To buy now OR Not... - dilemma..

[sotidy]

Many apologies for the confusion.. Please allow me to clarify again, as below :

1. If chiong :

Income :
Assuming heng can get montly SGD3500 rental income for 2nd condo = SGD3500

Cost :
Mgt fee for the 2nd condo(assuming) = SGD200
If i can change to a lower HDB rental hse soon = SGD2200(assuming)
Monthly repayment of SGD800K bank loan(assuming 1.5% for 30 yrs) for 2nd condo = SGD2700(gotten from property guru)
** Net outgoing cash = SGD1600

2. If not chiong :
Continue stay at current rented HDB hse = SGD2700(sunk cost)

Overall, I still attain 'net savings' of SGD1100 if i chiong, by paying SGD1600.....

Of course, the above are just simple calculations..

Personally even if chiong, it is not attractive to me.
What you 'earn' from the 2nd condo rental is S$3500 but what you pay is S$2700 (mortgage) + S$200 (maintenance) + S$200 (property and income tax) = S$3100. So effectively u just earn S$400 per month and you have to lock in your 200k+ with 4 year SSD. It's not worth the time and effort in my view.

So if you just want S$400x12 from you 200k+, one of the safest way is to go explore slightly than better fixed deposits at say Maybank (Isavvy time deposit about 1.5%).

Just my view.

[Petertan123]

Don't forget all the miscellaneous stuffs like maintenance fee, property tax. Also, mortgage rate can also increase ur cost too. This is especially so if all the banks agree to increase their spread in tandem.

Better be kiasi than kiasu

Bro Sotidy,

You are right.. I have forgotten the monthy maintainence costs and others..

So it should be over 9 large ones monthly in worst situation.. sheww...

[Petertan123]

Personally even if chiong, it is not attractive to me.
What you 'earn' from the 2nd condo rental is S$3500 but what you pay is S$2700 (mortgage) + S$200 (maintenance) + S$200 (property and income tax) = S$3100. So effectively u just earn S$400 per month and you have to lock in your 200k+ with 4 year SSD. It's not worth the time and effort in my view.

So if you just want S$400x12 from you 200k+, one of the safest way is to go explore slightly than better fixed deposits at say Maybank (Isavvy time deposit about 1.5%).

Just my view.

Agreed too...but if I heng heng can get 'undervalued' ones(crossing fingers), then I could have possible upside potential in capital gain after 4 yrs..

Of course, depends on how much holding power I can tahan now..in waiting...

[kane]

Agreed too...but if I heng heng can get 'undervalued' ones(crossing fingers), then I could have possible upside potential in capital gain after 4 yrs..

Of course, depends on how much holding power I can tahan now..in waiting...

what may look like heng heng today may not look like heng heng tomorrow. property is not a game of heng heng.

[sotidy]

Agreed too...but if I heng heng can get 'undervalued' ones(crossing fingers), then I could have possible upside potential in capital gain after 4 yrs..

Of course, depends on how much holding power I can tahan now..in waiting...

Better to wait until your patience run out than to just go and wack one and then be in pain.

Since you mentioned you already have sleepless night, I think you really need to think 100 times before toying with the thought of another condo because you might end up with depression....

[devilplate]

Can our bro petertan eligible to buy a resale flat?

If yes, can consider to buy now to stay..find those cheaper ones below 400k

If not, continue to rent and wait for ur new condo

Its suicidal to commit another condo now wif just 250k.....

All da best!

[Regulators]

You must have cashed out on your hdb which was probably the mistake you made. You probably thought that hdb pxs would fall given the cooling measures. it is wise of you to put first pty under your wife's name to maximize second loan. To save on rental, only way is stay with relative while looking for another place to buy. you can probably only afford up to a million dollar pty, but I would stick to a $8xxk pty, save some moolah in the bank.

[marktkt22]

Your limited cash will not ride through a storm, if it really come.....
This is akin to playing Russian roulette

[Douk]

Can you sell your new condo? Assuming, there is profit from your condo sale and no Ssd, Get a resale condo at OCR, move into it, While keeping your remaining saving for next investment.

Hi all Gurus,

I have a real headache here and it is driving me sleepless recently... Would sincerely appreciate some sound advise from all the pros here...

Background :
- I am Singaporean and is now staying in a rented HDB house, monthly rental at SGD2700, because of some past mistake make which I do not want to mention here for simplicity purpose.

- Our total savings(including all CPF) is only about SGD250K...not much actually..

- We have a family condo TOP in yr2014 meant for permanent staying, and it's monthly repayment to the developer will soon to be near SGD3000 in 7-8 months time later. Now is near one thousand only in monthly repayment.


Intention :
We would hope to buy one more condo(2 bedder - less than SGD1m) for mainly 3 reasons below.

1. Can soon(3 months later) offset the current monthly HDB rental cost of SGD2700 while waiting for the family condo to TOP in yr2014.

2. Can 'breathe' a little financially once we are require to pay the SGD3000 monthly repayment for the family condo 7-8 months later, because can then use the rental from additional purchase condo to offset the HDB rental SGD2700 liao.

3. Can use this additional condo for retirement purpose later(collecting rental) once we are able to pull it through altogether.



Dilemma :

1) Should we really buy another condo, given the current gloomy market and with such limited financial status of SGD250k ? Are we over our head, and should not think of buying at all ??

2) If buy now, the house prices are still much on the highside, comparing YTY..

3) If dont buy now, every month is just incurring SGD2700 in real cost with no return, ie, helping people paying their house only.

4) If we choose to wait for property prices to drop, will only incur more monthly rental cost only..To date, already paid 7 months rental(SGD18,900)....very heart ache. Additionally, property price may not drop at all....no one will know..

While I am trying to stay positive, i.e., the drop in property price is more than I pay for total retal to date...then it will be breakeven. But the question is WHEN will be that time ?? Or will it come at all ??


Really apology for such a long story above, and thanks for your patience in reading it to this point..

Please advise what should I do now ?? dilemma....

[hyenergix]

Hi all Gurus,

I have a real headache here and it is driving me sleepless recently... Would sincerely appreciate some sound advise from all the pros here...

Background :
- I am Singaporean and is now staying in a rented HDB house, monthly rental at SGD2700, because of some past mistake make which I do not want to mention here for simplicity purpose.

- Our total savings(including all CPF) is only about SGD250K...not much actually..

- We have a family condo TOP in yr2014 meant for permanent staying, and it's monthly repayment to the developer will soon to be near SGD3000 in 7-8 months time later. Now is near one thousand only in monthly repayment.


Intention :
We would hope to buy one more condo(2 bedder - less than SGD1m) for mainly 3 reasons below.

1. Can soon(3 months later) offset the current monthly HDB rental cost of SGD2700 while waiting for the family condo to TOP in yr2014.

2. Can 'breathe' a little financially once we are require to pay the SGD3000 monthly repayment for the family condo 7-8 months later, because can then use the rental from additional purchase condo to offset the HDB rental SGD2700 liao.

3. Can use this additional condo for retirement purpose later(collecting rental) once we are able to pull it through altogether.



Dilemma :

1) Should we really buy another condo, given the current gloomy market and with such limited financial status of SGD250k ? Are we over our head, and should not think of buying at all ??

2) If buy now, the house prices are still much on the highside, comparing YTY..

3) If dont buy now, every month is just incurring SGD2700 in real cost with no return, ie, helping people paying their house only.

4) If we choose to wait for property prices to drop, will only incur more monthly rental cost only..To date, already paid 7 months rental(SGD18,900)....very heart ache. Additionally, property price may not drop at all....no one will know..

While I am trying to stay positive, i.e., the drop in property price is more than I pay for total retal to date...then it will be breakeven. But the question is WHEN will be that time ?? Or will it come at all ??


Really apology for such a long story above, and thanks for your patience in reading it to this point..

Please advise what should I do now ?? dilemma....

I will just buy an MM like Kovan Granduer that has already or going to TOP that is about $600k. Cost about the same as renting the HDB.

To all landlords - with cases like this, hope your tenants are still around when the TOP party starts end of next year...

[Petertan123]

Can our bro petertan eligible to buy a resale flat?

If yes, can consider to buy now to stay..find those cheaper ones below 400k

If not, continue to rent and wait for ur new condo

Its suicidal to commit another condo now wif just 250k.....

All da best!

May I know in this case, how much cash would be deem "sufficient"... SGD400k ? or ??

Of course, it will be the more the better.. But just wanna know what should be my guideline befoe diving in..

[Petertan123]

1. price now is peakish so should not buy.
2. see point 1
3. source for cheaper rental once current tenancy is over
4. dun forget if property prices do drop it also mean rental rates are dropping too.

so there is no dilemma. if u "chiong", to me the risk undertaken to gain that little reward or savings is not worth it.

Hi bro August,

Assuming ignoring the peakish price + zero rental for simplicity, the difference between chiong and no chiong even with no cost savings(meaning both have same cost at SGD2700 monthly), the former option still have the capital gain benefit while the latter is merely throwing money in water with no return..

Of course, I understood the reality is not that easy and always plan as thought..

So despite all calculations, I am still very uneasy overall and keeps thinking and thinking before jumping off the cliff... This is akin russian roulette..just barely making it if can manage, else sayonara..

[marktkt22]

End of the day, it how much u want....?
I Also been thro that stage,
but choose to do nothing and have peaceful nite, holiday w family
And cash reserve on hand ....

For all your calc, u might be retrench, met w accidents, hospital etc. Did u buy the mortg insurance, all other necessary life and medical insurance....
First, think of your family cos that priceless ...

Fast forward to now....i have enough to wait for ppty Correctn and get another unit...with peaceof mind

[marktkt22]

Learn many thing from this forum along the way,
My take ...and view on risk....
1. Make sure your current mortg is paid down until it can be svc by just one person cpf, even at 4% interest rate environment, in case spouses not working
2. subsequent ppty take ltv max 50%, so leeway to cut rent in bad time.
3....get the necessary insurance
4... Diversify, do other investment eg bonds, equity

[kane]

Your magic number should be 40% of the next unit plus 12-18 months of sustaining your lifestyle and mortgages. That's how much cash you should have.

[devilplate]

May I know in this case, how much cash would be deem "sufficient"... SGD400k ? or ??

Of course, it will be the more the better.. But just wanna know what should be my guideline befoe diving in..

assuming u buy a 400k HDB and take 80% loan, u oredi nid abt 100k

den the rest of 1xxk remaining for u and ur family to tide thru bad times if any

u want to haf sweet dreams every nite rite?

[Laguna]

Greed and Fear...

based on the limited info given, I try to sum up your profile.
1. very low risk tolerence level
2. very low margin for adverse situation
3. rather tight in term of cash flow
4. did not have a good longer term financial planning.

My advice :
1. take a look of your commitments, into more of a longer term, especially your children and parents/inlaw. As all these are cash outflow, cannot be avoided, and these, at times are not small monies.
2. your/your wife job security
3. the priority in your life and the stress level u can take.

Now, ur only in feasible study stage, alr caused u sleepless nites. I can't image the extent of stress u will face in the event of property downturn.

I cannot zoom into the financial planning aspect for u as very limited info is given like your household income, age, commitment etc. Without all these, nobody can give u a meaningful advice. Also, I am also confused of all the calculations here.

Ooops, U bot an unit at Minton, and eyeing for D15 condo...

if need to, PM me

[masterkey]

Many apologies for the confusion.. Please allow me to clarify again, as below :

1. If chiong :

Income :
Assuming heng can get montly SGD3500 rental income for 2nd condo = SGD3500

Cost :
Mgt fee for the 2nd condo(assuming) = SGD200
If i can change to a lower HDB rental hse soon = SGD2200(assuming)
Monthly repayment of SGD800K bank loan(assuming 1.5% for 30 yrs) for 2nd condo = SGD2700(gotten from property guru)
** Net outgoing cash = SGD1600

2. If not chiong :
Continue stay at current rented HDB hse = SGD2700(sunk cost)

Overall, I still attain 'net savings' of SGD1100 if i chiong, by paying SGD1600.....

Of course, the above are just simple calculations..

The $1100 upside can soon be evaporated by higher than assumed condo fees ($200 really on the low end), prop tax, higher interest rates, and opportunity cost of $250k cash, etc. And $1100 should be $610 really because change to lower rental is an independant option.

In my books, that razor thin returns do not justify the risks involved.

Don't chiong lah. Just move to a cheaper rental like you plan to. And re-invest your $250k cash. At a rate of return 3%, easily cover that $610.

Of course if you believe in prop price chiong next few years, it's a different story....

[phantom_opera]

The $1100 upside can soon be evaporated by higher than assumed condo fees ($200 really on the low end), prop tax, higher interest rates, and opportunity cost of $250k cash, etc. And $1100 should be $610 really because change to lower rental is an independant option.

In my books, that razor thin returns do not justify the risks involved.

Don't chiong lah. Just move to a cheaper rental like you plan to. And re-invest your $250k cash. At a rate of return 3%, easily cover that $610.

Of course if you believe in prop price chiong next few years, it's a different story....

It sounds good but how to get safe 3% return for the 250k cash?? voluntary contribution to CPF OA?

[masterkey]

It sounds good but how to get safe 3% return for the 250k cash?? voluntary contribution to CPF OA?

nothing is absolute. but can say safer than plonking down $1M commitment & leverage to get $610. No?

[Irene_kyng]

Mr Peter's 250k not all cash, but cash + cpf..

[Komo]

not enough bullet to chiong

[greenhorn]

If you feel heart pain by paying for your landlord's mortgage, why don't you buy resale OCR to move in now (or when tenancy ends) and stay so don't have to rent the hdb flat? When your family condo TOP in 2014, can move in to a bigger unit. You can then rent out the resale smaller condo unit for passive income till after 4yrs SSD and at that point in time can still decide to sell or continue to earn rental. Kills 3 birds with 1 stone - a. fulfill your desire to not pay for other's mortgage but instead pay down your own mortgage by using the hdb rental saved, b. enlarge your property portfolio and opportunity to ride the property wave (earn capital appreciation as you have said), and c. fulfill your dream of being a landlord. Try redoing the sums based on this scenario and see how it works for you...

[devilplate]

If you feel heart pain by paying for your landlord's mortgage, why don't you buy resale OCR to move in now (or when tenancy ends) and stay so don't have to rent the hdb flat? When your family condo TOP in 2014, can move in to a bigger unit. You can then rent out the resale smaller condo unit for passive income till after 4yrs SSD and at that point in time can still decide to sell or continue to earn rental. Kills 3 birds with 1 stone - a. fulfill your desire to not pay for other's mortgage but instead pay down your own mortgage by using the hdb rental saved, b. enlarge your property portfolio and opportunity to ride the property wave (earn capital appreciation as you have said), and c. fulfill your dream of being a landlord. Try redoing the sums based on this scenario and see how it works for you...

money not enuff la

250k including CPF.....only can afford MM....how to stay? LOL

[mcmlxxvi]

I started my property game with the exact same thought - why pay rent which goes out and never come back...

[DaytonaSS]

If you shift your thinking abit maybe u wont be thinking of "up-ing" your bet. this mindset is typical of gamblers on a casino table. lose few bets, then start to place bigger bets. Most of the time is KO ending. The trick here is discipline even on a gambling table.

First of all, if market chong, the opportunity cost u are incuring now, could be covered by the increase of your value in your yet to be TOP house. If possible, move back to parent's house lor and give $2k to them monthly. Better to benefit them.

2nd if market drop, u are still going to lose on present rental spending, possiblity rental income and still suffer paper lost in 2 properties yet kanna a 4 yr SSD one 1 of them.

In conclusion, dont throw big $$$ to try cover small $$$. Based on your calculation, u are only going to end up with positive few hundred to $1k net positive cash flow after cost.

Bit the bullet first, if market does drop drastically then considering moving it will be another matter altogether.

[devilplate]

I started my property game with the exact same thought - why pay rent which goes out and never come back...

tats uniquely SG lor

its cheaper to rent den to buy in Oz hor

[mcmlxxvi]

tats uniquely SG lor

its cheaper to rent den to buy in Oz hor

I thought the houses are cheap enough! Rent even cheaper??

[devilplate]

I thought the houses are cheap enough! Rent even cheaper??

my fren told me tat the interest portion u pay to the bank can be higher den rental hor....whahahhahaa

[phantom_opera]

Scary 250k CPF/cash wanting to buy D15 condo.... I can sense the ultra bullish sentiment now ... the urge to gamble is UNSTOPPABLE