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The art of property hunting

Your property loses money not because of what you don’t know. It’s what you know for sure that just ain’t true. –PropertyNoob

Here are key strategies to use when you are investing into properties in Singapore..

There is always risk

No matter how rosy any salesperson or analyst or uncle/auntie say about their returns, there are always risks that they don’t mention. Namely,

  1. You’re leveraging when you borrow from bank
  2. There is always possible economy downturn and property prices can fall
  3. You can lose your job and salary, therefore not able to finance the mortgage

Hence, you must always ensure you have a safety net and emergency funds to pull through any period of downturn.

Agent Records

You can search in CEA public registrar to find their transactions in the last 2 years. Do note that some groups “park” their transactions under 1 agent.

Comparing New to Resale

Must adjust for significant factors

  • Pro-rated for remaining lease
  • Factor in renovation costs
  • Factor in floorplan usable area (eg. early 2000 is larger with bay window)

Why New better than Resale

  • Outperform
  • New launches quantum lower (tho PSF higher); more affordable
  • Rental flavours newer
  • Bonus: Developer Phase 1 launch with lowest profit margin, so as to spur sales
    • An upward price pressure
  • 91% of new condo make profit (CCR worse at 81% )

Factors for growth potential

  • BTO upgraders will drive drive significant growth in the same area when they MOP; In 2022-2023, the top 3 districts are Punggol, Tampines and Yishun.

Equity Term Loan

Get loan with your current property as collateral. Not possible with HDB flat. The amount is less outstanding loan and CPF used.

LTV and TDSR rules still apply, and some bank (eg SCB) treat it as another housing loan. To reduce the loan count, 1 way is to switch bank eg OCBC, UOB.

Refinancing

When refinancing – change bank – the max loan age is 75, not 65. This effectively stretch the loan tenure by 10 years, therefore lower mortgage instalments. This is a neat trick for elderly buying yet wants the max 75% LTV.