Quote:
|
Quote:
|
Quote:
|
Quote:
My advice to those who are over leveraged (defined as an LTV (loan to value) ratio of more than 30%, in my opinion) to delever. Sell away any excess investment properties you have and pay down the mortgage of your own home, the place you are living in. So, even if property prices crash by 60%, you are still above water. So if your home is worth $1m now, even if price drop by 60% to $400k, you still have a home equity of $100k since your mortgage is $300k. You are still ok provided you and wife still have jobs to service your mortgage. Best is to be debt free now. Clear your home loan now so that you don't worry about a place to stay if you both lose your jobs. Also you need to have lots of cash to buy food if you both lose your jobs. |
Thanks for the advise. You must be a wise financial planner
|
Quote:
Even our gov stopped at 50% LTV for second housing loan, and in the old days it was 80%LTV no matter how many properties an individual buys. In general, banks will allow us to keep the property as long as we can still service the monthly loan, it does not matter to the bank by how much the property value crashes as long as the individual can still service the loan. |
Quote:
For 2nd property for investment, forget about it. With the huge oversupply of new condos coming and restriction on foreign labour, there is a big risk for your condo to be empty. There are simply not enough tenants. So this will create panic and we will see fire sales everywhere. Best is to keep cash savings to prepare for emergency such as retrenchment, which is very real especially for those in their 40s, 50s and 60s. That is why I say clear your home mortgage by the time you are 40. Then save lots of cash. Can you guarantee you always have a job? No guarantee even if you think your job is solid. Nothing is for sure. Better be safe than sorry. |
For public sector workers, yes their job is secure.
The 'no guarantee' part is the tenants for the investment property. But this is where the landlord must be wise to buy a property with excellent transport links and amenties (such as next to MRT and shopping mall), and landlord must not be too greedy. The rental has to follow the market rate, if it falls then rental must fall too to ensure the property is Always Always tenanted. If the investor is wise enough to buy good property and to charge a reasonable or attractive rent to the tenant, the risk is manageable. |
Quote:
The risk of empty condos is real. Don't kid yourself. |
Ever heard of a public sector worker getting retrenched because of the economy?
If they get fired, its because of bad behaviour. Not because of a poor economy. There will always be empty condo units. In good times and in bad. The important thing is not to let Your condo unit be empty, by buying an attractive unit in an attractive location, and not be overly fussy about the rent. |
All times are GMT +8. The time now is 02:29 PM. |
Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.3.2