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Thread: What a property investor shouldn't do in today's market condition.

  1. #1
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    Default What a property investor shouldn't do in today's market condition.

    This thread is dedicated to opinions of what a property investor shouldn't do in today's market condition. That is, under a situation where CMs 1-7 remain imposed, plus the TDSR add-on.

    (Every poster is entitled to his opinion, and everyone is freed to debate the merit of his opinion.)

    I would start with an obvious, but I am certain that there are others who disagree with it.

    Scenario:

    A person has a live-in dwelling (HDB, condo, landed etc, it doesn't matter which type) with an outstanding mortgage. He/she also has substantial savings sitting in the bank earning miserable interests. The savings is suffcient for the initial sum required to invest in a new launch.

    Don't:

    Deploy the savings to buy the new launch just because it is earning close to nothing.

    When you choose to deploy to invest in a new launch, the ABSD of 7% plus BSD of 3% would effectively apply a haircut to the savings.

    In other words, in deploying, the savings get a substantial haircut before the investment property could start to generate a return.

    Cheers!

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    I agree with you, honorable Secretariat!
    I will, in this case, make a lump sum payment to my mortgage loan.

  3. #3
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    Quote Originally Posted by Secretariat
    This thread is dedicated to opinions of what a property investor shouldn't do in today's market condition. That is, under a situation where CMs 1-7 remain imposed, plus the TDSR add-on.

    (Every poster is entitled to his opinion, and everyone is freed to debate the merit of his opinion.)

    I would start with an obvious, but I am certain that there are others who disagree with it.

    Scenario:

    A person has a live-in dwelling (HDB, condo, landed etc, it doesn't matter which type) with an outstanding mortgage. He/she also has substantial savings sitting in the bank earning miserable interests. The savings is suffcient for the initial sum required to invest in a new launch.

    Don't:

    Deploy the savings to buy the new launch just because it is earning close to nothing.

    When you choose to deploy to invest in a new launch, the ABSD of 7% plus BSD of 3% would effectively apply a haircut to the savings.

    In other words, in deploying, the savings get a substantial haircut before the investment property could start to generate a return.

    Cheers!
    Bro, it's the SSD that's a problem....

    I see the problem as this :

    With the money, where to invest???? Stocks, us or Singapore or china, or Europe???? Bonds??? Unit trust???


    The problem is they don't know where to go because they may not understand or done enough homework.... Or even don't know where to begin...

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    Quote Originally Posted by princess_morbucks
    I agree with you, honorable Secretariat!
    I will, in this case, make a lump sum payment to my mortgage loan.
    Why u agree and make lump sum payment??? I cannot find the connection.... Real question. No hidden agenda...

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    The idea is to allow inflation to erode savers' savings while e banks n other big financial institutions r protected from any potential bubble.

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    Quote Originally Posted by Secretariat

    "....buy the new launch just because it is earning close to nothing. .."

    When you choose to deploy to invest in a new launch, the ABSD of 7% plus BSD of 3% would effectively apply a haircut to the savings.
    Agree. Only for people who is desperately looking for a shelter now, then too bad, they don’t have much choice now, their other option is to rent.

    SG seems revert housing matters going back to basic, doing quite well in fact, restricting all average income earners to own one property only.
    Last edited by walkthetiger; 21-07-13 at 11:21.

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    Quote Originally Posted by chestnut
    Why u agree and make lump sum payment??? I cannot find the connection.... Real question. No hidden agenda...
    I agree with secretariat not to buy a new launch.

    So I'd rather use my savings to make lump sum payment to my present mortgage loan, rather than leave it in the bank.

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    Now?
    Quote Originally Posted by princess_morbucks
    I agree with secretariat not to buy a new launch.

    So I'd rather use my savings to make lump sum payment to my present mortgage loan, rather than leave it in the bank.

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    Actually, I want to know, right now, what a "property investor" SHOULD do

    In conventional sense, with such low leverage and high tax, there is virtually no reason to invest in property at all. Especially the 50% LTV, what is the point of playing this pty game with such low gearing ?

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    Quote Originally Posted by princess_morbucks
    I agree with secretariat not to buy a new launch.

    So I'd rather use my savings to make lump sum payment to my present mortgage loan, rather than leave it in the bank.
    Sis, first part understand....

    2nd part is a big NO-NO....

    1. When interest rate goes up, there are still instruments that can beat mortgage interest.
    2. Many people I know paid up for their first unit and when opportunity came, were unable to buy their second properties because "not enough money for downpayment".
    3. some I knew paid up for their first home and could only afford the downpayment for the second home... So when I advised them to buy another unit, which I did, they said "cannot leh, no more money".

    But if u really don't know how to beat the mortgage interest rate, please just pay up your mortgage and ignore me.... Cheers



    Just woke up from my nap and felt like tcss...

  11. #11
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    Quote Originally Posted by DC33_2008
    Now?
    Yes.
    Why leave it in bank?
    Might as well reduce the existing loan.

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    Quote Originally Posted by amk
    Actually, I want to know, right now, what a "property investor" SHOULD do

    In conventional sense, with such low leverage and high tax, there is virtually no reason to invest in property at all. Especially the 50% LTV, what is the point of playing this pty game with such low gearing ?
    The "property investor" should just remove the word "property" and call himself "investor" and be open to all forms of investment. Hahahaha

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    sometimes i wonder whether resale and subsale would be more desired in today's climate where you want the rental to provide for a better TDSR score.

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    Quote Originally Posted by chestnut
    Sis, first part understand....

    2nd part is a big NO-NO....

    1. When interest rate goes up, there are still instruments that can beat mortgage interest.
    2. Many people I know paid up for their first unit and when opportunity came, were unable to buy their second properties because "not enough money for downpayment".
    3. some I knew paid up for their first home and could only afford the downpayment for the second home... So when I advised them to buy another unit, which I did, they said "cannot leh, no more money".

    But if u really don't know how to beat the mortgage interest rate, please just pay up your mortgage and ignore me.... Cheers



    Just woke up from my nap and felt like tcss...
    Thanks chestnut koko.
    You are talking from a savy property investor point of view.
    I am just saying that I will make a lumpsum payment, in response to secretariat's post.
    That's what I will do.

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    Quote Originally Posted by princess_morbucks
    Thanks chestnut koko.
    You are talking from a savy property investor point of view.
    I am just saying that I will make a lumpsum payment, in response to secretariat's post.
    That's what I will do.
    Sis, knowledge will move you towards Being a savvy investor. I have humble beginnings and learnt the along the way....

    Cash is really important and must be kept as an investment asset.... Don't be afraid of inflation biting into your cash.... Remember, you have other assets (stocks, bonds, rental, etc...) generating income... Leave some cash to catch cheap sale...

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    My view And option as follow...

    1. Keep your ammo or.
    2 . If for own stay...buy ...if possible get a bigger HDB, you will appreciate the space and it looks great after a good renovation or an EC.
    3. Die die must invest....buy resale with tenant or ready to rent out At a good location

    The above not apply to HNWI with ship load of ammo and holding power. You can buy all you want

    Just my humble opinion
    What ia a good house?
    It is a good house as long as you love it

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    Quote Originally Posted by princess_morbucks
    Thanks chestnut koko.
    You are talking from a savy property investor point of view.
    I am just saying that I will make a lumpsum payment, in response to secretariat's post.
    That's what I will do.
    Sis ... I guess u belong to those who value the feeling of achieving financial freedom or independence without any outstanding loans... After all our stomach is only big enough to contain that much food... To each his own

  18. #18
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    Bro secretariat, here comes my honest view :

    Property market has lost its acceleration power.... The booster has been used quite a lot of times Liao until finished.....

    The days of big gains are over..... Every investment instrument has its cycle.... Cheers

  19. #19
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    Quote Originally Posted by Secretariat
    This thread is dedicated to opinions of what a property investor shouldn't do in today's market condition. That is, under a situation where CMs 1-7 remain imposed, plus the TDSR add-on.

    (Every poster is entitled to his opinion, and everyone is freed to debate the merit of his opinion.)

    I would start with an obvious, but I am certain that there are others who disagree with it.

    Scenario:

    A person has a live-in dwelling (HDB, condo, landed etc, it doesn't matter which type) with an outstanding mortgage. He/she also has substantial savings sitting in the bank earning miserable interests. The savings is suffcient for the initial sum required to invest in a new launch.

    Don't:

    Deploy the savings to buy the new launch just because it is earning close to nothing.

    When you choose to deploy to invest in a new launch, the ABSD of 7% plus BSD of 3% would effectively apply a haircut to the savings.

    In other words, in deploying, the savings get a substantial haircut before the investment property could start to generate a return.

    Cheers!
    Wow, that is correct. Why didn't I think of the ABSD of 10% haircut ( for my case should be around 10%+3%=13% or more!!) ! I just cashout last year on 2 properties after the 5th CM and was thinking of using it to deploy in the current cooling market condition to reinvest in a bigger unit again.

    That would totally wiped out my gains !

    THANKS A MILLION, GOOD BROTHER !!

    How dumb can I get? HENG ARRRRRRRH for this forum !


    Your handsome brother,
    Lion King
    Blackjack21trader's 2014 Celestial Prediction: Year of The Crazy Horses. ( Coming This Fall ) www.sglion.com

    "Not just one horse, but the whole bloody herd of crazy horses ! "- The Illuminati

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    Quote Originally Posted by chestnut
    Bro secretariat, here comes my honest view :

    Property market has lost its acceleration power.... The booster has been used quite a lot of times Liao until finished.....

    The days of big gains are over..... Every investment instrument has its cycle.... Cheers
    The famous chart used by Ringo is showing the lost of acceleration power indeed.

    Any other scenario illustrating what a property investor shouldnt do today?

    Cheers!

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    A property investors should not hope that the good old times will come back, and the good old formula of investing in big quantum CCR will work unless if yu have reason to believe that CMs will be remove soon.

    instead of being greedy thinking about big capital gain with big units one should start looking at multiple small quantum units with good rental potential regardless if its freehold or leasehold, ocr rcr ccr,new launch or resale because with SSD you will still be tied down for 3 to 4 years and quantum is a big factor in today's cooling environment.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    Quote Originally Posted by Secretariat
    The famous chart used by Ringo is showing the lost of acceleration power indeed.

    Any other scenario illustrating what a property investor shouldnt do today?

    Cheers!
    I dunno about the chart used by brother Ringo is of any good use frankly do not be anger hor. But, I have always viewed the ABSD as an additional costs of acquiring my new purchase. However, what you said in the previous post reminded me that this ABSD is actually eating away my realised gains !! Oh Thank You for your reminder again......

    ( To be continued)
    Blackjack21trader's 2014 Celestial Prediction: Year of The Crazy Horses. ( Coming This Fall ) www.sglion.com

    "Not just one horse, but the whole bloody herd of crazy horses ! "- The Illuminati

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    Quote Originally Posted by 狮子王
    I dunno about the chart used by brother Ringo is of any good use frankly do not be anger hor. But, I have always viewed the ABSD as an additional costs of acquiring my new purchase. However, what you said in the previous post reminded me that this ABSD is actually eating away my realised gains !! Oh Thank You for your reminder again......

    ( To be continued)
    That is why, if I expanded my portfolio thinking that the market is now a good entry point, I am actually taking additional risk and eroding my investment position, am I correct or not to say that? Pretty sisters here need reply.......

    (To be continued )
    Blackjack21trader's 2014 Celestial Prediction: Year of The Crazy Horses. ( Coming This Fall ) www.sglion.com

    "Not just one horse, but the whole bloody herd of crazy horses ! "- The Illuminati

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    Frankly, I do not use chart. But I use my "feel"... you know, what sister princess said is correct. My realised cash should be used to hedge now against interest rate increase by repaying the loans instead of inflation. Not saying that interest will definitely shoot up, but just in case if you know what I mean.....

    Still very handsome Uncle,
    Leo Cheng
    Blackjack21trader's 2014 Celestial Prediction: Year of The Crazy Horses. ( Coming This Fall ) www.sglion.com

    "Not just one horse, but the whole bloody herd of crazy horses ! "- The Illuminati

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    This discussion thread is definitely much more meaningful and interesting to read compared with some other no substance threads in this forum that are filled with petty issues and personal attacks.

    Thanks to secretariat, our handsome illuminated bro and respectable chestnut mentor for the contributions

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    Quote Originally Posted by 狮子王
    That is why, if I expanded my portfolio thinking that the market is now a good entry point, I am actually taking additional risk and eroding my investment position, am I correct or not to say that? Pretty sisters here need reply.......

    (To be continued )

    You have a very good point Illuminated one
    What ia a good house?
    It is a good house as long as you love it

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    Quote Originally Posted by princess_morbucks
    Thanks chestnut koko.
    You are talking from a savy property investor point of view.
    I am just saying that I will make a lumpsum payment, in response to secretariat's post.
    That's what I will do.
    In my 2-cents opinion, Princess is correct to do so, Chestnut is also correct in what he is saying.

    It is just a different way of deploying the savings. No one is getting into more debts.

    Also, an approach could be depending on how you look at a mortgage payment. To me, even for the house I am staying in, I look at the mortgage payment as a rental payment anyway because one doesn't own a house until the housing loan is fully paid for. In other words, the financing bank owns the house until one makes the last mortgage payment and redeems the title.

    So, I have no problem whatsoever buying or renting. When the direction of property prices is going up, buy so that when you sell, you get the mortgage payments (= rental payments, in my case) back.

    Cheers!

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    Quote Originally Posted by Good house
    You have a very good point Illuminated one
    Wahhhh..Thanks leh.......I very handsome hor....

    Since we are at it. Brothers-in-the-knows know that I am now working on my 2014 Celestial Prediction. Many layman, when they read my "prediction", they all laugh at me, not knowing how I form such prediction. Actually, it is a very simple research method I used. I look at countries GDPs, banker's behaviors, government policies, forex movement, stock market, fund flows and then finally I will draw upon a conclusion of the general direction of that particular year. However, I have to encode the data and talk in a siao lang manner. Not saying that I am 100% accurate, but now I am looking at analysts behaviors and right now, no final conclusion but I can share with you guys what I think at this stage:

    Interest rates may move up ( not 100% confident that it will, but Moody's was so confident in her recent reports on Singapore banks that I suspect the chances of increase is high ). From my previous experience before the existence of Internet, I know Singapore property market at that time can tolerate up to 8% of the increase.

    However, that was before all the QE printing that only the very rich can invest in property. Now the situation is a bit different and warrant further study. So, market at current should be able to tolerate well up to 4%...that is just my thinking at this stage. No conclusion yet so stay tuned !

    Good Luck!




    神龙股侠
    NIL SINE LABORE !
    Blackjack21trader's 2014 Celestial Prediction: Year of The Crazy Horses. ( Coming This Fall ) www.sglion.com

    "Not just one horse, but the whole bloody herd of crazy horses ! "- The Illuminati

  29. #29
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    Brudder, if the individual is able to find investment instrument whereby he can get hire return rates compared with bank mortgage interest rate, he should utilize it.

    If the individual is not savvy enough, I strongly suggest paying up the housing loan.

    If the individual is already happy with his investment, he does not need to hold cash Liao...

    If the individual wants to take advantage of future possible cheap sale, the individual needs to hold cash....

    So, at the end, it is about what u want now and in the future that will determine the deployment of your cash....



    Quote Originally Posted by Secretariat
    In my 2-cents opinion, Princess is correct to do so, Chestnut is also correct in what he is saying.

    It is just a different way of deploying the savings. No one is getting into more debts.

    Also, an approach could be depending on how you look at a mortgage payment. To me, even for the house I am staying in, I look at the mortgage payment as a rental payment anyway because one doesn't own a house until the housing loan is fully paid for. In other words, the financing bank owns the house until one makes the last mortgage payment and redeems the title.

    So, I have no problem whatsoever buying or renting. When the direction of property prices is going up, buy so that when you sell, you get the mortgage payments (= rental payments, in my case) back.

    Cheers!

  30. #30
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    Paying of the loan.... U cannot get tax deduction liao.

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