View Full Version : Buying a BUC for investment is not as lucrative as it sounds?
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.
can calculate how much you have to fork out?
If u pay 20% deposit, that's double your investment in 5 years.
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.
if it is the 1st ppty, one can fork out as low as 20% + 3% stamp duty.
Why not lucrative?
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.
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.
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?
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.
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.
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.
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?
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.
I am referring to old resale condos.
too old might not be so advisable. Might be hard to sell in the future.
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.
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
07-10-13, 17:06
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.
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