Resale flat in Sengkang or BTO flat in Bidadari?

Dear AK, 

I have been reading your blog for quite sometime and have since taken a thought about financial prudence before any purchase.  

I am in a dilemma to get a BTO or resale flat. 






Currently i have got a queue number to select for the recent Bidadari Bto however i have to wait for 4 years to get the flat. 

My spouse do not have a house here and my parents place do not have enough space for us to live in therefore we have to rent. 

By waiting (3rm flat rental planning for kids) my rental will probably work out to be $65,000 (for the entire waiting period).

The Bidadari BTO 4rm will probably cost about $490,000. (A new 99yr flat, near my parents place)

A resale flat in Hougang/Sengkang 4rm perhaps $350,000. (A 30yr old flat)

Now the question is if it is financially prudent to give up my BTO and get a resale flat instead. 

Bidadari BTO is an attractive location and maybe a good future investment (when?) the property goes up. 

However when i look at it financially it might not be that attractive. 

Although it is close to my parents home and a fabulous location.

Can you talk to yourself on this matter?

Your Sincerely,

V

Hi V,

$490K for a 99 year lease or $350K for a 69 year lease? 

The choice is clear. 

Throw in the rental cost of $65K (while waiting for the BTO to be built) in the meantime, it gets a bit murky. 






I would think of it as your 99 year leasehold flat costing $555K instead. 

Does this help? 

Sounds pretty pricey, doesn't it?

Personally, I am very wary of buying very old (99 years) leasehold properties for many reasons but from the perspective of cost, the resale Sengkang flat is rather pricey too. 

$350K for 69 years of remaining lease, top it up to 99 years and you will see a price tag of $502K. 






Based on this alone and nothing else, I would get the BTO flat in Bidadari. 

Better location in more ways than one and for really only a 10% premium. :)

Best wishes,
AK

Related post:
Buying a HDB flat old or new?

Regret parting with CPF-OA savings 9 years ago.

Hi AK,

I've been reading your blog recently and have been very inspired by the way you invest.

I need to seek your advice for the Prudential units trust and SRS account

I used my CPF-OA account to invest in the Prudential unit trusts 9 years ago when my insurance agent said that they will earn me more interest than the 2.5% interest CPF gave me.

Fast forward 9 years now, my $80k original invest is only worth $71k now.

I really regret listening to the insurance agent.

My question is should I cut my losses now and put the $71k put into my CPF OA account or SA Account? At least I can earn some interest rate on my $71k before I retire.

My only comfort is that shld anything happen to me now, my family can get $100k from the unit trust as it has some insurance coverage.

As per your blog, I've also set up my SRS account.

Can you advise which fund I should buy with the money in the SRS account. It's sitting there doing nothing and the interest rate in DBS is very low.

Many thanks and I look forward to hearing from you soon.

J

 

Hi J,

1. Buy insurance for the sake of insurance. Don't mix insurance and investment.

You might want to read this:
http://singaporeanstocksinvestor.blogspot.sg/2016/06/how-many-20-years-and-29000-do-we-have.html

2. No one cares more about our money than we do. Always read the fine print.

You might want to read this:
http://singaporeanstocksinvestor.blogspot.sg/2016/09/posb-manuregular-payout-better-than-cpf.html

3. I won't tell you what to use the SRS money for but I will say to avoid investing in anything which might have rights issues.

You might want to read this:
http://singaporeanstocksinvestor.blogspot.sg/2015/07/srs-account-cpf-account-and-rights.html

Best wishes,
AK