Invest in property
May 6th, 2007
When you have some savings, say $100k or more, it’s time to consider growing your money.
One time-tested investment strategy in land-limited Singapore is to invest in property.
Short story:
Shop around for a good condo. Rent it out. When it appreciates in value, sell out.
Long story:
How to identify a good condo? Location is important. Generally, districts 10, 9 and 11 are good, in that order. Expats like these districts.
Freehold and 999-year leasehold properties are good for the long term, as the government has announced not to release land with such tenure in future. 99-year leasehold properties are ok too, if your focus is on rental returns.
How much rental can your apartment fetch? The Straits Times has reported recently that an apartment in a good location can fetch up to 3.5 times its floor area in square feet. So, if your apartment has a floor area of 1,000 sq ft, you can expect to rent it out at roughly $3,500 per month.
Do you need to take a mortgage? Generally, even high net worth individuals take mortgages for leverage purposes. The rule of thumb is that your net rental income must at least cover your interest payments, provided that the property value do not depreciate in value. In other words, your net rental income minus your interest payments, plus the appreciated value of your property, will be your paper profit. When you sell out, the profit will be realized (after various deductions).
Note that you can’t use CPF for your investment property due to a new CPF regulation.
Also, as mentioned in a previous post, the best time to invest in property is during a property slump. You should know that we are now experiencing a property boom in Singapore.
Market crash in 2009: Clemen | Salary.sg - Your Salary in Singapore Says:
May 10th, 2007 at 1:39 pm
[...] take it to mean that we should buy property in or near central Singapore, at the right [...]
Checklist for buying property | Salary.sg - Your Salary in Singapore Says:
May 13th, 2007 at 3:45 pm
[...] There’s an informative article on buying property in the financial adviser column in today’s Sunday Times. I’ll summarize and add my own bits. (Please also refer to my previous post on investing in property.) [...]
Rental boom | Salary.sg - Your Salary in Singapore Says:
May 13th, 2007 at 4:17 pm
[...] is fetching a monthly rental of $4,300 or about $5.10 per square foot. Compare this to the “3.5 times” formula cited a my previous post. However, I calculated the average per-square-foot rental for all the [...]
Multiple mortgages | Salary.sg - Your Salary in Singapore Says:
May 17th, 2007 at 1:27 pm
[...] properties or more? If the answer is not already obvious to you, most of these people are trying to invest in property – they stay in one, rent out the other(s), and sell when the prices go up [...]
Check property prices | Salary.sg - Your Salary in Singapore Says:
May 25th, 2007 at 3:00 am
[...] you are going to invest in property or just to buy one to live in, you gotta research on the recently transacted property prices. This [...]
Property Investors Club Says:
January 5th, 2011 at 8:28 pm
All these comparisons are useless.
Truly the best way to invest in property is with the experts and professionals.
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