Sales of private property

[irisng]

What are the expenses need to take into consideration when selling the property? Is it the following:-
1) Purchase Price
2) Stamp duty when purchasing the ppty
3) Maintenance fees
4) Property Tax
5) Insurance
6) Property Loan Interest
7) Furnitures & Fittings for the rental
8) Agents' commission to get the tenants
9) Sales Expenses - Agents' commission for the sales
10) Lawyer fee for the sales
11) Bank Loan pre repayment interest

Correct me if I'm wrong.

Or alternatively, how to calculate how much profit / loss I make when selling the property which is rented out?

[Arcachon]

Never ever did this type of calculation before.

Guess if you do it, you got no time to buy the property.

Only calculation I did is can I pay the deposit +++, 6 months of no rental income.

So far only sell my 4 room HDB in 1995 and HDB give me a cheque of 180,000 after staying for 7 years.

Did not pay agent fee also because most agent don't believe can sell at my asking price.

Valuation 195,000 asking 290,000 sold 285,000.

1988 bought for 81,300

4R Model A 04 to 06 104.00 1988 $530,000.00 Oct 2015

[Arcachon]

Lease Start Date : 01 Dec 1988
Lease Duration : 99 years
Remaining Lease : 71 years (as at date of enquiry)

1988 bought for 81,300

4R Model A 04 to 06 104.00 1988 $530,000.00 Oct 2015

[proud owner]

What are the expenses need to take into consideration when selling the property? Is it the following:-
1) Purchase Price
2) Stamp duty when purchasing the ppty
3) Maintenance fees
4) Property Tax
5) Insurance
6) Property Loan Interest
7) Furnitures & Fittings for the rental
8) Agents' commission to get the tenants
9) Sales Expenses - Agents' commission for the sales
10) Lawyer fee for the sales
11) Bank Loan pre repayment interest

Correct me if I'm wrong.

Or alternatively, how to calculate how much profit / loss I make when selling the property which is rented out?

Hi irsng,

Not all that you have listed are crucial/important...
3)maintenance is Ongoing, are you going to add them up from day 1 ?
4)Property tax is also Ongoing and fluctuates,
8)agent comm is a One off payment, how much will it affect proceeds?

most of the items are crucial when determining if your rental price will fetch a profit or loss...

When selling a property with tenancy, i would assume your rental covers :
1 maintenance charges
2 commission to secure a tenant
3 loan interest
4 property tax

take the sale price and subtract the rest of what you listed ... should be a close guide to your Profit/Loss..

if you want to go into detail, it can be quite impossible ... like utilities spent before you secure a tenant, etc etc ..



for my case, i know very well that my rent collected more than cover my expenses...

so i just take Sale price - Purchase price - sales comm - legal cost

[Citizen]

Lease Start Date : 01 Dec 1988
Lease Duration : 99 years
Remaining Lease : 71 years (as at date of enquiry)

1988 bought for 81,300

4R Model A 04 to 06 104.00 1988 $530,000.00 Oct 2015

No one deny it, but at the current price it is hard to digest unless one have to buy and stay because of all the right factors.

[Citizen]

Both my parents and parents in law made twice from public flats without even plan and calculation don't even talk about timing the market.

[Kelonguni]

I think she was motivated by Arcachon's notion that live in HDB for X number of years for "free" and can sell for XXXK higher and just want to do that calculation to be sure.

How about the intangible "gains" like the use of facilities (family usage), parking, rental saved, prestige?

Cannot include every component for calculation. Different components are added for different purposes. Do you want to calculate rental yield or absolute gain/loss? Then must include more details like pricing, years?

[irisng]

Hi irsng,

Not all that you have listed are crucial/important...
3)maintenance is Ongoing, are you going to add them up from day 1 ?
4)Property tax is also Ongoing and fluctuates,
8)agent comm is a One off payment, how much will it affect proceeds?

most of the items are crucial when determining if your rental price will fetch a profit or loss...

When selling a property with tenancy, i would assume your rental covers :
1 maintenance charges
2 commission to secure a tenant
3 loan interest
4 property tax

take the sale price and subtract the rest of what you listed ... should be a close guide to your Profit/Loss..


for my case, i know very well that my rent collected more than cover my expenses...

so i just take Sale price - Purchase price - sales comm - legal cost

I still have to add in my rental income to derive at my profit, right?

[irisng]

I think she was motivated by Arcachon's notion that live in HDB for X number of years for "free" and can sell for XXXK higher and just want to do that calculation to be sure.

How about the intangible "gains" like the use of facilities (family usage), parking, rental saved, prestige?

Cannot include every component for calculation. Different components are added for different purposes. Do you want to calculate rental yield or absolute gain/loss? Then must include more details like pricing, years?

What I think is, if you are selling away the property that you are staying, mtce fees etc etc should not be taken into consideration because you have used it but if you are selling the rental property, I think mtce fees have to take into consideration.

[Ilikeu]

What are the expenses need to take into consideration when selling the property? Is it the following:-
1) Purchase Price
2) Stamp duty when purchasing the ppty
3) Maintenance fees
4) Property Tax
5) Insurance
6) Property Loan Interest
7) Furnitures & Fittings for the rental
8) Agents' commission to get the tenants
9) Sales Expenses - Agents' commission for the sales
10) Lawyer fee for the sales
11) Bank Loan pre repayment interest

Correct me if I'm wrong.

Or alternatively, how to calculate how much profit / loss I make when selling the property which is rented out?

Example 5 years holding period

On unleveraged basis:
Year 0: Price of ppty - upfront costs (eg. stamp duty, agent commission etc)
Year 1: Rental - expenses (eg. maintenance fees etc)
Year 2: Rental - expenses (eg. maintenance fees etc)
Year 3: Rental - expenses (eg. maintenance fees etc)
Year 4: Rental - expenses (eg. maintenance fees etc)
Year 5: Rental - expenses (eg. maintenance fees etc)
End Year 5: Sale price of ppty - costs to sell (eg. agent fees etc)

Then you do an Unleveraged IRR (% yield) and NPV ($ quantum) to calculate your unleveraged returns

On leveraged basis:
Year 0: Upfront cash invested = price of ppty - loan amount - upfront costs (eg. stamp duty, agent commission etc)
Year 1: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 2: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 3: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 4: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 5: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
End Year 5: Sale price of ppty - costs to sell (eg. agent fees etc) - outstanding loan

Then you do a Leveraged IRR (% yield) and NPV ($ quantum) to calculate your leveraged returns

[Ilikeu]

There is a typo here. it should be "+" as highlighted below.

Example 5 years holding period

On unleveraged basis:
Year 0: Price of ppty + upfront costs (eg. stamp duty, agent commission etc)
Year 1: Rental - expenses (eg. maintenance fees etc)
Year 2: Rental - expenses (eg. maintenance fees etc)
Year 3: Rental - expenses (eg. maintenance fees etc)
Year 4: Rental - expenses (eg. maintenance fees etc)
Year 5: Rental - expenses (eg. maintenance fees etc)
End Year 5: Sale price of ppty - costs to sell (eg. agent fees etc)

Then you do an Unleveraged IRR (% yield) and NPV ($ quantum) to calculate your unleveraged returns

On leveraged basis:
Year 0: Upfront cash invested = price of ppty - loan amount + upfront costs (eg. stamp duty, agent commission etc)
Year 1: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 2: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 3: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 4: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
Year 5: Rental - expenses (eg. maintenance fees etc) - interest cost - principal loan repayment
End Year 5: Sale price of ppty - costs to sell (eg. agent fees etc) - outstanding loan

Then you do a Leveraged IRR (% yield) and NPV ($ quantum) to calculate your leveraged returns