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Thread: Advice needed.

  1. #1
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    Default Advice needed.

    Hi, seeking some advice here as I'm looking to buy a property for own stay n renting out some of the rooms, probably buying year end. I have around 200k cash on hand, and around 15k emergency cash lock up with endowment. CPf already used up for first property (LH) n looking to pay up end of the year or by next year using CPf plus around 30k cash. I'm able to generate 2.2k to 2.4k per month (conservative calculation). Question is, benefit of buying resale or new project? Lh or FH? 3 or 2bdrm? Looking forward to hear some useful advice here. Thanks.

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    Quote Originally Posted by Estella83
    Hi, seeking some advice here as I'm looking to buy a property for own stay n renting out some of the rooms, probably buying year end. I have around 200k cash on hand, and around 15k emergency cash lock up with endowment. CPf already used up for first property (LH) n looking to pay up end of the year or by next year using CPf plus around 30k cash. I'm able to generate 2.2k to 2.4k per month (conservative calculation). Question is, benefit of buying resale or new project? Lh or FH? 3 or 2bdrm? Looking forward to hear some useful advice here. Thanks.
    Your first property will be fully paid? What's your household income?

  3. #3
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    Yes. First apartment will be fully paid, aiming this year or next year. Salary very low, quite embrassing to reveal. Haha. But 700k loan shouldn't be an issue as I do not have any existing loan other than mortgage.

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    Quote Originally Posted by Estella83
    Yes. First apartment will be fully paid, aiming this year or next year. Salary very low, quite embrassing to reveal. Haha. But 700k loan shouldn't be an issue as I do not have any existing loan other than mortgage.
    I cannot advise you as I am no expert. I am just curious, how much did you pay for your 1st apartment? How old is the apartment now? Care to share more?

  5. #5
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    Lol. That's not the point here.

  6. #6
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    assuming your current apartment is hdb...your next property should go for FH condo/landed

    but the property price right now is too sky high..

    short-term wise, i will build up bullets(money) first and wait for a correction...then enter to get a good bargain later on...

    and do note that interest rate will be increase by the time correction step in..

    so, make sure you have do sufficient homework when taking loan

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    Good Friday so try to do more good deeds and kaypo a bit here teeheehee....

    Given your situation, if I were you I would first buy myself a nice dinner to congratulate on fully paying off first house (when that happens). But after that I will not make any move.

    I would build up my reserves able to last me at least 6 months of expenses. Are you sure 15k is enough for you? Esp it is locked up somewhere... and not so liquid.

    Once that is achieved, then by then market should have corrected bit more, can look for good yielding property to generate the desired income. Your expected income of 2.5k can be easily generated with good location MM around 600-700k. For larger units, if budget is tight you need to go for older projects with proven yield and clientele segment. Look at it purely from investment standpoint and don't let your personal preferences or prejudices cloud the judgement. *last point very important and not easy to achieve*

    I'm curious though, with super low income, how do you get a 700k bank loan? You seem confident about it... care to share the secret? Spouse working in bank? You Ex Director of bank? Major shareholder? Wat...?

  8. #8
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    No lah, it's not. Under my name only. Am just afraid of any cooling measure coming again n whether market will correct it's a question mark still.

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    Quote Originally Posted by Estella83
    No lah, it's not. Under my name only. Am just afraid of any cooling measure coming again n whether market will correct it's a question mark still.
    Market is confirm coming down. All info points to that. It HAS TO happen. Definitely before the next GE. Else many heads will roll and we have bigger problems of political instability to worry about other than property... by then our mind will not be thinking about property any more.

  10. #10
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    Quote Originally Posted by Estella83
    No lah, it's not. Under my name only. Am just afraid of any cooling measure coming again n whether market will correct it's a question mark still.
    mr tharman said wait a little bit...so if u believe him..then wait...maybe end this year maybe next....

  11. #11
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    But if suddenly for strange reason maybe kena lightning strike Sky Habitat launch 1200psf I suggest you no need to think faster grab....... LOL!!!!!!!!

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    Quote Originally Posted by carbuncle
    Good Friday so try to do more good deeds and kaypo a bit here teeheehee....

    Given your situation, if I were you I would first buy myself a nice dinner to congratulate on fully paying off first house (when that happens). But after that I will not make any move.

    I would build up my reserves able to last me at least 6 months of expenses. Are you sure 15k is enough for you? Esp it is locked up somewhere... and not so liquid.

    Once that is achieved, then by then market should have corrected bit more, can look for good yielding property to generate the desired income. Your expected income of 2.5k can be easily generated with good location MM around 600-700k. For larger units, if budget is tight you need to go for older projects with proven yield and clientele segment. Look at it purely from investment standpoint and don't let your personal preferences or prejudices cloud the judgement. *last point very important and not easy to achieve*

    I'm curious though, with super low income, how do you get a 700k bank loan? You seem confident about it... care to share the secret? Spouse working in bank? You Ex Director of bank? Major shareholder? Wat...?
    My one month expenditure is around 2k to 2.5k including insurance, bills, nice dinner, shopping etc. As for the 15k is fairly liquid as i can just storm down to the insurance complany n they have to pay me in 30 days. As for salary, my expectation for low can be your high, n your expectation for high can be my low.

  13. #13
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    Quote Originally Posted by Estella83
    My one month expenditure is around 2k to 2.5k including insurance, bills, nice dinner, shopping etc. As for the 15k is fairly liquid as i can just storm down to the insurance complany n they have to pay me in 30 days. As for salary, my expectation for low can be your high, n your expectation for high can be my low.
    It will be good if you can share your rough figure for your income. If you hide here and there, any form of advices, opinions and suggestions are invalid.

  14. #14
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    Based on the info, I am sceptical you can afford it. You need to do your sum properly. You have a very tight finances after buying. Usually, emergency fund is about 8-10 mths of your pay. All the best

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    Commission 100k plus. so? Some banks don't take commission into consideration. Why do I want to take the risk of facing a lower mortgage approved amount? I already said I'm looking to take 700 k loan n passive income of min 2k plus per month. What does it have to do whether or not to reveal my income Since I already know that loan of 700k is not an issue? Rental income earned will be up to 70% added to the monthly income.

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    Quote Originally Posted by cheerful
    Based on the info, I am sceptical you can afford it. You need to do your sum properly. You have a very tight finances after buying. Usually, emergency fund is about 8-10 mths of your pay. All the best
    Thanks. I also think that I can't afford afford a property.

  17. #17
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    Sounds like you are a property agent who just struck a big deal.

    Repeat what you did 10x then no need to care about bank loan liao... pay in full ca$h......

  18. #18
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    No lah. Working in bank. But, that's not the point.

  19. #19
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    Quote Originally Posted by Estella83
    No lah. Working in bank. But, that's not the point.
    Yep. Just make sure you comfortable with your reserves, settled liao then think of hunting ....... like that the hunt also more shiok haha

  20. #20
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    Gonna play devil's advocate a bit... no risk no gain... if always wait for reserve to stock up before entering the market becoz fearful of uncertainties, then only the rich who's earning $30k/mth can buy properties lor... use $10k save $20k. Can buy within 1 year. Rather, its more about proper planning and timing your entry well.

    You have $200k reserve. Not sure how much you have left for your current mortgage loan. You must decide if you want to finish payment of your current house or to pay 40% downpayment for next house. If you have outstanding $60k loan, it'll be wiser to pay up before committing to new house coz you will then qualify for 80% LTV unless your outstanding loan is > 20% of new house.

    Scenario A: Pay up current mortgage loan...

    1. After paying up your current loan, your cpf is crippled. You cannot use cpf for 2nd or subsequent house loan unless you have at least $67 500 in your ordinary and special account combined. Therefore, you must ensure that you have sufficient funds before you can use your cpf for monthly servicing of loan. This figure changes yearly.

    2. After paying up your current loan, you probably only have $150k cash or less (assuming you clear up your cpf ordinary account). You probably can only look at less than new launches @ $650k quantum. (20% of $650k = $130k). And you have v little left ($20k) for stamp duty and renovation. Extremely tight! This price of $650k can at best get you a 2 bedder in OCR (nothing bigger). If you are looking for FH, its probably a small studio with some cash to spare.

    3. No rental income yet coz you are waiting for your new launch to be ready. So you cannot tap on extra cash. Its only cash out cash out cash out. Not sure if your family can support that for now.

    Scenario B: Don't pay up current mortgage loan...

    1. Use your cpf to continue servicing your current mortgage loan so no concern there. Just rent your current unit out and start getting rental income. If you buy new launch, then rental income starts after TOP of new launch. If you buy resale, rental income starts almost immediately.

    2. Available cash of $200k allows you to only get MM units (studio) of $450k (coz you are paying 40% downpayment with spare cash for reno and stamp duty). (40% of $450k = $180K)Currently very very few studio resale or new launch cost $450k or less. Then use your $20k + $15K spare for stamp duty plus reno.

    3. Even if you qualify for $700k loan, its useless. If $700k is 60% LTV, then you will need some $450k as downpayment (40% LTV). The govt has basically raised the requirements to enter the property market.

    Scenario C: Wait and see...

    1. Wait and see what happens in 2013 and beyond until prices fall to reasonable level for you to enter the market.

    2. Take your $200k cash and make a short term investment (just in case market suddenly takes a sharp plunge and you have no ammunition). While waiting for market to undergo correction, you can stock up even more!

    Summing up, senario B is highly unlikely simply because of the 40% LTV. You have to decide the urgency of moving vs waiting as well as your risk appetite. Only you can answer the question. This is not an expert talking... just sharing my 2 cents worth with my limited understanding of your situation.... All the best!
    Last edited by ysyap; 06-04-12 at 15:24.

  21. #21
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    Sigh. Yes, my passive income is 30k pa only. But my annual income is slightly more than 150k pa. 200k is what I have now, excluding what I will be earning now till I purchase my 2nd unit, unless I were to lose my job. Max cash use to pay first unit dp is 30k, including legal fees for this year only. If next year, I don't even have to touch any cash.

  22. #22
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    based on what you are saying seems like you are staying alone in your current house or with spouse. i am assuming here that your parents, in law are not staying with you and you have ard 2 years before expecting any children.

    The only reason why i am suggesting this is because your first property installment is almost fully paid up.

    what you can look to do now is get a resale MM, move out and stay there with your wife. rent out your first property for additional cash flow supply.

    that way you can secure another asset (although small unit) and at the same time take conservative amount of risk (which can be managed by your savings, monthly pay as well as the additional income from 1st property rental).

    your downside risk is a general risk if global economy turns bad (which will hit everyone), and if you are unable to tenant out your 1st property.

  23. #23
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    Single, no bf. U got any recommendation? Lol. Maybe u give me another 5 years to settle down? have already moved back home. First property can lelong out for cheap rental, that's y i said min 2.2k but not 3.5k. I am not making any losses at all.

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    Quote Originally Posted by Estella83
    Single, no bf. U got any recommendation? Lol. Maybe u give me another 5 years to
    settle down?
    have already moved back home. First property can lelong out for cheap rental,
    that's y i said min 2.2k but not 3.5k. I am not making any losses at all.
    Quote Originally Posted by Estella83
    Yes. First apartment will be fully paid, aiming this year or next year. Salary very low, quite embrassing to reveal. Haha. But 700k loan shouldn't be an issue as I do not have any existing loan other than mortgage.
    Quote Originally Posted by Estella83
    Sigh. Yes, my passive income is 30k pa only. But my annual income is slightly more than 150k pa. 200k is what I have now, excluding what I will be earning now till I purchase my 2nd unit, unless I were to lose my job. Max cash use to pay first unit dp is 30k, including legal fees for this year only. If next year, I don't even have to touch any cash.
    You are single and you call this income embarrassing?

  25. #25
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    Quote Originally Posted by buttercarp
    You are single and you call this income embarrassing?
    I do not take commission into consideration. N salary is subjective. Anyway, I planned at a very young age.

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    Quote Originally Posted by Estella83
    I do not take commission into consideration.
    OMG..... means you earn more!

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    Anyway, this thread is not to discuss on my pay.

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    Quote Originally Posted by Estella83
    Anyway, this thread is not to discuss on my pay.
    If I am still single, I will buaya you and have an easier time then.

    I work in bank back end operation but my annual is way behind you.

  29. #29
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    Quote Originally Posted by Estella83
    Single, no bf. U got any recommendation? Lol. Maybe u give me another 5 years to settle down? have already moved back home. First property can lelong out for cheap rental, that's y i said min 2.2k but not 3.5k. I am not making any losses at all.
    must die die and buy now meh?
    the price for property is so hot

    Quote Originally Posted by yowetan
    If I am still single, I will buaya you and have an easier time then.

    I work in bank back end operation but my annual is way behind you.
    me just 1 yr older than ts & still single also .. got chance

  30. #30
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    Quote Originally Posted by roly8
    must die die and buy now meh?
    the price for property is so hot



    me just 1 yr older than ts & still single also .. got chance
    must plan earlier mah, must really wait till property crash then do research meh? Aiyo.... Don't anyhow guess my age lah. 83 can means 8th march

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