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Petertan123
30-11-11, 21:21
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.... :banghead:

Allthepies
30-11-11, 21:32
Hi I think it is not possible to buy a 2nd condo which need 40% downpayment which works out to 400k.

Petertan123
30-11-11, 21:34
I can loan from bank at 80% for some reason...

terence
30-11-11, 21:44
Wat reason bro?

sotidy
30-11-11, 21:48
Wat reason bro?

Probably the loan for the family condo is taken by either the husband or wife and thus the other person is 'freed' to take another loan.

kane
30-11-11, 21:49
I can loan from bank at 80% for some reason...

How's not the time to lever 80%.

1000g
30-11-11, 21:50
Given you can loan 80%, and throw in all the 250K inclusive of stamp duty, which means you are in a very dangerous position. Just continue to rent. Just treat it as bad planning in the beginning. Money wasted on renting now is your amulet actually.

Petertan123
30-11-11, 21:54
You are absolutely right.. The family condo is under my wife name..

I know I am in a very dangerous position if I chiong, but if not chiong also die by paying for the past costly mistake, which is real dollar and cents outgoing every month... :doh:

sotidy
30-11-11, 21:58
1. You can consider trying to rent for a cheaper HDB flat...at least not so heartache till 2014.

2. If you really want to get another condo, try to look for those slightly 'undervalue' and you must also weigh your ability to repay the mortgage loan for BOTH the condo, base on your family income (salary, stocks, business, etc). Also factor in the scenario of ZERO rental income + 1 person job loss. If you can stomach all these w/o sleepless nights....then u can consider.

3. No one will know the market movement for sure...but if you will have greater chances of success if you have holding power. Else....I think you might have more than just sleepless night.

Cheers.

sotidy
30-11-11, 22:03
You are absolutely right.. The family condo is under my wife name..

I know I am in a very dangerous position if I chiong, but if not chiong also die by paying for the past costly mistake, which is real dollar and cents outgoing every month... :doh:

:D

My opinion: Right now chiong is very dangerous especially if you do not have the ammo to ride through the ups and downs. If you don't chiong, you *will not* die...as the money can be small (2.7k x 24=64.8k) when compared to a fall/downturn.
Personally I don't think the correction (in term of PPI) will not be more than 20% so assuming the resale EC or PC u r getting now is 1200sf*750psf=900k vs a fall of 20% which means 180k, the 65k rental you are paying could be 'peanuts'.

Again, it depends on how deep your pocket is (you need to understand your finance position) but don't put ur family into unnecessary risk.

Petertan123
30-11-11, 22:06
1. You can consider trying to rent for a cheaper HDB flat...at least not so heartache till 2014.

2. If you really want to get another condo, try to look for those slightly 'undervalue' and you must also weigh your ability to repay the mortgage loan for BOTH the condo, base on your family income (salary, stocks, business, etc). Also factor in the scenario of ZERO rental income + 1 person job loss. If you can stomach all these w/o sleepless nights....then u can consider.

3. No one will know the market movement for sure...but if you will have greater chances of success if you have holding power. Else....I think you might have more than just sleepless night.

Thanks bro Sotidy,

Yes, am already sourcing for cheaper HDB to stay now....Are also looking for codos that preferably comes with tenancy with reasonable yield too.

You are abosultely right....I need to think hard again on the possibility of zero rental + one person possible out of job. This is daunting as no one knows what will happen in future.. hmm...

Tao Tia !!

jwong71
30-11-11, 22:06
otherwise buy a etc 600-700k resale condo. mortgage more manageable

Petertan123
30-11-11, 22:09
Yup, that is an option too...for a studio maybe... at least the rental can cover partial HDB rental..

sotidy
30-11-11, 22:13
1. You can consider trying to rent for a cheaper HDB flat...at least not so heartache till 2014.

2. If you really want to get another condo, try to look for those slightly 'undervalue' and you must also weigh your ability to repay the mortgage loan for BOTH the condo, base on your family income (salary, stocks, business, etc). Also factor in the scenario of ZERO rental income + 1 person job loss. If you can stomach all these w/o sleepless nights....then u can consider.

3. No one will know the market movement for sure...but if you will have greater chances of success if you have holding power. Else....I think you might have more than just sleepless night.

Thanks bro Sotidy,

Yes, am already sourcing for cheaper HDB to stay now....Are also looking for codos that preferably comes with tenancy with reasonable yield too.

You are abosultely right....I need to think hard again on the possibility of zero rental + one person possible out of job. This is daunting as no one knows what will happen in future.. hmm...

Tao Tia !!

1. To prevent making 'further mistakes', do map out the various possible scenarios.
Scenario 1: BAU
Scenario 2: Source for cheaper HDB
Scenario 3: Source for cheaper condo to stay
Scenario 4: Source for cheaper condo to buy
etc...
Factor in scenario of zero rental (so as to understand what is your holding cost for that property) + 1 person out of job (understand your ability to hold the property).
2. Understand what is the shortest possible period you and your wife can complete both the mortgage loan. The longer it is, the higher the risk.

And remember, holding power is going to determine whether you have sleepless nights/depression OR you can sleep soundly every night.

mkl22
30-11-11, 22:13
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.


am i mistaken here. you use the rental from the condo to offset the HDB rent.(people usually use the rent to offset the mortgage of the same property) then you pay mortgage on the 2 bedroom condo plus the 3k for the 2014condo. wont it be the same in the end? and if interest rates go up, it is going to be painful.

maisonjai
30-11-11, 22:19
Now already sleepless, once u commit the 2nd unit & 0 ammo lagi cannot slp if the planning didn't work out.

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

Can offset, u need to pay 2 mortgages abt 5.8k? Cutting it too thin leh :scared-3:

sotidy
30-11-11, 22:19
am i mistaken here. you use the rental from the condo to offset the HDB rent.(people usually use the rent to offset the mortgage of the same property) then you pay mortgage on the 2 bedroom condo plus the 3k for the 2014condo. wont it be the same in the end? and if interest rates go up, it is going to be painful.

Yup...this is a very valid point. And I guess the rental from the 2 bedroom condo will hardly be able to offset the 2700 rental for the HDB. Moreover, peter's cash/cpf will be 'locked' into this 2 bedroom condo with 4 year SSD! Quite a dangerous thought....unless of course peter & family can save say 200k per annum....then at least his ammo can be replenish fairly quickly

kane
30-11-11, 22:21
Now already sleepless, once u commit the 2nd unit & 0 ammo lagi cannot slp if the planning didn't work out.

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

Can offset, u need to pay 2 mortgages abt 5.8k? Cutting it too thin leh :scared-3:

yeah, and what if you can't find a tenant for one of the condos? it's a very dangerous game to play.

Petertan123
30-11-11, 22:43
am i mistaken here. you use the rental from the condo to offset the HDB rent.(people usually use the rent to offset the mortgage of the same property) then you pay mortgage on the 2 bedroom condo plus the 3k for the 2014condo. wont it be the same in the end? and if interest rates go up, it is going to be painful.

Yup, agreed this is a really serious concern...Please allow me to show you my calculations.. hopefully it is correct...

1. If chiong :
Assuming heng can get 3.5% rental yield of a SGD1m property = SGD3500
Less :
Mgt fee(assuming) = SGD200
Change to lower HDB rental = SGD2200(assuming)
Mthly repyt for SGD800K bank loan(assuming 1.5% for 30 yrs) = SGD2700
** Net outgoing cash = SGD1600

2. If not chiong :
Current outgoing cash = SGD2700(sunk cost)

Overall, I still attain net savings of SGD1100 if i chiong.....I think. Please let me know if I am wrong..

I understood that nothing are perfect, and the underlying risks are still interest rate, zero rental and loss of jobs.

hmm...have to weigh again...sighed.. cant move at all lehh...

Petertan123
30-11-11, 22:49
Now already sleepless, once u commit the 2nd unit & 0 ammo lagi cannot slp if the planning didn't work out.

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

Can offset, u need to pay 2 mortgages abt 5.8k? Cutting it too thin leh :scared-3:

Agreed, but based on my calculations(if i heng), I should be only paying ard SGD4100 for all three properties..30% less than SGD5800..

* Underlying risks aside..

sotidy
30-11-11, 22:53
Yup, agreed this is a really serious concern...Please allow me to show you my calculations.. hopefully it is correct...

1. If chiong :
Assuming heng can get 3.5% rental yield of a SGD1m property = SGD3500
Less :
Mgt fee(assuming) = SGD200
Change to lower HDB rental = SGD2200(assuming)
Mthly repyt for SGD800K bank loan(assuming 1.5% for 30 yrs) = SGD2700
** Net outgoing cash = SGD1600

2. If not chiong :
Current outgoing cash = SGD2700(sunk cost)

Overall, I still attain net savings of SGD1100 if i chiong.....I think. Please let me know if I am wrong..

I understood that nothing are perfect, and the underlying risks are still interest rate, zero rental and loss of jobs.

hmm...have to weigh again...sighed.. cant move at all lehh...

Urmm....dun really understand your calculation. I think there are probably many things you did not consider.
Don't forget if your property cannot be rented out, not only do you have to repay the mortgage loan, u will also have to pay the property tax and maintenance fee...and that will mean your monthly outgoing cash will come up to >3k+. You need to consider the full holding cost.

Also, do you have kids already and is your wife intending to work for life?

Petertan123
30-11-11, 22:54
yeah, and what if you can't find a tenant for one of the condos? it's a very dangerous game to play.

The calcualtions in worst case scenarios will be :
HDB rental - SGD2700
Mthly pyt for first condo - SGD3000
Mthly pyt for 2nd codo - SGD2700
** Net outgoing cash is SGD8400
yup, on very thin ice... die liaoo...:scared-1:

Depends on how many months can i tahan without tenant..

august
30-11-11, 22:55
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 ??



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.

kane
30-11-11, 22:56
few things:

$1m property, maintenance usually about $250-$300.
secondly, where is the sum for property tax and income tax?
thirdly, $3,500 is monthly rental, what about agent fees for securing say a 2 year rental?
fourth, expenses to bring the property to a tenantable state
five, instalments for the initial period when you've taken over the property and you're looking for a tenant.

it all stacks up, so be very very careful.

cl0ver
30-11-11, 22:57
calculations are never accurate... so many hidden costs..
stamp duty, property tax, maintenance fee.
do you have kids? then later you will have to pay child care, maid service, extra curriculum activities, healthcare, escalating insurance premiums etc.

250k just put in high yield dividend stocks paying 7% and you will be better off.

you didnt mentioned what is your combined income? if you take in 250k p.a. then still got chance, but market next year is going to be tough.....

kane
30-11-11, 22:57
haha, lots of seasoned bullish gurus with a lot of good level-headed advice.

sotidy
30-11-11, 22:57
The calcualtions in worst case scenarios will be :
HDB rental - SGD2700
Mthly pyt for first condo - SGD3000
Mthly pyt for 2nd codo - SGD2700
** Net outgoing cash is SGD8400
yup, on very thin ice... die liaoo...:scared-1:

Depends on how many months can i tahan without tenant..

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

Petertan123
30-11-11, 23:01
Urmm....dun really understand your calculation. I think there are probably many things you did not consider.
Don't forget if your property cannot be rented out, not only do you have to repay the mortgage loan, u will also have to pay the property tax and maintenance fee...and that will mean your monthly outgoing cash will come up to >3k+. You need to consider the full holding cost.

Also, do you have kids already and is your wife intending to work for life?

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..

kane
30-11-11, 23:03
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..


relook at your potential cost figures, i've pointed out some missing items.

cl0ver
30-11-11, 23:07
better dont chiong.
enjoy a peaceful life with your wife, take her on holidays so she wont nag at you on financials! lol

since you are vested, if prices goes up, your property appreciates, but if prices fall, then you can re-negotiate your HDB rent.
there are many opportunities to grow your wealth but plunging into property now after already being vested is a BADDDDDDD IDEA!

sotidy
30-11-11, 23:07
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
30-11-11, 23:09
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... :scared-3:

Petertan123
30-11-11, 23:12
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
30-11-11, 23:13
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
30-11-11, 23:18
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
30-11-11, 23:46
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
01-12-11, 00:43
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
01-12-11, 01:18
Your limited cash will not ride through a storm, if it really come.....
This is akin to playing Russian roulette

Douk
01-12-11, 04:55
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.... :banghead:

hyenergix
01-12-11, 05:33
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.... :banghead:

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
01-12-11, 06:34
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
01-12-11, 06:44
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
01-12-11, 07:25
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
01-12-11, 07:41
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
01-12-11, 07:45
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
01-12-11, 08:22
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
01-12-11, 08:32
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
01-12-11, 09:27
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
01-12-11, 09:31
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? :hell-hath-no-fury:

masterkey
01-12-11, 09:40
It sounds good but how to get safe 3% return for the 250k cash?? voluntary contribution to CPF OA? :hell-hath-no-fury:

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

Irene_kyng
01-12-11, 09:59
Mr Peter's 250k not all cash, but cash + cpf..

Komo
01-12-11, 10:04
not enough bullet to chiong:(

greenhorn
01-12-11, 10:16
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
01-12-11, 10:29
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
01-12-11, 10:31
I started my property game with the exact same thought - why pay rent which goes out and never come back...

DaytonaSS
01-12-11, 10:33
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
01-12-11, 10:37
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
01-12-11, 10:42
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
01-12-11, 10:45
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
01-12-11, 10:46
Scary 250k CPF/cash wanting to buy D15 condo.... I can sense the ultra bullish sentiment now ... the urge to gamble is UNSTOPPABLE

jwong71
01-12-11, 10:52
Scary 250k CPF/cash wanting to buy D15 condo.... I can sense the ultra bullish sentiment now ... the urge to gamble is UNSTOPPABLE


all in, double or nothing :D

wilander
01-12-11, 10:52
Gambler's mentality. :doh:

solsys
01-12-11, 11:22
Why are you renting such an expensive HDB flat? There are cheaper ones out there.

You made a costly mistake in the beginning, why even contemplate to make another potential costly one right now.

And if you really have to buy why D15? upside is already limited in that district already.

cl0ver
01-12-11, 13:04
probably started this thread in the wrong section

hyenergix
01-12-11, 13:22
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....

Got book writers here? :confused:

moneymatters
01-12-11, 13:22
Why are you renting such an expensive HDB flat? There are cheaper ones out there.

You made a costly mistake in the beginning, why even contemplate to make another potential costly one right now.

And if you really have to buy why D15? upside is already limited in that district already.
sound advice.

Let just add my 2 cts worth....I don't really see how much money you can save on your existing HDB lease by jumping onto another resale condo purchase when your new apartment/condo is going to be TOP in 7 months. Assuming you find a suitable resale condo next week, you still need 8-12 weeks before completion depending on whether your seller has any timing constraints. You are definitely taking huge risk by betting that you can get a tenant for your to-be-TOP condo with the right rental when you obtain vacant possession. Seasoned landlords in this forum will tell you that rental for newly TOP units usually sucks during the 1st cycle because of sheer number of units coming onto the market all at about the same time. Unless of course, your project is a very small one with a few units.

shauntanzs
01-12-11, 13:55
I really admire your courage. From your story, I sense you are not trying to save the few hundreds. You are hoping to make thousands from your 2nd investment unit on best case basis. I think u can only afford to win n cannot lose. Assume u are in casino now, do u bet ur last $20 or do u use it to take a cab home? If I am ur family members, I will be very very worried. I rather u have sleepless night than ur whole family have sleepless night.

phantom_opera
01-12-11, 14:05
With your gambling spirit, Marina Bays Sands will like give you VIP card dude :cheers5:

amk
01-12-11, 14:35
aiyo dun rub ppl lah... he already admitted he made a mistake renting... so let's help him genuinely....

2700 * 24 2ys only abt 65k. buy 1M pty stamp duty already close to 30k. Some more after that you will be naked.

to me there is no question. stay put, and try to negotiate a lower rent, if u feel heart pain seeing 2700 going out "just like that".

maybe to make u feel better, at least u sold ur HDB and bought a condo (albeit not yet ready) at the same time so you are much better off than some one who BASICally sold and rent and wait. This is your primary residence. Not an investment pty. You just did an upgrade from HDB to condo. Subtract the 65k from ur HDB profit and look at it as a whole.

hopeful
01-12-11, 15:38
- 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.


I think something wrong with your calculation.
now 1k per month
7-8 months later, 3k.

assuming, 1% rate now, tenure 35 years,
to pay 1k per month, 350k has been disbursed.
to pay 3k per month, 1million has been disbursed.

TOP in 2014 or earliest should be 2013? .
so currently project should be at the foundation stage, 10% disbursed.
7-8 months time, additional 20%, ceiling of unit done,
which will bring the amount disbursed from 350k to approximate 1million, hence your monthly installment goes up from 1k to 3k per month.

so my guesstimate is you buy a condo around 3milllion :beats-me-man::beats-me-man::beats-me-man:

perhaps some forumers can correct my assumptions.

Petertan123
01-12-11, 21:02
To all Gurus,

To be honest, I am a bit overwhelmed by all the kind responses within just one day, and thanks so much for taking the time to look into my case.

I sincerely accept all feedbacks from the gurus, as it helps me to fill in whatsoever gaps which I may have never put into my equation before, i.e., future family committments, risks, etc. These are all very good advises.

I think I have enough inputs for me now to thoroughly think through the whole matter again. With it, I would like to rest my case/thread now.

To all others bros/sis who may have the same problems as I do(hopefully not), I hope you would learn something from my story in this thread.

To all other bro/sis who may have other forms of "headaches"(hopefully not too), I would sincerely recommend you to post your question here as the people here are really nice people and they will genuinely try to help, if possible.

It is always better to ask, than jumping off the cliff and regret later on a possible mistake.

Once again, salute to all the gurus here.. and thanks so much for your valuable advise and time....