When date of completion, I need to pay for 12% SSD . This round en bloc can see the difference between CCR freehold and OCR HUDC. CCR freehold normally achieved premium at least 100% with some projects achieved at least 120%( park house, tulip gardens) when those HUDC plus LH99(park west, normanton park) all around 50-60% premium over sell individually.But as I said, the entry price for CCR freehold now is too high. Based on the 1-2 % rental yield, you need to top up a lot of cash every month. If the project didn't enbloc this round, you stuck,.
4.3% rental yield is very hard to find in current market, but you also must factor in half month agent fee, property tax, property quarterly maintenance fee , lose rental income when looking for new tenants. How much left after reducing all these? I believe now the market only those LH small units can achieve this kind of rental yield. With the recent cooling measure, once you have these small units, it's very hard for you to play property game any more. These things agent won't tell you.
What Arachon mean is he bought in 2006, and he might be paying about the same or even a premium at that point of time.
Illustrating pinnacle duxton owner said their hdb was high price at point of time.
After 5-10years, they looked back and everything seem to be cheap. Comparing to present time
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Year 2006 was the low of the previous property cycle when no one wanted to buy. He was lucky (or his wisdom) to buy it during the low of the property cycle and benefited from it and thereon ride with the market. Had he bought during the next cycle high say 2011/2013, he would not be telling people the buy at anytime as long as bank is willing to lend him. He has a simplistic view of the money market probably watching to many Youtube from the US who themselves were also vested to attract more viewers to make more money for themselves.
The current market is already vastly different from that earlier on.
I think quite a number who bought in D19 has intention to stay in while they let go or rent away another place. Not many can be a landlord. Given the narrative about the area (especially Sengkang / Punggol area), I really doubt anyone would buy purely for investment in that area given the supply.
D19 is a very heterogeneous place, encompassing the more matured towns of Hougang and Kovan, the areas near Sengkang and Punggol MRT, as well as those that are further away (maybe lining the expressway).
It is not that easy to conclude.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
2016 also nobody wanted to buy. So our friend oldfreehold got himself 2 units at a bargain and all enbloc already. Dunno how to calculate his yield also, but it's definitely not just luck.
Depends on one's motive and personal situation, one buys specific types of houses.
And based on whether one executes his intended plan to completion, one can then hope to reap the desired outcome.
So far so good for me too.
The three laws of Kelonguni:
Where there is kelong, there is guni.
No kelong no guni.
More kelong = more guni.
There’s always winners and losers even in stock market.
Arachon or you giving the best advices, we do not know until 10 years later.
You maybe right now, and
Arachon maybe right 10years later. Who knows. If buyers have time horizon, able to hold, have no knowledge to invest in stocks nor forex. So why not..?
Does Arachon knows he buying cheap..?
I don’t even know I’m buying cheap in 2008 year at 342k for 797sqft condo. as I’m comparing hdb prices against the unit. I still find it expensive and lesser rooms.
I bgt it because I can pay the mortgages, and I’m young at 30. Got sufficient time frame
Let's go back to 2016 when you can buy cheap.
One property 1500sqft , cost 3M (now maybe owner will ask for 4M plus).
Monthly instalment 9300 with 3600 interests , 600 maintainence , 300 property tax ,agent fee 200 per month ,repair 100 per month. Rental merely 3800 to 4000 per month. Negative rental yield . Would you buy ? Monthly cash top up 5k plus .
If you know it's park house, would you buy ?
For those buying riverfront big units for own stay , of coz @1200psf almost EC price , personally feel not bad. But buy those small units in the nearby garden residences @1700 psf ?
First time buyer status is very very precious now. Think thrice before commit. Dun buy regret , anyhow buy , regret more in the future...
For the investors bought small units in the garden residence@ 1700 psf , you have to compete with those resale condo nearby in the future . If you are tenants looking for a place in that area, which one would you choose ? For own stay , it's a different story.
Btw I don't own park house , what I mean is holding power is very important when you focus on capital gain . Give me one more chance , I won't touch condo with negative yields again. Luck won't come every time. It's really painful to do all the repairs, handle tenant problems and yet you need to top up thousands of cash every month.
Not sure what’s the squabble all about.
I’m the case who bought in 2006 (my first property), then bought in 2007 (second property which is my current house, just sold recently), 2010/11 (third property, sold in 2014), 2012/13 (2 x D19 property, with one sold, one rental), 2017 (1 x D14 property), 2018 (1 x D15/D16 property).
In between, there’s selling for profit gain.
Well, I’m still alive and kicking.
Maybe like what some thinks, no wisdom, I’m just damn lucky.
I calculate my yield based on the amount i put in. Say the property is 1.6 mio and I pay 600k cash and borrow 1 mio. My estimated yield is (rental - interest - tax - agent fees - repair -etc) divded 600k. This is regardless if the market price of my property value goes up or down as I dont see why I should use MTM (mark to market).
This is the money i commited. Of course one needs to take into consideration the monthly mortage payment of which a potion goes to the capital repayment and the remaining goes to the interest rate. Can be done using excel but i just use an estimated yearly amount.
Question is: if the market value drops, the yield would look more attractive if we use the MTM method. But the capital i sink in is still 600k.
So for simplicity I prefer to use this method.
1.6% is the rental yield, if you deduct all the expenses, take into consideration the period between tenants, and use the current market value (not how much you put in) as the base. That means at the present time, holding properties is just slightly more sensible than putting money in bank fixed deposits. In the long run, who knows?
Let me tell you this: In the long run, your money in banks will be "inflated" away (so much so that your cash can buy much less than what you can buy today)!
Don't believe?
Water price up 30%, electricity up >6%, GST going to up 2% (and actual compounding effect will be >10%) etc - all these will work to give so much higher inflation in future!
That is the cold hard truth about this new world economics!
Financed Transactions
Calculating the ROI on financed transactions is more involved.
For example, you purchased the same $100,000 rental property as above, but instead of paying cash, you took out a mortgage.
The down payment needed for the mortgage was 20% of the purchase price or $20,000 ($100,000 sales price x 20%).
Closing costs were higher which is typical for a mortgage totaling $2,500 up front.
You paid the same amount of $9,000 for remodeling.
Your total out-of-pocket expenses wer $31,500 ($20,000 + $2,500 + $9,000).
Plus, there are ongoing costs associated with the mortgage.
Let's assume you took out a 30-year loan with a fixed 4% interest rate. On the borrowed $80,000 ($100,000 sales price minus the $20,000 down payment), the monthly principal and interest payment would be $381.93.
We’ll add the same $200 a month to cover water, taxes, and insurance, making your total monthly payment $581.93. (Note: A great tool for calculating the totals cost of a mortgage is a mortgage calculator like the one below.)
Rental income of $1,000 for a total of $12,000 for the year.
Your monthly cash flow was of $418.07 monthly ($1,000 rent - $581.93 mortgage payment).
One year later:
You earned $12,000 in total rental income for the year at $1,000 per month.
Your annual return was $5,016.84 ($418.07 x 12 months).
To calculate the property's ROI:
We divide the annual return by your original out-of-pocket expenses (the down payment of $20,000, closing costs of $2,500, and remodeling for $9,000) to determine the ROI.
ROI: $5,016.84 ÷ $31,500 = 0.159.
Your ROI is 15.9%.
To calculate the property's ROI:
We divide the annual return by your original out-of-pocket expenses (the down payment of $20,000, closing costs of $2,500, and remodeling for $9,000) to determine the ROI.
ROI: $5,016.84 ÷ $31,500 = 0.159.
Your ROI is 15.9%.[/QUOTE]
You buy a home for $100,000 and your annual gross rental yield is $12,000? This kind of home is not available for purchases in Singapore. What is available in Singapore is homes at $600,000 to yield annual rental income of $12,000. Many such homes can be had, if you are stupid enough.
Last edited by stalingrad; 12-07-18 at 04:37.