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Hi AK,
I chanced upon your blog recently while searching for landed property and found your blog very interesting.
I would like to have your opinion on my property search.
I am in my late 40s and owns 2 condos in the OCR with my wife.
One of the property is fully paid off and rented out. The other property where we live in, still have a loan of $800k for 20 years.
I am confidence of paying off the loan when I reach 55 because of the rental and we have a combine income of more than $20k per month.
We are considering selling off our 2 condos and purchasing a landed property. I did my sum and conclude that we still can have the similar loan of $800k if we purchase a landed home at $2.2 mil.
Now my Questions
1) Does it make economic sense to swap 2 condo for 1 landed if everything remain the same or similar? interest rate, loan tenure and amount etc.
2) Although with the landed, I will have no more rental income. But I will still be able to reduce the loan significant when I reach 55 with my CPF withdrawal.
3) Any pitfall that I need to consider seriously? Like is it realistic to have a $2.2mil landed?
Thanks in advance for any advice (professional or unprofessional) :-)
Best Regards
B
Hi B,
Welcome to my blog. :)
Financially, I believe that you are in a comfortable position now and buying that $2.2 million landed property doesn't seem like a demanding thing. It is affordable.
However, you did not mention how much you have in your emergency fund or what are your plans to help fund your retirement if you were to purchase the landed property.
Like you said, buying the landed property would mean giving up your rental income and it could also mean drawing upon your CPF money (which is really meant for retirement funding) to reduce the loan for the landed property at age 55.
I am just raising some pertinent questions and you don't have to tell me anything else if you don't feel comfortable to do so.
In closing, I just want to say that it is probably OK to up our consumption level if we have certainty we will avoid financial hardship later down the road.
Best wishes,
AK
Related posts:
1. Do I need a bigger home?
2. 2015 passive income all gone.
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4 comments:
Hi B,
my (unprofessional view) , Kaypo comment.
From your sharing, buying a landed is not a problem at present, many in the market to suit your $2.2m.
However selling both your condos will be a challenge at present market, of course unless your expectation of selling price is low as your have invested long time ago.
I would get a agent to market both condo to test the market response, and decide later.
Yes, if I am in your situation.
I would trade 2 condos for 1 landed :)
Regards
JQ
On my FB wall:
Daryl Lee:
"Doesn't make sense from investment pov, only if living in landed is his aspiration. Currently his $800k loan is finance by opm. If he sell 2 get 1, it'll be financed by his own reduced income."
Conversion with a friend (40+) who live in land property for 3 years...
I have his permission to share what we chat (kapoh).
me: Since you live in landed property... what do you think?
http://singaporeanstocksinvestor.blogspot.sg/2016/07/sell-2-condomiums-to-buy-1-landed.html
Sell 2 condomiums to buy 1 landed property?
D: I view landed as a slow & long term investment. It is better the person buys it at right price & 'enjoy' the stay as long as possible without thinking too much about it as an investment. Perhaps to move out only when kids grows up or house is too big to maintain at an older age.
me: Thanks for insightful thought.
Can I share your view (as landed prop owner) perspective?
Your name will not be mentioned.
D: Sure no problem.
D: Anyways, from an investment perspective, tho we dont hv full picture of their financials, i would not suggest this couple to do it as I don't think their financial is that solid. I would rather accumulate funds, wait for ABSD to be lifted for Singaporeans & get another condo for start or rent purpose.
*stay
me: He has 1 fully paid up condo and enjoying rental income.
Current stay 2nd condo, with $800K loan for 20yr. He says he can pay up by 55 (<10yr).
Look OK to me.
That's means 2 swap to 1 (landed) and fully paid by 55.
D: Assuming both couple can maintain their income position I think not a big issue. Oso, the paid condo 's rental is helping to cover their current condo, there are some luxury there. Moving into a 2.2mil landed assuming in a decent neighbourhood may probably requires some extensive renovation or sprucing up. On going maintenance & bill will be higher too. Also rental yield would not be there...
So back to my first point is the mindset much be right.. slow & long term. Enjoy & don't think too much.
me: Let's see if "B" say anything... after all he knows his circumstances.
Have a good weekend. 🙂
D: U too Bro! ☺
Chat Conversation End
Ha ha just saw Chua En Lai new advertisement as Hermit Crab looking for house.
Mr.B,
only you know which "Shell" fit your need
& like what the advertisement said , your choice must ensure you are “é«˜æž•æ— å¿§“
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