🎊*Subscribe and be a part of our financially astute community!* New videos premiering every week 🎊 . Further article on this issue and in it, you'd also see flaws of investing into property and wait for upside www.theastuteparent.com/2019/03/sell-hdb-buy-private-property/
Been trying to help my friends and colleagues see the real risk behind the painted glory of owning 2 condo units. This video will surely help make it clearer. Great video josh
Yes Jazz! Welcome to our community and Share this explanation with them. Now with this economic climate, it is really dangerous to over-leverage. Take care and cya more! =)
So much advertisement are circulating around to sell HDB and buy 2 Condo especially I live in Punggol. Glad you have made this video. Indeed very helpful!
Josh, you are always unveiling the truth. As a property investor, I totally backed you up. Selling one hdb to buy 2 properties is simply not like what some of these "gurus" are telling a lot of people in their 30s who are making a average income from their jobs. I was horrified to hear them talking about how they sold their hdb and end up with not just 2 but 3, 4 and even 5 private properties !! I simply cannot fathom what will happen when any one of the investment factors (rapidly rising interest rates, loss of jobs etc) turn against them. I hope that these are just false ads and not the real situation of these people who appear in the sponsored ads.
Yes Hazel, ads exaggerate the benefit and downplay the risk. To make things worse, the most vulnerable are the most susceptible to the pitch. I hope more can see the points raised in this discussion
Nice sharing Josh, very educational! Not to forget, being an investment property, we need to factor in the cost of "fully-furnished/partial-furnished" in order to get a decent rental income, and that could easily range from $5-10K.
I love the part when the property is left vacant, no tenant, no rental income for a period of time. Be careful folks, take all these considerations mentioned by Josh into account.
Exactly, you will never hit a 100% occupancy rate for your investment. But you can still factor them into your calculations. I usually take a 90% rate on annual basis. This should give you a more realistic IRR for your property.
Thanks for the video. I think there is one more worst case scenario which the agent might not talk about, and that's the risk of price depreciation of the property during crisis or market lull. Most people think only the gain, but forget about the downside.
I totally agree with you . I get really upset with all the purported property gurus who tell very gullible people (most of whom are low white collar workers) to buy 3 to 5 properties for passive income. I wonder where is the conscience of these gurus ? Have they actually have any inkling how they can ruin the lives of these gullible people ?
Not to forget also the 4% buyer stamp duty for more than $1mil property or 3% buyer stamp duty for less than $1mil ppty (actually calculation : 3% or 4% - $15400)
also agent fee, lawyer fee, moving cost, minor reno cost, and if there is a building delay (during the pandemic its common) you have to rent another place.
Most housing agents only want to earn the commission from U. They don't care a damn whether U can really afford to service the loan down the road. Once U bought the house and they got their commission, it is YOUR problem already....
Hi Kean, ya for property side many are transactional. From my experience, usually those that are less transactional have been in the industry for many years and have an approach that value customers for the long term. Look for them
Those investors who sold hdb to buy 2 condos are not actually tenanting out forever to earn tenang fee, most are always buying and selling within 5 years and get 100 - 200k gain if it appreciates.
I’ve findings that not all Condos have appreciated. Even freehold and even new launch, here ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-nWUt2Kslejo.htmlsi=j-DD4dwxqlrV27_j
There is this notion of FOMO, actively promoted by agents that one must sell BTO upon reaching MOP to enjoy highest appreciation and may even face depreciation if kept for too Long. What I personally observe is individual level of understanding for loan breakdown. I think it’s fair to do a comparison between the potential capital appreciation of a private property VS the interest rates incurred and deducts away principal paid with other fixed expenses like legal, stamp and others. This might be very useful before making a decision to venture into private scene. Cheers
Thanks for this video. Many only see the sweet benefits painted by realtor. Too many things to look out for. It's a trap to own more properties than one could afford. You have explained it well.
Hidden costs not factored in when marketing this idea of sell one buy 2. Property and income taxes not factored in. Vacancy period not factored in. Conservancy charges not factored in and potential rise in interest rates over time. I guess most people subscribe to this marketing strategy is because of FOMO in view of rising housing prices. But I agree one must factor in that your job and health may not always be so steady.
I have another school of thoughts, if the couple is committed to two property loans, they will work very hard in their younger years to save and reduce the loan. They will not spend too much on oversea holidays...Over the years, they will become more financially stable when they pay up their loans.... of course, there is other considerations like job stability and raising your kids expenditure .... Is this true? : 'Property is a forced savings plan'
Property is a forced saving plan part it could lead to asset heavy cash strap in retirement years? And risk is if income is lost the mortgage becomes a strain. But got saving is always good la 🙂
U missed out a few more points from my personal experience 😅 Agent fee and damage that need to factor in as well. That’s y reits that is tax-free can be more hassle free in property investing 😂
Hi Josh, excellent content and explanation. 2 thumbs up. Could you do a video about owning multiple industrial properties with "little or no money down". Very hot topic since last year and too many young people are still having this dream and doesn't realise the reality and risks involved. Thanks.
HI Calvin, welcome to the channel here! Yes Ive a full tutorial on it "WHAT BUYING MULTIPLE PROPERTIES WITH NO MONEY REALLY MEAN..." ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-hxiOCDvH3SI.html . Smash the like and subs and cya around more =)
Actually the nail in coffin is not no tenant . It’s when one lose job due to retrenchment or when one is very sick and cannot work….but I can anticipate what the real estate agent will counter . Just need to sell off one property but the fact is , property is still illiquid asset and one May force to sell at a loss too, and may incur more cost in the process of selling such as SSD and agent commission . Double slap in the face.
This scheme is very risky for most heartlanders. It may work for the high income couple but it is probably more prudent for one to buy the own stay property first and the spouse can wait and see for the right investment opportunity. And this only works if private condos price still trend upwards, which is still a question mark?
I took a mortgage loan of about half a million, that was many years ago. But I am the only one who was working. So, I don't see how my wife could borrow enough money to buy a private property. In short, what some people say about buying 2 properties just doesn't work. So, one family, two jobs, two mortgage loans... is just too risky for the family and kids. They are innocent, remember that.
Yes agree David. Mortgage is not a small amount. If there is enough capital and combined income to afford 2 then it’s ok but It shouldn’t be automatically assumed that a tenant can pick it up. Many EP expats are leaving
Hi Tai hing, which property tax or stamp duty you're referring? ABSD does not apply but owner property tax, investor property tax and normal stamp duties apply. Welcome to the family and cya around =)
