...

Sponsored Links

To retire by age 45, start with a plan.

"Is early retirement the right financial choice?" Jim Ellis discusses long-term financial growth strategies. I have blogged ab...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.

"E-book" by AK

Second "e-book".

Pageviews since Dec'09

Recent Comments

ASSI's Guest bloggers

Good time to buy investment property now.

Friday, April 14, 2017


"There were no worries. It was easy money."

Dear AK,
Morgan Stanley thinks that property prices in Singapore will double by 2030. 
Is a good time to buy investment property now?

Source: AsiaOne.


AK replies:
No one can say what the future holds with total confidence. Of course, people could and some would continue to make predictions for any number of reasons.

I do know that there were times in the past and also the recent past when we could get rental yields of 5% and even close to 6% in Singapore for a residential property. Although it does not adhere to the Rule of 15, in Singapore, that is probably pretty good.

Now, we are probably looking at rental yields of around 3% or, often, even lower and I have said before that this only looks attractive because of the very low interest rate environment. I don't know but did Morgan Stanley say interest rates are rising?

See: 
Rule of 15.

Having said this, I will say that there are always good investments to be found. It might be more difficult to find them but, probably, they are out there somewhere. What is a good investment? Well, it is probably safe to say that it is one that offers good value for money.

See: 
Affordability and value for money.

I acknowledge that I do not know everything there is to know and I definitely do not know what the future holds but I do know that if we wish to speculate, we must have deep pockets. 

Speculators should know that they are speculating and not investing.

See: 
Questions to ask.

Finally, of course, we could make quite a bit of money from speculating. We just have to be lucky.

Related post:
Disastrous investments in real estate.


4 comments:

Laurence N said...

All these banks are nothing more than self-serving wolves in sheep's clothing. Everything they say only serves to earn them more profits. The problem with "nonsense" spouted by "experts" is that it often becomes a self-fulfiling prophecy due to hordes of followers acting on what they read from these "experts".

AK71 said...

Hi Laurence,

We must always ask who are the ones taking risk and who are the ones taking fees without risk. ;p

MSAPersonalFinance said...

Hi AK71,

What happen if a person bought the property when he can afford but few years down the road due to unforeseen circumstances, he no longer able to pay for the mortgage? After the property taken back by the bank, does he need to declare bankrupt and being forced to terminate his life insurance, ILP at a loss to payback the difference?

AK71 said...

Hi MSA,

The bank will probably put the property on the auction block. Hopefully, it can sell for more than what is the outstanding loan amount. Otherwise, the borrower must fork out the difference even if it means selling his other assets. If he cannot do that, then, he is bankrupt.

Monthly Popular Posts

Singapore Business

Business News

 
 
Bloggy Award