How much are you earning per annum?

I am signing an OTP to buy a 1.5million condo on coming friday.
Taking a 1 million loan. This will be our 2nd property. Holding on to my hdb (700k paid up).

Me and wife save about 160k a year in cash and cpf. Hope I am making the right choice.

The fact that you are sharing this shows that you are not so sure whether you are making the right decision. To be indebted with $1m loan is unthinkable for me. If not careful, you can be in big trouble.

There are many factors to consider:

1. Is this condo a resale condo or new built? Are you going to stay in it or is this an investment property? If you are staying in it, then you plan to rent out your hdb flat. How confident are you to rent out your hdb flat? Is your hdb flat next to an MRT station?

2. If the condo is an investment property, how confident are you to rent it out? Is it a walking distance to an MRT station? or is there a short distance shuttle service from condo to the nearest MRT station? If this is an investment property, why do you choose an expensive property? Why not choose a shoebox unit costing $700k instead which gives you a high rental yield of 3.5%. Big units have very low yields.

3. How safe are your jobs? Is there a possibility that both of you can be retrenched? What if that happens and you don't have tenant? How to service the $1m loan?

If you can answer the above questions confidently, then you should be ok. If not, think 10x.

Originally Posted by Unregistered

I am signing an OTP to buy a 1.5million condo on coming friday.
Taking a 1 million loan. This will be our 2nd property. Holding on to my hdb (700k paid up).

Me and wife save about 160k a year in cash and cpf. Hope I am making the right choice.

s://sg.news.yahoo.com/3-property-investment-mistakes-avoid-2015-145946956.html

Take a look to avoid any rush and get burnt in property investment

48 year old mid income professional, $110k pa. Saves $40k pa.
Spouse, 44 year old mid income professional, $80k pa. Saves $40k pa.
Major expenses: condo, car, children, parents, restaurant dining, food, groceries, overseas holidays, insurance, taxes, etc.
Total net worth, including equity on condo, $1.2m.

Originally Posted by Unregistered

The fact that you are sharing this shows that you are not so sure whether you are making the right decision. To be indebted with $1m loan is unthinkable for me. If not careful, you can be in big trouble.

There are many factors to consider:

1. Is this condo a resale condo or new built? Are you going to stay in it or is this an investment property? If you are staying in it, then you plan to rent out your hdb flat. How confident are you to rent out your hdb flat? Is your hdb flat next to an MRT station?

2. If the condo is an investment property, how confident are you to rent it out? Is it a walking distance to an MRT station? or is there a short distance shuttle service from condo to the nearest MRT station? If this is an investment property, why do you choose an expensive property? Why not choose a shoebox unit costing $700k instead which gives you a high rental yield of 3.5%. Big units have very low yields.

3. How safe are your jobs? Is there a possibility that both of you can be retrenched? What if that happens and you don't have tenant? How to service the $1m loan?

If you can answer the above questions confidently, then you should be ok. If not, think 10x.

1. It's a resale. Will stay in condo and rent out hdb. The yield is better.
Both my hdb and condo are walking distance to mrt (700m and 500m).

2. This second property will be a gift to my children when they are older.

3. Jobs are safe. Borrowing 1m with 200k cash as buffer in savings. Also prepared to sell HDB if unthinkable happens...

Originally Posted by Unregistered

1. It's a resale. Will stay in condo and rent out hdb. The yield is better.
Both my hdb and condo are walking distance to mrt (700m and 500m).

2. This second property will be a gift to my children when they are older.

3. Jobs are safe. Borrowing 1m with 200k cash as buffer in savings. Also prepared to sell HDB if unthinkable happens...

Since your jobs are safe (meaning this must be civil service jobs and not in banking, engineering, IT, property agents, insurance agents) and you are willing to sell your HDB flat if you had to, then it looks ok. But the risks are still there. Let's say you can only sell your flat for $600k and with your $200k cash, you only have $800k. You still have a shortfall of $200k to clear the $1m bank loan. In such a case, it is better for you to sell your condo and cut your losses. At least you still have your paid up flat. Btw, what's your current total net worth?

Originally Posted by Unregistered

48 year old mid income professional, $110k pa. Saves $40k pa.
Spouse, 44 year old mid income professional, $80k pa. Saves $40k pa.
Major expenses: condo, car, children, parents, restaurant dining, food, groceries, overseas holidays, insurance, taxes, etc.
Total net worth, including equity on condo, $1.2m.

You have done well because you own and live in a condo (I estimate only 15% of Singaporeans live in a condo; 5% landed; 80% hdb flats). You are among the top 15% privelege few to own and live in a condo. You also own a car which is another big dream for Singaporeans to own. And you are saving $80k pa which means over 20 years, you will save another $1.6m. You have no problems retiring a good life.

Originally Posted by Unregistered

Since your jobs are safe (meaning this must be civil service jobs and not in banking, engineering, IT, property agents, insurance agents) and you are willing to sell your HDB flat if you had to, then it looks ok. But the risks are still there. Let's say you can only sell your flat for $600k and with your $200k cash, you only have $800k. You still have a shortfall of $200k to clear the $1m bank loan. In such a case, it is better for you to sell your condo and cut your losses. At least you still have your paid up flat. Btw, what's your current total net worth?

The risks seem minimal to me, since their jobs are safe. They can save $160k a year, which means they can pay off their loan in 6 to 7 years, if they want to, or even under 6 years, if they use their cash buffer.

Originally Posted by Unregistered

The risks seem minimal to me, since their jobs are safe. They can save $160k a year, which means they can pay off their loan in 6 to 7 years, if they want to, or even under 6 years, if they use their cash buffer.

The critical factor to their decision is their jobs. How old are they? Which industry they are in? How confident they are with their high paying jobs? These are the questions they need to ask themselves. It is all about managing their risks. In a crisis, many high paying executives lose their jobs and you will see high end condos crashing from $1.5m to $500k. If they are willing to take the risk, then they should proceed and they should not blame anyone whatever the consequences. We are all adults.

Originally Posted by Unregistered

The critical factor to their decision is their jobs. How old are they? Which industry they are in? How confident they are with their high paying jobs? These are the questions they need to ask themselves. It is all about managing their risks. In a crisis, many high paying executives lose their jobs and you will see high end condos crashing from $1.5m to $500k. If they are willing to take the risk, then they should proceed and they should not blame anyone whatever the consequences. We are all adults.

Both me and wife makes $350k last year
But we are only holding to our staying property
We do not want to commit now as we are waiting patiently for fire sale.
Hopefully by 2017~2018 we can pick up some good bargains