Advice Needed

[xtink]

i need some advices from you gurus out there and would like to see your comments:

I am currently living in a 5 rm HDB. I have made a calculation and estimated if i sell away my current flat, i would be able to pocket abt 180k in cash profit (after deducting cpf accrued interest, comm, etc).

However, if i sell my HDB flat, i would need a place to stay in. Alternate sites like my parents or in-laws are absolutely out.

On the other hand, my objective of selling my current flat is to cash out of the mkt and waits for the pvt propoerty downturn and then enters the mkt, probably much what other people would be doing likewise.

So i'm in a dilemna as to what i should do with the following options:
1. downgrade to a smaller hdb 3-room flat that cost abt 230k-250k (there's only me and my wife, and we are prepared to live in a smaller flat), awaits for bloodshed on the pvt property and then with the extra cash in hand, enters the mkt. Continue to live in the hdb and then hope to rent out the pvt unit in 1-2 yrs time when the development is completed; i.e. investment focus

2. rent a hdb flat and waits for the time and then buy a pvt property and move into in; i.e. upgrade in livestyle

which options would be more viable? i'm more skewed towards the 1st option (for investment), but the worry would be would there be rental demand in 2-3 yrs time? and also, if i buy another smaller hdb now, i would be also buying high while i sell high, but i reckon the fall in pvt prices would def be > fall in hdb prices (even by the same %, hdb def as a smaller decrease in absolute $ terms due to lower price)

another question would be - how much cash and/or cpf does one needs to enter the pvt mkt? i know there's no more DPS scheme, but developers/agents are now coming up with the so-called Interest Absroption-Scheme which works almost like the DPS, i.e. 20% within 8 weeks and the remaining upon TOP.

Anyone can share their views or good advise?

[gfoo]

if you haven't set aside 2 years expenses and can pay at least 30% of the private property in cash/cpf, you can't really afford pte property at this juncture.

if you really want to get pte property, bite the bullet and stay with your parents/in-laws first, wait a year or two, then get.

[jwong71]

i need some advices from you gurus out there and would like to see your comments:

I am currently living in a 5 rm HDB. I have made a calculation and estimated if i sell away my current flat, i would be able to pocket abt 180k in cash profit (after deducting cpf accrued interest, comm, etc).

However, if i sell my HDB flat, i would need a place to stay in. Alternate sites like my parents or in-laws are absolutely out.

On the other hand, my objective of selling my current flat is to cash out of the mkt and waits for the pvt propoerty downturn and then enters the mkt, probably much what other people would be doing likewise.

So i'm in a dilemna as to what i should do with the following options:
1. downgrade to a smaller hdb 3-room flat that cost abt 230k-250k (there's only me and my wife, and we are prepared to live in a smaller flat), awaits for bloodshed on the pvt property and then with the extra cash in hand, enters the mkt. Continue to live in the hdb and then hope to rent out the pvt unit in 1-2 yrs time when the development is completed; i.e. investment focus

2. rent a hdb flat and waits for the time and then buy a pvt property and move into in; i.e. upgrade in livestyle

which options would be more viable? i'm more skewed towards the 1st option (for investment), but the worry would be would there be rental demand in 2-3 yrs time? and also, if i buy another smaller hdb now, i would be also buying high while i sell high, but i reckon the fall in pvt prices would def be > fall in hdb prices (even by the same %, hdb def as a smaller decrease in absolute $ terms due to lower price)

another question would be - how much cash and/or cpf does one needs to enter the pvt mkt? i know there's no more DPS scheme, but developers/agents are now coming up with the so-called Interest Absroption-Scheme which works almost like the DPS, i.e. 20% within 8 weeks and the remaining upon TOP.

Anyone can share their views or good advise?

my view is most experiats be back home, takes yrs market stable and to recover and have them back to rent ur place. plus unless is a good location,and way below market rate rental.. if not, 2-3yrs there going be alot property upz for rental. and how stable is ur job from now til 3yrs down.. unless ur company is local chinese, as most ang moh company affected badly. those badly burnt are those tot of renting out to cover their mortagage loan.
*correct me if im wrong,thks

[isaaclim]

How do you calculate your 180k profit?

If this is a real profit, not just the cash you can obtain from selling your HDB flat, i will immediate "shack" it off even the real profit is only at 150k. Now, 5 rm HDB is almost death unless you sell below valuation.

Downgrading is not an option now. Why? Because 3-4 rm is in high demand now. Everyone is thinking about downgrading. So if you buy 3-4 rm now, then "GOOD LUCK! - you are buying HDB at history HIGH!"

Is renting an option? That would depend on how much rental you have to pay until you move in to a new unit vs.
the price drop of your existing unit for this period.

Hope you can find some way out from this!

[xtink]

the 180k is real cash profit. (selling price - outstanding loan amt from hdb - cpf used for payment - accrued interest in cpf)

what you mean by 'shack' it off?

yes, the better alternative would be to rent say for a period of abt 6 months. assuming a rental of $1.5k/mth for extended 1 year ==> 18k, then within this period look for a good buy. I would reckon it the fall in prices of pvt within this 1 yr would allow me to recover >18k.

How do you calculate your 180k profit?

If this is a real profit, not just the cash you can obtain from selling your HDB flat, i will immediate "shack" it off even the real profit is only at 150k. Now, 5 rm HDB is almost death unless you sell below valuation.

Downgrading is not an option now. Why? Because 3-4 rm is in high demand now. Everyone is thinking about downgrading. So if you buy 3-4 rm now, then "GOOD LUCK! - you are buying HDB at history HIGH!"

Is renting an option? That would depend on how much rental you have to pay until you move in to a new unit vs.
the price drop of your existing unit for this period.

Hope you can find some way out from this!

[isaaclim]

the 180k is real cash profit. (selling price - outstanding loan amt from hdb - cpf used for payment - accrued interest in cpf)

what you mean by 'shack' it off?

yes, the better alternative would be to rent say for a period of abt 6 months. assuming a rental of $1.5k/mth for extended 1 year ==> 18k, then within this period look for a good buy. I would reckon it the fall in prices of pvt within this 1 yr would allow me to recover >18k.

Oh. I would only call this as cash balance. Not profit.
Profit = Selling price - buying price * "a factor".

I was trying to say if you can get 180k profit, you better dump that unit fast.

[Sean.G]

I suggest renting a place for the time being. With such a quiet rental market, you can even rent a 2-3 bdrm condo for 1.5K-2K a month. Then when prices fall till some point in Dec or Jan 2010 buy for own stay.

You should see profits in two to three years after you re-sell. I don't think you should become a landlord cos there are too many risks involved at this point of time.

[xtink]

i have another question. if u have fully paid up ur current hdb flat, do you still need to set aside the minimum sum in your cpf if you intend to use ur cpf to service the monthly installment of a another new pvt property?

[jazz_wish]

Hi xtink,

Personally, I would think the market would only get worst but when is the best time to buy is anyone's guess.. (duh..) but I would engage a 3 month window to evaluate my options on whether to go in to a pte property which I've already short listed or KIV for another 3 more months...

I would cash in on my HDB now if I were you.. cos I really think its already at a high.. I would only think that in about 9 months (my own guess-timation), HDB prices may also follow market trend and start sliding...

By the way, who did you check your 'accrued interest in cpf' with? I think you can get real cash profit of the mentioned amount if you have serviced maj of your loan or paid up already your current loan....

the 180k is real cash profit. (selling price - outstanding loan amt from hdb - cpf used for payment - accrued interest in cpf)

what you mean by 'shack' it off?

yes, the better alternative would be to rent say for a period of abt 6 months. assuming a rental of $1.5k/mth for extended 1 year ==> 18k, then within this period look for a good buy. I would reckon it the fall in prices of pvt within this 1 yr would allow me to recover >18k.

[jurgen]

Sell your HDB now. Thats the smartest thing(for seller) to do since prices are at historic high. Rent out some place...you could even rent in some condo that you want to buy in future. Allows you to check if you are happy with that development. Buy in second half of the year. Prices should be close to bottom then.