purchase price: it tells you what's the current return on the money you put in, assuming 100% equity. it tells you if you had made a smart investment decision some time ago
3. your neighbor's rent/purchase price: it tells you if you were as lucky as your neighbor whose tenant pays very high rent, what your return would be. It does not tell you much, except the potential yield you may get if your tenant pack and run away tonight
4. your neighbor's rent/purchase price: it tells you if you were as unlucky as your neighbor whose tenant pays very low rent, what your return would be. It does not tell you much, except the extent you may suffer if your tenant packs and run away tonight
I cannot think of any more scenarios but what I am trying to say is: as long as the calculation is mathematically correct, and the results tell you something, not need to say it is wrong
People have been talking about the possibility since March. I get very excited when people have bad news . Fortune favours the bold.Originally Posted by rockinsg
Besides, certain stocks will still do very well despite weak GDP, exports, etc, and some property prices will still hold up well too.
People like to buy high, sell lowOriginally Posted by Eldenfirefly
Question: What do you want?
Answer: I don't.... hmmmm... ahah! I want what you want!
Met a former neighbour last sunday. Told me he just sold his nearing TOP property and made a profit of $150K. Now he has headache and ask me which option should he take:
1. Keep the profit and wait for the crash to buy property or stock
2. Buy another property immediately of better location since he is buying using part of the profit (i.e buy at lower $psf in actual fact).
3. Use the money to buy a car to enjoy
4. Any other option?
Anyone here has any advice?
In today's context, $150k is actually quite little. COE for car is already around $70k. Better to save it for a rainy day (medical fees are expensive) if there is no intention to loan more to buy another house.Originally Posted by 3C
My advice is not to give any advice. If he loses money he might blame you
Rule of thumb is: if don't know what to do, best is not to do anything.
Of course get a car ! Get ur priority right man! Money is not yours until it's spentOriginally Posted by 3C
Otherwise take profit already and re- enter the market at a diff segment if u think that segment is relatively underperforming. Entering back at the same segment is totally pointless as it's as if u didn't sell, and yet incurring much more transaction cost. Plus if it's a second mortgage u lost the old gearing.
i m a humble singaporean and born n bred by normal singaporeans. No communist blood flows thru my veins. Sorry if i hurt your feeling by speaking the truth.Originally Posted by rockinsg
Which Govt feed the property bubble till it burst and affected the world? Which Govt encouraged the bankers and exported their shitty products to the world with with their superior banking system. Having policies to let pple refinance their debts and take more $$$ to spend first.
Nothing against the USA govt. The so called best democracy political system doesnt seems to be able to create laws, policies, environment for business to grow. The last 10 years, i only see negative trade deficit.
U think its correct to focus on cost cutting and not increase tax on the rich n business to increase income for nation? Y the best GOVT in the world is protecting the rich and taking away from the poor? To me its just want a easy way out, increase more borrowing and hopeful some idiot nation come support and lend more $$$ to solve their immediate debts. More of spending future $$$$. ISsnt it what got them into this shithole in the first place and now they want more of it.....
Feel free to air your views on my opinions and gun them down. Its not USA vs China in this world , neither its USA and the others.
US needs Bill Clinton to come back...
http://news.bbc.co.uk/2/hi/business/1110165.stm
i would say take some good $$$$ and spend it on family. Spend it on kids education, take family on a good trip. and use the $$$ to improve the quality of family's life. Help the children start a little saving acc to help them learn the value of savings from young.Originally Posted by 3C
Save the rest for future opportunties
Bill is good! under his leadership, USA had 10 good years. Till the war mongers come along.Originally Posted by hyenergix
I think you go ask around, people will still say they deserve it, and even more so when Wall Street held government ransom to print $$ to salvage the rest of the economy and non-financial sectors.Originally Posted by rockinsg
Recession due to the average person's belt tightening versus global financial crisis triggered by greedy bankers. I think we all saw clearly which was worse.
But the bankers will not see it this way. They are only making $$$$ on the opportunities that arises. Market is falling? Short it some more. Didnt GS made the most $$$$ predicting the sub prime crash and burn?Originally Posted by solsys
Nothing personal, its just business.
10 years or 8 years? Bill was sandwiched between 2 Bushes who were at loggerheads with Sad guy dam so his achievements were evidently more well received in stark contrast.Originally Posted by DaytonaSS
Originally Posted by SpinCity
1) When talking about rental return using original purchase price e.g 10 15 20 or 30 years ago, it will not make any sense because you are not factoring in the cost of inflation. Basically you are using today value of money to compare against the value of money from the past, which also mean the the rental returns of property will continue to rise in tandem with inflation.
2) When using original purchase price to calculate rental return, there is no way you will be able to tell if your are over charging or grossly under charging your rental.
3) would it make any sense to you if someone tell you that the rental yield of X property ranges from 2% to 100%, "depending on your original purchase price"?
Calculating rental yield based on original purchase price is as good as saying I made 100% profit from my property without tell you how long have you been holding the property.
In any investment, there must always be a time line, or else, how do you measure your returns?
in my opinion, democrats are pro economic growth and republicans are pro wars. Too bad Bill have to shit at where he eats.Originally Posted by ysyap
Thanks for offering to share..can I get your expert opinion on this.Originally Posted by howgozit
Does rental drives value of property or value of property drives rental?
Last edited by Jadey; 03-08-11 at 22:19.
I would say invest on self-improvement and health are good alternatives. We can't possible bring the $ and properties to another world. They will be made of recycled paper and are dirt cheap, not sure about property policies at the other world though (property tax, stamp duty?)Originally Posted by DaytonaSS
What has this got to do with Annual Value calculated by IRAS or Rental Yield?Originally Posted by Jadey
We will come back to what I said later. Appreciate your expert opinion on this question.Originally Posted by howgozit
Oh... you are mistaken. I am no expert, when I mentioned you could learn from the forummers here I wasn't referring to me but the others.Originally Posted by Jadey
wrt your question, my (shallow) opinion is that rental drives the value of the property more than value of the property drive rental.
Did I answer correctly? can you enlighten?
You could be right, howeverOriginally Posted by howgozit
Rental yield of CCR properties have always been very lousy as compared to OCR or HDB flat, but somehow they are still the most expensive. Any explanation on that?
When property price surge in singapore, does it surge because rental yield increases?
Well not just CCR properties have low yield, landed properties as a whole have very low yied as well. This has been the case all along. This is consistent with the value of the property being unable to drive the rental... no?Originally Posted by Jadey
Property price surge because of many factors. Prospective rental yield is a possible contributing factor for some properties.
If like you said, rental yield drives property value, then value of properties with low yield should not be appreciating at all, or perhaps should depreciate till the rental yield become attractive again.Originally Posted by howgozit
I think you have mistaken me again.Originally Posted by Jadey
I said rental drives value more than value drives rental. This means rental yield contributes more to value but not always. Landed and CCR are a case in point.
Then you will be talking about very complex calculation. Here, we talk about simple rental yield. Rent x 12 / purchase price.
If you are talking about inflation adjusted returns, then there are many interesting things to factor in. For example, we can have seasonally adjusted rental yield? Currency adjusted rental yield. Just to name a few. The list is virtually endless and you are only talking about inflation.
So to make things very simple, rental x 12 / purchase price.
Your point 2 = There is no way to calculate. You have to accept market rate. You mean you bought at a high price then you ask for high rental? What kind of logic is that? Even if you bought high high and when rental drop, you also lan lan rent out low. Unless you keep it empty.
Your point 3 = Nope. Rental is calculated based on PURCHASE PRICE. This I have been saying until the cow come home (thank you Low Thia Kiang). Current buyer buy at the price, use rental x 12 / purchase price. If first buyer buy 100k and rent out at 10k per year, first buyer having 10% rental yield. Second buyer buy from first buyer at 200k, so second buyer is deemed to be having 5% yield. Got it?
Your last point = Which I said earlier. What kind of measurements you want? You want, we can also factor in exchange rate. Why stop at inflation, right? What about asset depreciation? That is why we use the simplest formula. Assume you buy an asset at 100k, returns 10k means 10% returns. Very simple.
Originally Posted by Jadey
None. Supply and demand drive rental. Doesn't mean you buy high, you can rent out high even though you are asking high. Your one unit cannot possibly beat the market.
I ask you, you buy very high. But no one renting from you because very little demand. Maybe because Government restrict foreigners. You still ask very high rental? There will be confirm one buay ta han accept lower rental. Ask yourself, who rent your house if got too much supply and very little demand.
Or you still thinking property price drive rental?
Originally Posted by Jadey
Rental is just one of the factor. Supply and demand still the key factor but still many many factors like location etc.
East coast rental is lousy. But many people like to buy for own stay. So prices there are higher but rental is bad because it is city fringe at best with no MRT.
Originally Posted by Jadey
Rental is just one of the factor. People might pay more for location. Or people might pay more for serenity. Doesn't mean must hit 5% rental yield you buy. Some location 2% yield all the years. Supply and demand.
Originally Posted by Jadey