You don't have to be concerned at all. Many people are getting rich by flipping their BTO flats. Here's the steps:
1. Buy first BTO flat at $200k.
2. After MOP, apply for 2nd BTO flat for $200k.
3. When 2nd BTO flat ready, sell first BTO flat for $450k and get profit of $250k.
4. Use $50k cash for new car downpayment and $200k to pay for 2nd BTO, paid in full.
5. Use savings and any other
CPF balances to pay for transaction costs and any resale levy.
6. This allows them to get new car and new fully paid BTO flat.
Quote:
Originally Posted by Unregistered
I read with grave concern regarding the suggestion by some posters here to "flip" their BTOs to cash in some money from their heavily subsidised flats just to buy a car. I am quite sure some people are already doing this, but I hope others have better sense than this. Owning a car in this small city state with a well connected public transportation system is really unnecessary unless special circumstances warrant it.
The "flipping" of heavily subsidised BTO flats, however, in itself is not a bad thing, if you can invest the cash to generate better returns than letting the value be locked up in the flat.
The HDB loan is pegged at 2.6%, a loan rate that you cant possibly get anywhere else. Only private property loan rates are lower. If say, you flipped the BTO after the MOP, and free up some cash say $300k and invest it in blue chip stocks, you could potentially reap $15K pa in dividends as well as potential upside in capital gains. Be patient and reinvest the returns over the years, and you are on your way to a comfortable retirement or if still "young" and employed by then, the dividends earned could be used to buy that car you want!
That's what we did! Our passive income of $120K pa allowed us to buy a new car recently before the COE prices went crazy and you see your money going to pay more for the piece of paper ( COE) than the actual car!
So wise up, hold off the purchase of your car, invest your money. Use your the "free money" or passive income to buy the car later. |