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Good evening buyer,

In regards to your first option, there's a chance you might not be able to breakeven with the monthly rental in current rental market. But you should look it this way that tenant is paying for majority of your monthly mortgage. In the long run, basically it's someone paying for your house.

Do take note for this option, you have to pay additional buyer's stamp duty of 7%. You have to set aside half of cpf minimum sum of $80.5k in CPF OA+ SA before you can use the excess for this purchase.

Then do let my banker to advise you on your approval in principle so you can gauge how much loan you can obtain.

Btw to decouple, one of you must have enough funds to pay the other party for the amount of CPF OA funds you had paid. May I know how much finances do you have for the downpayment and to decouple?

If you don't want to be so financially burdened, second option might be better. You cash out from HDB and purchase a spacious EC. But do take note that you might have to pay resale levy for some projects. If you decide to purchase under construction projects with balance units, you stand to save up $40k for a 4rm flat for instance.

Btw new EC are generally 10-20% cheaper than condos in surrounding areas. You can also take it as a stepping stone in getting private property in future.

Hope my sharing is beneficial to your property purchase.

May I know how can I continue to value add in your property purchase?

Warmest Regards,
YT TAN 陈永达 | ACCA Graduate, RES
Vice President (Agency)
R043025D
Property Avenue Pte Ltd
Estate Agent no. L3010650D
Blk 420 North Bridge Road #03-30 North Bridge Centre S188727

(M): +65 9111 5171 
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(W): www.yttan.com Read More

Hi,

Just my humble 2 cents. The first option to use rental to cover all the property holding, financing and maintenance costs is not impossible but chances are you need to have a much lower entry price and probably would be getting an older 99 leasehold condo with little capital appreciation potential, if any. Further, overall rents seem likely to weaken further and interest rates are gradually adjusting higher. Won't really recommend this option unless you are looking to move into a newer condo for stay and rent out hdb instead.

Will recommend the EC option as like you mentioned, the entry costs is already 20-30% lower than comparable private condo. The only downsides are locations are mainly in the outer core region/suburban outskirts area, and have to sell away HDB, if you are not particular this option looks better. Which EC are you considering? Please note there will be resale levy for some of the current ECs on the market. There are also eligibility criteria such as 14k income ceiling etc.

May I have more details so to make better recommendations? Thanks and hope to discuss further and value-add to your plans.

Warm Regards,
Ivan Ng ERA ASAP
(ASk Anything Property)
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Hi,

Re: Our Preferred Experienced SG Professional

Will not possible with the interest rate raising and rental dropping for your next private condo purchase.

For upgrader, will recommend you opt for EC with rebate. It more practical as it common practice for all upgraders. Only SC enjoy such benefits for EC.

Call us now, we can explore further in detail.

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Evening,

Should you opt for the first option, you will need to know how much loan you are eligible for, how much ready fundings you have in hand and what sizing unit and location are you eligible for, based on your requirement. With this, you will know how much you need to prepare for monthly maintenance cost of the condo and how much is the estimated rental market. This will then reduce your risk.
However, if due to lack of funding, then you will have no better option than to go for the latter. With this option, you can only work on possible capital appreciation, instead of passive income. Whichever option you opt for, it's best to have the figures and objective in mind.

Do contact me further should you require my assistance.

Regards
Mike Lim
 96929209 
m52i@yahoo.com
ERA Read More

Dear sir/madam,

I think you have presented a tough proposition for consideration. It seems the outright choice is actually option 2, give that unhealthy rental market which is unlikely sufficient to cover your monthly mortgage, meaning you are required top up, however, if we look at long term, perhaps option 2 could give you better returns since you will still be owning 2 properties with 1 being rented out and should market picks up in the mid term, you can perhaps look at better liquidation prospects or ride on a good rental market, which option 2 does not allow since you will need to sit out for a period of 5 years MOP effectively locking out yourself from any opportunities that arises.

If I were in your position, assuming that I have a relatively stable income moving forward and do not mind topping up the rental for monthhly mortgage, I will still proceed for option 1 since I will have 2 properties to plan my future instead of 1. That said, I have to strongly stress that it will be a position where I do no over leverage myself financially. The safest option will still be option 2, but as the saying goes, higher risk is usually associated with better returns.

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Hi Sir,

In my opinion, it is better to consider option B, upgrade to an EC. This is my rationale for the recommendation:

1. It may be financial stretching for you to purchase a condo in view of the prices today and the additional buyer stamp duty for the 2nd property. We are having an oversupply of condos in the next few years and in tune with the rising interest rates and gloomy economic outlook, there is downside pressure on the condo prices and rental rates. It is unlikely that you will be able to cover the mortgage rates and other payments with the condo rental alone. This may not be the best time to get a 2nd property for investment in my humble opinion.

2. You should always upgrade if its within your financial mean. Historically, most if not all EC owners make money when they sell as the ECs are purchased at a lower PSF price as compared to a private condo. 5 years down the road, you will be able to enjoy another windfall when you sell off your EC while enjoying a upgrade in lifestyle. There are a lot of EC choices in the market recently with some just TOP or are going to TOP.

I have just assisted my client to upgrade from a HDB to an EC. Please feel free to contact me at 9644 4854  so that I can understand your needs and provide you with further recommendations.

Regards,
Nick Tan
(M) +65 9644 4854 
B.Eng(Chemical)(Hons)(NUS)
Cert-in-REA
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