Drop in Private property rental

[DC33_2008]

When rental drops like that in CCR, it means recession time. Not sure if people still can afford lifestyle.

Bro, I cant answer you. There are different people with different needs.
Some go for lifestyle, some go for space.

[ikan bilis]

Dont forget you cannot interpolate by this way.
The more loan you borrow, the more interest amt you incurred.

can try calculator on propertyguru also...

http://www.propertyguru.com.sg/mortgage_calc_monthly

[Xan]

When rental drops like that in CCR, it means recession time. Not sure if people still can afford lifestyle.

Yea, you got a point.
Had a friend, earning 4.5k per month, single, not married, but he prefers to stay alone in a mm (move out from his parents, cant get along), he prefers to stay in a secured/serene environment that comes with facilities. He rented a condo instead of looking for HDB. He told me he dont need a 4HDB.
If he has wife/children, of cos his needs will be different.

[sgp_condo]

I dont know how you get that figure, but I'm paying ard $800 for my monthly installment for WT mm. Or probably I cannot use 570K for mm in WT. In actual fact, I'm paying 550K for WT after all the rebates.
But nvm, 550k or 570k to me not much diff.

$340k loan at 2.5% is $1343
$600k loan at 2.5% is $2370

You are paying $800 probably due to the construction phases?

I always use 2.5% as interest for cal will not be low forever. If interest rise, I will use addition 1% for safety net.

[Xan]

can try calculator on propertyguru also...

http://www.propertyguru.com.sg/mortgage_calc_monthly

Thanks for pointing out the exact figures.
Basically, the monthly installment is still about twice for CCR vs OCR.
That is my main point.

But if both CCR and OCR cant rent out in bad times, who is more fatal?

[DC33_2008]

During recession, the likely scenarios are:

Expatriate:
a. Retrench and go home.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

ii. Stay put but share the place with other families to reduce rent.


Locals like your friend:
a. Retrench and go back to stay with parents.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

[Xan]

$340k loan at 2.5% is $1343
$600k loan at 2.5% is $2370

You are paying $800 probably due to the construction phases?

I always use 2.5% as interest for cal will not be low forever. If interest rise, I will use addition 1% for safety net.

I think I know why I'm paying 800plus per month.
Because of those various rebates (e.g stamp duty, FV rebates etc), the bank tends to borrow me lesser.
Thats why i end up paying $800plus per month.

[Xan]

During recession, the likely scenarios are:

Expatriate:
a. Retrench and go home.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

ii. Stay put but share the place with other families to reduce rent.


Locals like your friend:
a. Retrench and go back to stay with parents.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

If I got retrenched, I will probably take option A, go back stay with parents.

[chiaberry]

I think I know why I'm paying 800plus per month.
Because of those various rebates (e.g stamp duty, FV rebates etc), the bank tends to borrow me lesser.
Thats why i end up paying $800plus per month.

Isn't it because of progressive payment if your place not yet TOPed?

[Xan]

Isn't it because of progressive payment if your place not yet TOPed?

Dont think so, because according to my bank statement, 800plus is the installment I'm paying when loan has been fully disbursed during TOP.
I'm very sure not progressive payment. coz progressive payments is even much lesser than that.

[dtrax]

Lets do some math here:
A mm in CCR, probably cost ard 9xxk to 1 mil (eg espada), after 40% payment, outstanding loan left 600K, monthly instalment 2.4k(with 30 yr tenure, 1.1% interest rate)

A mm in OCR (use WT since you mention punggol) cost ard 570k, after 40% payment, outstanding loan 340k, monthly instalment ($800 with 30 yr tenure, 1.1 interest rate)

If go by your logic, CCR mm rental slash price until 2K, then CCR MM unit owner has a deficit of: 2k(rental) - 2.4k (installment) = -$400.
and OCR mm rental slash until $800 per month. then OCR mm owner ($800 instalment -800 rental = $0, no deficit)

Please enlighten me which one more fatal in bad times.

PS: Thanks for sharing your thoughts. As you mentioned, you kenna before, I would be very interested to know which project you are vested before and which one you kenna before. I'm curious because I never kenna before and I cash out a few times from OCR with some gain. Thanks in advance for your views. Hope to learn from each other.

Skysuites CCR MM 750k, possible rental 3k, recession drop to 2.1k. After 40% down with a 35yr 60% loan. Monthly loan 1.3k @1.1% interest. Assume worse case 3% interest + condo fee, at 2.1k can breakeven [excluding other misc cost].

[Xan]

Skysuites CCR MM 750k, possible rental 3k, recession drop to 2.1k. After 40% down with a 35yr 60% loan. Monthly loan 1.3k @1.1% interest. Assume worse case 3% interest + condo fee, at 2.1k can breakeven [excluding other misc cost].

I'm not quite sure.
If you use CCR skysuites at 750k, then i can also use OCR parc rosewood mm at 398k. (about half in terms of price)

I always like to factor in some safety factor in terms of rental.
Questions I will ask myself:
1) would there be substainable rental from CCR/OCR?
2) what would happen if my unit are left vacant. (quite common in CCR as well). I still need to service my loan, much higher compared to OCR.
3) the downlpayment I need to pay when buying an CCR which probably I can buy 2 OCR.

Probably this will be my last post abt OCR vs CCR rental.
Will invite more arguements as both OCR and CCR attracts different groups of people.
Not that I dont believe in CCR, but if my pocket is deep enough one day, probably I would have tested a CCR myself. Thanks all!

[FH99]

After 1997 financial crisis and followed by 2000 dot come bubbles, the rental for Yishun 3 bed room private was 1k (yes, for the whole unit. and yes, almost the same as 4-Rm HDB rental which was also about 1k).
For MM in remote area, you simply didn't have viewers!
So the auntie I know move into her MM - for her own stay!

[dtrax]

I'm not quite sure.
If you use CCR skysuites at 750k, then i can also use OCR parc rosewood mm at 398k. (about half in terms of price)

I always like to factor in some safety factor in terms of rental.
Questions I will ask myself:
1) would there be substainable rental from CCR/OCR?
2) what would happen if my unit are left vacant. (quite common in CCR as well). I still need to service my loan, much higher compared to OCR.
3) the downlpayment I need to pay when buying an CCR which probably I can buy 2 OCR.

Probably this will be my last post abt OCR vs CCR rental.
Will invite more arguements as both OCR and CCR attracts different groups of people.
Not that I dont believe in CCR, but if my pocket is deep enough one day, probably I would have tested a CCR myself. Thanks all!

Fair enough and that is why people chiong PR like no 2moro. 400k quantum size is definitely more acceptable for the younger group. CCR sustainability is not doubt proven and imo even in worse case where people downgrade from normal studio 1rm to MM within the ccr vicinity itself in bad times. As for OCR, there are certain risk to undertake in terms of vacancy, bearing in mind both MM in different locations are still predominated by rental. It is just a matter which locations has a higher chance by being left vacant from investor point of view [assuming price is not a main factor be it 400k or 800k].

[Xan]

Fair enough and that is why people chiong PR like no 2moro. 400k quantum size is definitely more acceptable for the younger group. CCR sustainability is not doubt proven and imo even in worse case where people downgrade from normal studio 1rm to MM within the ccr vicinity itself in bad times. As for OCR, there are certain risk to undertake in terms of vacancy, bearing in mind both MM in different locations are still predominated by rental. It is just a matter which locations has a higher chance by being left vacant from investor point of view [assuming price is not a main factor be it 400k or 800k].

While some thinks CCR can slash price, my point is OCR can also slash price like there's no tomorrow, because the installment for CCR is almost twice of OCR.
Parc rosewood lagi best, 398k, with 1.1% interest, 35yrs tenure, monthly installment is only $600plus.
If you dare to slash your CCR to 2K rental to breakeven, PRW owners can also slash until $600plus to breakeven as well.
Let's see who can slash more fiercely in bad times.
I'm not surprise many will turn to rent OCR at $600 per month in bad times. Its a real deal.
Ok, enjoy yourself. bye

[dtrax]

While some thinks CCR can slash price, my point is OCR can also slash price like there's no tomorrow, because the installment for CCR is almost twice of OCR.
Parc rosewood lagi best, 398k, with 1.1% interest, 35yrs tenure, monthly installment is only $600plus.
If you dare to slash your CCR to 2K rental to breakeven, PRW owners can also slash until $600plus to breakeven as well.
Let's see who can slash more fiercely in bad times.
I'm not surprise many will turn to rent OCR at $600 per month in bad times. Its a real deal.
Ok, enjoy yourself. bye

Then HDB entire unit also exercise slashing war <$400? I think we are both thinking too much...

[carbuncle]

After 1997 financial crisis and followed by 2000 dot come bubbles, the rental for Yishun 3 bed room private was 1k (yes, for the whole unit. and yes, almost the same as 4-Rm HDB rental which was also about 1k).
For MM in remote area, you simply didn't have viewers!
So the auntie I know move into her MM - for her own stay!

Is there mm in 2000??

[teddybear]

OCR private condo say 3BRs rent out for $600+ pm? Wow! Then nobody will rent HDB flats! So moral of the story: Never keep HDB flats for rental purpose?

While some thinks CCR can slash price, my point is OCR can also slash price like there's no tomorrow, because the installment for CCR is almost twice of OCR.
Parc rosewood lagi best, 398k, with 1.1% interest, 35yrs tenure, monthly installment is only $600plus.
If you dare to slash your CCR to 2K rental to breakeven, PRW owners can also slash until $600plus to breakeven as well.
Let's see who can slash more fiercely in bad times.
I'm not surprise many will turn to rent OCR at $600 per month in bad times. Its a real deal.
Ok, enjoy yourself. bye

[kane]

600 not even enough for property tax and monthly maintenance. Lol.

[DC33_2008]

Your pts (3) may not be always true. Those who bought earlier (3 years ago) could be cheaper than what you pay for MM in WT ($psf). They can afford to wait even got no tenant or get drop rental equivalent to OCR rental.

I'm not quite sure.
If you use CCR skysuites at 750k, then i can also use OCR parc rosewood mm at 398k. (about half in terms of price)

I always like to factor in some safety factor in terms of rental.
Questions I will ask myself:
1) would there be substainable rental from CCR/OCR?
2) what would happen if my unit are left vacant. (quite common in CCR as well). I still need to service my loan, much higher compared to OCR.
3) the downlpayment I need to pay when buying an CCR which probably I can buy 2 OCR.

Probably this will be my last post abt OCR vs CCR rental.
Will invite more arguements as both OCR and CCR attracts different groups of people.
Not that I dont believe in CCR, but if my pocket is deep enough one day, probably I would have tested a CCR myself. Thanks all!

[DC33_2008]

This is exactly what I am trying to emphasis which MM in OCR with lots of HDB flats may be caught during recession.

During recession, the likely scenarios are:

Expatriate:
a. Retrench and go home.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

ii. Stay put but share the place with other families to reduce rent.


Locals like your friend:
a. Retrench and go back to stay with parents.

b. Those with jobs but with pay freeze or cut:
i. Move to a place with lower rent with either smaller place or move from private to hdb flats.

[Xan]

600 not even enough for property tax and monthly maintenance. Lol.

Haha, absolutely.
Likewise for CCR, the owners also need to factor in prop tax and maintenance, which is usually higher than OCR.

[Xan]

OCR private condo say 3BRs rent out for $600+ pm? Wow! Then nobody will rent HDB flats! So moral of the story: Never keep HDB flats for rental purpose?

We are talking abt mm in bad times with some exaggeration in price slash lah. Haha.
HDB rental still bestest lah. But not everyone of us here are eligible to buy one.

[Xan]

Your pts (3) may not be always true. Those who bought earlier (3 years ago) could be cheaper than what you pay for MM in WT ($psf). They can afford to wait even got no tenant or get drop rental equivalent to OCR rental.

Hmm, are you referring to mm in CCR/RCR 3 years ago?
Yes, I think the shore residence, waterbank mm units all around WT mm psf, say 2 to 3 years ago.
5 years ago, my 4 bedder OCR only 443 psf.
But time has changed.

[amk]

In 2009, my D10 3bd tenant invoked dipl clause and ran away. I had to lower rental from 6k to 4k. Guess what, taken by a Singaporean family very quickly. At 3-4k range, A LOT of decent families can afford to rent a large unit, and be near town.

So CCR good location units always have demand.

For OCR 1bd, when shit comes, u r going to rent 600 to workers ? U do not worry abt damage ? When rental is < 1k, the business is very grey.... What kind of ppl rent for 1k now ?

I can only say, 1bd at outskirt area is an untested market.

[Xan]

In 2009, my D10 3bd tenant invoked dipl clause and ran away. I had to lower rental from 6k to 4k. Guess what, taken by a Singaporean family very quickly. At 3-4k range, A LOT of decent families can afford to rent a large unit, and be near town.

So CCR good location units always have demand.

For OCR 1bd, when shit comes, u r going to rent 600 to workers ? U do not worry abt damage ? When rental is < 1k, the business is very grey.... What kind of ppl rent for 1k now ?

I can only say, 1bd at outskirt area is an untested market.

Haha, if you insist CCR always have sustainable rental so be it lor. Then I would not be seeing threads like "A few CCR selling at a loss" or reading news CCR units left vacant for mths etc.
I know if an OCR has convenience of transport and amenities, it won't die as well. Lower installment, lower maintenance comparatively.

[minority]

In 2009, my D10 3bd tenant invoked dipl clause and ran away. I had to lower rental from 6k to 4k. Guess what, taken by a Singaporean family very quickly. At 3-4k range, A LOT of decent families can afford to rent a large unit, and be near town.

So CCR good location units always have demand.

For OCR 1bd, when shit comes, u r going to rent 600 to workers ? U do not worry abt damage ? When rental is < 1k, the business is very grey.... What kind of ppl rent for 1k now ?

I can only say, 1bd at outskirt area is an untested market.

Yes I CCR can easily find tenant. While OCR studio have more challenges esp with the HDB ard the OCR and even ECs.

[amk]

I know if an OCR has convenience of transport and amenities, it won't die as well. Lower installment, lower maintenance comparatively.

What you say is logical, but again u also have to look at location. What industry , or business activities do you have in Punggol ? I think it's more likely to find low wage workers in boon lay , woodlands than in Punggol. And that's already assuming you can find them renting 1k from you. In 2001 a 5rm HDB near jurong east MRT only rents for 1500. At 1000, a lot of HDB big units will compete with you.
Anyway this discussion won't have any conclusion. Hard truths are not told, but learned. I wish you all the best in your investments.

[Xan]

What you say is logical, but again u also have to look at location. What industry , or business activities do you have in Punggol ? I think it's more likely to find low wage workers in boon lay , woodlands than in Punggol. And that's already assuming you can find them renting 1k from you. In 2001 a 5rm HDB near jurong east MRT only rents for 1500. At 1000, a lot of HDB big units will compete with you.
Anyway this discussion won't have any conclusion. Hard truths are not told, but learned. I wish you all the best in your investments.

What you said is not wrong either. Definitely the chances of finding rental in CCR is higher than in OCR, no doubt about it. But what I'm worried is the rental sustainability in CCR during bad times as the installment is higher, prop tax higher and also maintenance fee higher. If CCR unit goes without rental for months, I wonder how much longer I can hold.
Or is this the reason why some sell CCR at a loss for this reason? I don't know.

Why WT and not PRW for me even PRW is much cheaper? Ya, I'm betting on convenience of tpt and amendities. Price not too stressful for me and within my means, got some spare cash so try lor. Even if I'm wrong, this investment is not enough to put me into serious fanancial crisis since quantum is low and risk factor is not high either.
Yes, I might be wrong,or maybe let me learn my lesson and shall come back and share with you guys again.
Cheers.

[carbuncle]

Aiya soon expats and FT will be extinct species. Rent to those who sold their hdb to upgrade to Bedok Residences, Watertown and Sky Habitat lor! At least for next 4 to 5yrs they need a place to stay also... I wonder if property agencies will have such lists of prospects on record...