Newbie
Many have invested in Shoe box apartments, with the mind set that these apartment are cheap, and have high yield and demand from foreign ex pats.
However, it is warned that its not wise to invest in these apartments just yet, as there would be an increase in supply of such apartment drastically within a short time span.
Your views?
Here is the article
Senior
haha, we started a thread on the same article at almost the same time!
moderator can help us merge the threads?
those who can't access the article in the link can read it below:
http://forums.condosingapore.com/showthread.php?t=13447
Originally Posted by FilthyRich
Newbie
LOL apparently i posted it first.
Senior
yeah, when i checked it, it was 1 minute ago. so within 1 minute of each other, otherwise, would have seen urs and just put the article here.
Newbie
How many people here bought a MM shoebox?
What is your current experience in rental?
Junior
I think a lot have not TOPed yet. The rental market is not tested under extreme (oversupply) conditions. I think the rental expectations of MM units will not be as good as was thought esp in those areas with high concentrations of MMs.
Newbie
That is my thought too.
Maybe investors know this but think that they can get out before all the others cause price collapse in either rental or resale.
I just can't get my head around an apartment that is 1/5th the size of where I live.
for 400 sq ft is only enough for 1 person. How much should rental be? Where is the market to support these units. Is any of this data available as I would be interested to see effect of the coming flood.
Senior
i know of a couple in their 40s who are not highly educated. they have a fully paid flat and a combined income of 6k+ in total at the moment. half a year ago, they bought a 2 bedder of 6xx sq ft (while the unit itself does not meet the definition of < 500 sq ft MM, the project itself is, with many 1 bedders < 500 sq ft) for just under $1m (14xxpsf).
they took up a loan of almost 800k and the project has not started building yet. they are not aware of the market price in the area, nor very sure what the floor plan represents (the unit comes complete with the big balconies and a/c ledges and the classic small 2nd bedroom).
they are not greedy pple but just wanted something where they can put their money in which "supposedly" would grow over time. it was more of ignorance and agent "friend" sweet talk which spurred them to buy. i seriously doubt they will be cash flow positive when the project TOPs.
Junior
I hope this is not the general profile of MM buyers ....
I hope the MM buyers are more like some active members here, who are just aggressive risk takers. At least for them, if market turns, it's no one's fault, and they are ready for it.
Senior
precisely. but i m afraid the truth is not so. there will be many like the couple i mentioned who would have bought far east's soho concept if they didn't buy an MM i am sure. they are more likely to be ignorant than savvy.
the couple asked me to check out the price of the project for them as they heard developer had cut price. they will feel hurt if i tell them the truth is they are already sitting on a 100k paper loss. since they know price is cut, i guess i just tell them, not much lah, 14xx become 13xx.
Newbie
A lot of singles are also buying for their own stay... i suppose.
With many residents remaining single (or choosing to marry really late), 1 man 1 woman would have bought 2 units in total. Then they get to know each other in the 40s, they bought 1 bigger unit to stay together. That means they will have total 3 units. This may be fueling the demand.
tweet @condoexchange
have many MM since 6 yrs ago. never had problem finding tenants or buyers. lowest was rented out 2k and smallest was 360sf. biggest was 500sf and highest rent was 2.3K. Lowest maintenance was $150 and highest was about $220.
I can surely afford one big lux apt but why should i keep all my eggs in one basket.
Last edited by carbuncle; 19-04-12 at 16:06.
Junior
tell them the hard truth, otherwise they will never learn.precisely. but i m afraid the truth is not so. there will be many like the couple i mentioned who would have bought far east's soho concept if they didn't buy an MM i am sure. they are more likely to be ignorant than savvy.
the couple asked me to check out the price of the project for them as they heard developer had cut price. they will feel hurt if i tell them the truth is they are already sitting on a 100k paper loss. since they know price is cut, i guess i just tell them, not much lah, 14xx become 13xx.
Junior
Refer to the Community Service thread for MM units, it has many valuable advise. In terms of rental and cap appreciation, it can be on par or even beat non-MM, it is just that which development you choose
Senior
err, i think they are already indebted for the rest of their working life so.......nothing much to learn except heartache if i tell them the truth.
Junior
a lot to learn.. never listen to sweet-talks from an agent..
it makes a lot different for one to learn from its experience,or others experience
Newbie
With limited land and an increase in population there will be a niche for MMs either for stay or investment. For investment, the rents will be down when supplies of MMs go up. For long term, it really depends on the development and location. This is when the long standing contentious issue of MM in CCR vs OCR surfaces again. HK and JAPAN have shown that MMs have a market in city centers and so MMs in CCR or city fringes are likely to ride the good and bad times out. Most wont need to have super holding power to keep these.
Junior
it is not that, a lot of people think that they are smarter than the average joe. even the bottom 50% has a tendency to think that they are smarter than the rest of the populationa lot to learn.. never listen to sweet-talks from an agent..
it makes a lot different for one to learn from its experience,or others experience
tweet @condoexchange
What will happen to MM in East Coast? Geylang? Joo Chiat? Kovan? West Coast? Woodlands? Paya Lebar? Sembawang? Punggol? Bt Panjang?
Junior
The investor who was interviewed mentioned liao, I sold off East Coast MM coz too crowded. I chiong in Bukit Panjang coz no MM there yet, I first mover so I WIN!
Newbie
hmm i think parc rosewood owners more arrogant sure can find tennants and rent 2.6k no sweat
Affordable means small
tweet @condoexchange
I think she really WINNER with this kinda mentality...
Newbie
i bought 560 sqft unit in Kembagan area for self stay. Freehold at 670k. Was looking at resale flats in Boon Keng and Kallang area, but i dont really feel good paying that kind of money for leasehold HDB (crap COV). Im getting in age, i cant spend time waiting for BTO lottery forever. So decided that i can sacrifice space for a smaller freehold condo. I find it pointless to buy a 600k 4 room HDB and ended up having 2 empty rooms for no purpose. These are just my personal justification. Not trying to say that smaller apartments are good choices. If i have the dough i will settle for at least 700-800 sqft 2 bedders. For the time being im happy with my purchase. My household income is 10k btw.
Senior
petir road? i think she bot forest kill residences.
and why is her rental yield so low for her MM in east coast, 2.5%?!
Junior
petir road? i think she bot forest kill residences.
and why is her rental yield so low for her MM in east coast, 2.5%?!
From her feed:
http://leonalo.wordpress.com/
Why they anyhow quote me this ST? I said Petir Road, not Bukit Panjang. Bukit Panjang will soon be saturated with shoeboxes too tsk.
Senior
yah wat, petir road is forestkill lor. eh, not very far from bukit panjang wat?! bukit panjang better rite? nearer to mrt than forestkill.
Newbie
MMs in proven OCR places will probably survive in down times by reducing rents. As many have said here, some places like Geylang will have a pool of potential tenants bec they are close to town. MMs in Sembawang, Punggol etc, nobody knows. But looking at today's ST report where there is an exponential huge supply of MMs coming up in OCR, and if most are investors, its any one's guess where the tenants will come from, and how many potential tenants actually live and work in these areas. It is also anyone's guess how many MMs can be absorbed in Singapore at one time as there is no historic data as we move into unchartered waters.
Banned
Anything that is new, small and trendy, you will be able to find buyer. However when it is small, old and worst LH, then you should be prepared to cut loss.
Perennial
I bought a MM FH along braddell road for <500k - own stay. I can't spend time waiting till I'm 35 to buy an OLD HDB flat. By then the price of an old flat would be minimum 500k after adding in basic renovation cost. I have lived in a small apartment before and I already felt there was too much to clean! If I don't buy, I will still have to pay rent using cash. If I buy, I use CPF to pay and keep my cash
Resale HDB are usually VERY OLD
1 year after full reno, have to fork out more money to maintain
If the problem is from outside your apartment but leaks into your flat, it's very difficult to convince Town Council to fix it. The problem gets worse while pestering them to fix it. At the end of the day, it's in your flat so it's your own problem!
And then there are noisy neighbours and functions at the void deck with amplifiers turned up to the max.
Newbie
I would like to link you all to these two apartments, from the D11 region.
Shoe-box apartment
Normal apartment
As we can see the monthly rental of the shoe-box apartment is $4200/$8.50psf which constitutes to about$140 a day! Not including utility bills. Top up a little and probably you could even stay in a more budget hotel with home keeping services.
Comparatively, a normal apartment has a monthly rental of about $5000/$4.20psf which is significantly lower.
Which is the reason why many choose to invest in these shoebox apartment which generates such high yields.
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