You Can Make Losses in Real Estate By Buying “Good” Properties
Freehold condos near MRT stations are supposedly the best! But how many buyers have actually tested this assumption and studied the price trends of such properties? Have you checked how much faster have prices of freehold condos increased compared to leasehold condos? Can you afford to make a wrong multi-million purchase based on unverified assumptions? What if you can use factual data to help you with your real estate decisions at no additional cost?
About Me
Hi, I am William Chen, an Associate Marketing Director with PropNex. Prior to joining Real Estate, I was a senior banker for over 10 years in a few international banks, covering regional corporate customers in Asiapacific. My previous role required extensive analysis and coordination across countries amongst internal and external stakeholders to meet my client’s requirements.
How is that relevant to you?
Today’s real estate market is governed by many more regulations and cooling measures than it used to be. Financial calculations for purchase and sale becomes much more complicated because of rules and regulations from various government bodies such as MAS, HDB and CPF. Even if you try to read up all the rules yourself, it is not easy to connect the dots. What are the kind of mistakes that some people make in real estate?
Case Study 1 – 99/1
One of my friends did her own research on the internet and proceeded to purchase a private property with her hubby based on 99/1 manner of holding. This was with the intention to decouple easily in the future while reducing the amount of stamp duty she has to pay at the point of decoupling.
Weeks after her purchase, she told me about it and I pointed out that this would be problematic. Although her hubby would only need to buy over 1% of her share in future (worth around only $10,000), he would have to cough out a lot of cash to refund the amount of CPF-OA she utilised (around $100,000) upon decoupling.
Unfortunately, this manner of 99/1 has backfired because it just made it harder for her to decouple in future because it won’t be easy to fork out the $100k cash for decoupling and have sufficient additional cash as downpayment of her next property.
Case Study 2 – EC purchase
A couple waited 4 months for the launch of Piermont Grand, an Executive Condominium located in Punggol. They have a decent combined income of $10k, and aspired to purchase a 3 bedroom unit with the size of around 900sqft. The quantum was around $1m which seemed pretty affordable at around $1,100psf.
Did you know that based on $10k combined income, the max mortgage loan that you are eligible for an EC purchase is only around $670k? This couple didn’t know… until we had a chat when Piermont Grand launched for sale. Plus, they owned a 5 room HDB flat, which meant that they have to pay resale levy of $45k. Therefore, in total, they would need to fork out around $375k in cash and CPF for the downpayment, which was too much for them. So they gave up the idea of buying an EC.
Unfortunately, they missed a few opportunities during the 4 months of “waiting for nothing”, only to suffer a huge disappointment…
Beat the Odds with Market Intel
Most buyers are faced with the following real estate decisions:
HDB/PTE
Should I buy a more affordable HDB flat or a more expensive private condo? Which is better value for money, and offers higher capital gains?
FH/LH
Is it worth paying more for a freehold condo? How did the prices of freehold and leasehold properties perform over time?
NEW/OLD
Why are so many buyers buying new condos despite its higher price tag? Is it worth the wait? Does it make sense to rent while waiting?
Do you have these unanswered questions too? Using actual numbers from reliable sources such as HDB, URA and MOM, I connect the dots for you so that you can have an edge over everyone else.
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A property transaction is probably the biggest transaction in your life, ever! If you plan to buy or sell any properties over the next 5 years, protect yourself and get up to date on the real estate market. Making decisions based on assumptions or emotions are common reasons why investors lose money in any asset, including shares and real estate. Let’s avoid that together.
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Would it be ok to learn something new and let your money work for you? If yes, let’s have a chat!