Buying a BUC for investment is not as lucrative as it sounds?

[mermaid]

Take a MM for example.
In the most optimistic scenario, a 1st time buyer (no ABSD) bought direct from developer & sell it 5 yrs later.


484sqft @ $1500psf 726,000
3% stamp duty 16,380
Conveyancing fee for purchasing 2,700
Interest forgo from the 1st 20% DP for 5 yrs 7,300
Loan interest for the remaining 80% for 2 yrs 18,000
Conveyancing fee when selling 2,700
Agent commision when selling 9,000
Totol cost (equiv $1616psf) 782,080


Rental income for 2 years 68,000
Less Maintenance fee 5,280
Less ppty tax 6,800
Net rental income 55,920



1. ($1800 - $1616) x 484 = 89,056
2. Net rental gains = 55,920
Net gain = 144,976.

Selling the MM at $1800psf ($300psf gross profit) will only earn a total profit of $145k for a period of 5 yrs.

[hopeful]

can calculate how much you have to fork out?

[indomie]

If u pay 20% deposit, that's double your investment in 5 years.

[mermaid]

can calculate how much you have to fork out?

if it is the 1st ppty, one can fork out as low as 20% + 3% stamp duty.

[indomie]

if it is the 1st ppty, one can fork out as low as 20% + 3% stamp duty.

Why not lucrative?

[star]

Take a MM for example.
In the most optimistic scenario, a 1st time buyer (no ABSD) bought direct from developer & sell it 5 yrs later.


484sqft @ $1500psf 726,000
3% stamp duty 16,380
Conveyancing fee for purchasing 2,700
Interest forgo from the 1st 20% DP for 5 yrs 7,300
Loan interest for the remaining 80% for 2 yrs 18,000
Conveyancing fee when selling 2,700
Agent commision when selling 9,000
Totol cost (equiv $1616psf) 782,080


Rental income for 2 years 68,000
Less Maintenance fee 5,280
Less ppty tax 6,800
Net rental income 55,920



1. ($1800 - $1616) x 484 = 89,056
2. Net rental gains = 55,920
Net gain = 144,976.

Selling the MM at $1800psf ($300psf gross profit) will only earn a total profit of $145k for a period of 5 yrs.

For property the longer u keep the higher the gain.
Since u stated:

Total cost is $782,080
Net rental income for two years $55920
so after two years your yield is higher $782080-$55920= $726160
your total cost after two years become $726160
Your yield will be higher if u plan to continue to rent out after two years.

If u down payment only 20% your yield is extremely high.

[mermaid]

Why not lucrative?

hmmm ... hidden cost is at least $100psf more den purchase price. to sell after 5 yrs means one nid to sell at least $200 - $300psf higher den purchase $ in order to earn a decent profit.

[hopeful]

hmmm ... hidden cost is at least $100psf more den purchase price. to sell after 5 yrs means one nid to sell at least $200 - $300psf higher den purchase $ in order to earn a decent profit.

if you keep instead of sell ?
what % you received on your initial cash outlay?

[indomie]

hmmm ... hidden cost is at least $100psf more den purchase price. to sell after 5 yrs means one nid to sell at least $200 - $300psf higher den purchase $ in order to earn a decent profit.

From a drug lord point of view, this profit is not lucrative. Yes I agree.

[VS]

Why not lucrative?

I think it is not attractive, because this is your first apartment. If you buy another unit for your own stay, that second unit will incur ABSD.
For better returns, I would rather buy a completed project.

[mermaid]

if you keep instead of sell ?
what % you received on your initial cash outlay?

like wat star had mentioned, sell later den 5 yrs so as to enjoy a higher yield.
% return on initial cash outlay depends leh.

In the worst scenario, if buy at $1500psf, sell at $1600psf, the gain is oni the rental income of $56k, ROI is 34% over 5 yrs.

[mermaid]

I think it is not attractive, because this is your first apartment. If you buy another unit for your own stay, that second unit will incur ABSD.
For better returns, I would rather buy a completed project.

yr completed proj refers to newly TOPed projects or resale of old condos?

the oni diff between a BUC & TOPed is merely the interest forgo in the 3 yrs of waiting, but one ended up paying a higher price. Is tat really worth?

[VS]

yr completed proj refers to newly TOPed projects or resale of old condos?

the oni diff between a BUC & TOPed is merely the interest forgo in the 3 yrs of waiting, but one ended up paying a higher price. Is tat really worth?

I am referring to old resale condos.

[mermaid]

I am referring to old resale condos.

too old might not be so advisable. Might be hard to sell in the future.

[wirehtc]

I think it is not attractive, because this is your first apartment. If you buy another unit for your own stay, that second unit will incur ABSD.
For better returns, I would rather buy a completed project.

True indeed. Completed project makes better sense for immediate rental return and possibly lower asking price than new launch.

[Ringo33]

After all the BIG TALK about superior Bishan and Sky Vue, and saying price of JG has already factor in ALL future potential of JLD.

Am I right to say that you are betting Sky Vue in Bishan will achieve higher capital gain and rental yield as compare to J gateway when both project TOP in about 3 to 4 years time.

Yes or No?

[hsifreffup]

After all the BIG TALK about superior Bishan and Sky Vue, and saying price of JG has already factor in ALL future potential of JLD.

Am I right to say that you are betting Sky Vue in Bishan will achieve higher capital gain and rental yield as compare to J gateway when both project TOP in about 3 to 4 years time.

Yes or No?

In the words of a Juru (Jurong "Guru"),

Focus, dont side track into small talks.

Thank you.