Salary.sg Forums - View Single Post - How much are you earning per annum?
View Single Post
  #5567 (permalink)  
Old 06-10-2014, 04:00 PM
Unregistered
Guest
 
Posts: n/a
Default

Quote:
Originally Posted by Unregistered View Post
(reply from the 33 yr, 127K job person)

How I acquired 3 properties despite not earning that much

- Upon getting married, I stayed with parents for a few years. This enabled us to save. Yes, we sacrificed some privacy, endured some nagging. But at the end, they are Parents and they meant well in their own way. So I put my pride aside, and thought long term of the good start to the finances, with the added advantage of keeping a close r/s with the parents. They won't be around forever, and parental love is the strongest force in the world that is mostly unconditional unlike romantic love, which can be unreliable.

- Never bought a car, despite strange looks from friends/ colleagues, some who are earning much less or more junior in the job but already have cars. Never bought a car despite parents nagging (image issues) either. Just keep walking and bus and MRT. Endure it for the long term financial health. Think about how much $ you will save by not servicing the car loan, insurance, petrol for an item that is yours only temporarily.

- Didn't blow my bonus entirely. Yes I enjoyed annual trips to far away places, and lived a very comfortable life dining out at fine restaurants least twice a week, and I love shopping. But stayed away from the branded stuff (Prada, LV, Gucci are lethal to the wallet), just buy high street stuff and only on sale (Zara etc). At the most, one branded purchase a year amounting to <3K.

- Spouse is more frugal than me. I am a spender as compared to my spouse.

- Timing played an important role for property. Do remember that just a few years ago, 80% LTV is possible for multiple properties. So I was unaffected by LTV problems, as long as I had 20% cash for downpayment (+ extra 10% for stamp duty, agent fees, lawyer fees etc) I am ready to go. Nowdays its certainly more difficult as prices are higher, there are LTV limitations (50% for 2nd residential property?), TDSR limitations, ADSD, and for HDB the MSR.

Actually, I am nothing compared to some of my acquaintances of the Same age, who were extremely bold and kept on leveraging up to buy more properties as the market moved up a few years ago. Their net worth is much more than mine.

Other thoughts: In the next few years, the residential property market is going to be much more challenging for landlords. e.g. my tenant wants to renew but is asking for a significant discount from the previous rental despite new amenities opening close by. Certainly the market will correct, but by how much and when, is the question that nobody can give a reliable answer.

So, even if u can buy, Don't Buy until there is solid REAL potential (e.g. future MRT station <200m and <5years time and amenities) and can get a good Return on Equity and convince yourself (mathematically, not emotionally) that there is excellent value in the property purchase. Property can be very dangerous too e.g. no tenant.
Very good post! Model to follow.
Reply With Quote