Condo living are the aspiration of many Singaporeans. It is hard to earn and save up for a mass market condo, what with a typical 3 bedroom condo already costing well over $1M. Even tiny 2 bedroom condos outside the central region can set you back $1M, what more if you want a luxury condo.

Luxury condos usually have these 3 attributes that put their prices way out of reach of the average Singaporean. The 3 attributes are: Central location or in districts 9 and 10, bigger floor areas ranging from 2,200 sq ft to 7,000 sq ft, and freehold or 999 year leasehold status. Even the cheapest luxury condo at $2,500psf for a $2,000sq ft home will cost you $4.5M! It is not uncommon to find luxury condos in Singapore changing hands above $6M. The bigger and more exclusive ones can easily exceed $10M in price.

While its nice to stay in a bigger and spacious home and in an exclusive condo setting, my wife and I decided that at our current age, it is more important to make our money work hard for us. The cash flow they bring in will enable us to retire well, while living in an expensive condo will not add to our cash flow when we retire.

If you have $6M net-worth or more, instead of plonking all that money into a luxury condo or landed property, buy 2 to 3 mass market condos. You can stay in one, and rent out the two to generate passive income. Better still, like us, you can further take advantage of the prolonged low interest rate climate. Instead of paying in full for your investment condos, you could take bank loans to enjoy the low interest rates. The rest of the money you could leave it in your CPF and a guaranteed 2.5% pa with no risk, or invest them in shares or ETF.

In this way, you make your money work in 3 different ways simultaneously- rental income, interest income / dividends from shares and capital appreciation of your condos.

This is what we have been doing for a few years already. Our total passive income is around $150k pa. - not including capital appreciation in our properties / shares. This is enough to fund our yearly expenses. If we had used the money to buy a luxury condo, we dont think we will have little or no passive income! We will not be able to retire or we will have to downgrade.