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Reader says...
A lot of people like to buy property for investment only.
I don understand.
To get 4% yield is hard on properties
AK says...
I dun understand also. 😛
4% is a dream... 3% (gross yield) is already very good. 😉
And if cannot rent out, it is not 0% but negative because still must maintain. (Vacancy rate is so high now) 😛
Ask these people to buy Martin Modern by Guocoland, OK? 😛
http://www.martinmoderncondo.sg/
(Yes, I know. Bad AK! Bad AK!)
Reader says...
My mom 5 years ago bought a condo on impulse.
The rental from initial $2,750 drop to current $2,200.
Still must pay maintenance, property tax, tax on the rental income etc.
Negative return.
AK says...
Aiyoh.
Older folks even more so should be more conservative... 😞
(See related post #1 below.)
Related posts:
1. Condo investment is a drag.
2. Buy 2nd property and pay ABSD?
3. Bought multiple properties and...
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| https://singaporeanstocksinvestor.blogspot.com/2016/05/how-much-money-can-you-save.html |
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8 comments:
Jack James says...
It’s because you guys never meet with the winners yet .... ( I am not , unfortunately )
But there are many successful one out there , buying at the right time , right price , just like stocks ! So , every coins have 2 sided . I prefer to read both stories .
Rental yield is one thing , you guys forgot about the huge EXPONENTIAL price growth . ( maybe not now la , but it had happened , let’s face it ) . We didn’t catch it doesn’t mean it did not occur .
Raymond Chiam says...
Yes capital growth is the major incentive not the yield.
AK says...
Speculation versus investment. :p
As an investment, it is a drag. As a speculation, your guess is as good as mine. :p
The attraction is the use of leverage ;)
But people forget leverage is double-edged sword :O
For speculation, only buy during bad recessions. But even this is risky in Singapore's context due to the huge supply of private housing, combined with the controlled pace of immigration, combined with aging population.
The huge oversupply, both existing as well as upcoming for at least the next 5 years, is the main reason for high vacancy rates and depressed rentals.
Add to that ICA becoming stricter in approving or renewing work passes, companies reducing housing allowances (ang mohs becoming commoditized as more Europeans willing to come to Asia for the jobs).
Potential property tycoons should make weekly prayers at Kwang Im temple for govt to open foreigner floodgates & property developers to stop building for 5 years.
Hi Spur,
Always a voice of reason.
Many newly minted property investors are really speculators but they don't know it.
If they know, Kwan Im temple will have many more devotees. ;p
My friend bought 2 units private condo (District 9-10)last year and early of this year. One for own use and one for investment purposes (still vacant as at to-date). As recently all banks increase the loan interest. Thus, I asked him whether it is stressful to service the two condos. He told me...AIM FOR THE CAPITAL GAIN. WHY WORRY IF YOU KNOW THAT YOU CAN MAKE 300K IN THREE YEARS TIME. Any idea whether Singapore property sure will increase price? See so many en bloc recently, I believe developer here won't anyhow dump their money. Isn't it?
Hi Jean,
I will blog about this. :)
Hi Jean,
See:
Investing or speculating in real estate?
hi AK,
Can you talk to yourself about OUE please. Would you nibble at the current price
Thank you
eileen
Hi PL,
OUE's stock is cheap.
If I didn't have some already, I would probably nibble.
However, it is not a good dividend payer.
So, probably not for the purist income investor.
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