Yes, I'm totally agreed with you. Once the interest rises, those who loaned big amount with 30yrs loan period will have high risk
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But It still possible to have 3~5% rental yield as passive income if you can loan lesser and try to discharge it as fast as possible so the interest incurred will be minimized and lesser risk in case interest raise sky high. But again it still depends on individual capacity la
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We invested properties since 2000..Yr 2005, I bought my 2nd 580K 3 bedders pc at West for own stay with 60% loan and discharged it after lock in period on 2008 due to the high interest rate(3.25~3.5%, If i remember correctly). Yr 2009, I rent out this pc and bought a 4rm HDB for own stay so that I can increase my passive income from 1 to 2 unit
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Currently, I have 2 pc fully paid, 1 pc still servicing 60% loan and all are currently rent to corporate professional engineer n manager with the rental fee of 2.8~4K. The 3rd one is using the rental fee to service the loan so not much passive income after the deduction of all cost incurred.
Here is my 2nd PC passive income tabulation and it's still pretty attractive now,
Fully paid included interest after 5 yrs - S$580000 +20000(est) = S$600000.
Assume rental fee at lower S$3600x12=43200 (currently 3.8K)
Agent fee S$1926 includes 7% GST for 1 year
Property Tax S$4320
Condo maintenance fee S$300x12=S$3600
Rental maintenance fee S$300~S$500
Gross rental yield (43200-1926-4320-500-3600)/600000=32854/600000= 5.48%
Monthly gross rental return S$32854/12= S$2738
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