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Whats your net worth

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  #1021 (permalink)  
Old 07-06-2013, 12:27 PM
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$2.5m is adequate to the end. If got wife, and children then by hook or by crook better get a job
$2.5m is adequate for a small family to lead a rather good quality life. Bear in mind that the kids will grow up and be independent in 10-20 years.

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  #1022 (permalink)  
Old 07-06-2013, 02:41 PM
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Thanks for your comments. I have spoken to a few friends and relatives, some of them are successful investors themselves. They shared with me the pros and cons of the various investment vehicles. In summary, 70% of them prefer Singapore property as their main investment asset. So, I have decided on Singapore property.

I did some research on propertyguru and found quite a number of 2 bedroom condos are selling for $800k. For my family and I, we just need a 2 bedroom unit for stay. I can then buy another 2 condos for rental. In total $2.4m. I will need to use my savings for the various transaction costs and stamp duties and small renovations. After deducting all these, I still have about $200k as emergency fund.

With the 2 bedroom condos, I think I can get about gross $3k per month each or net $2.5k per month, so I will get passive income of $5k a month in total. Our total spendings per month can be about $4k a month as we would have no mortgages and no other debt. If we can maintain the car, we will keep but if the maintenance and running cost is too high, we will just sell it away or use less often.


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You are joking right? He bought his properties sometime back (meaning at lower values), while you are entering at this elevated price environment.

Let's look at the options.
What you have : $2.5m

Condo for own stay: $1m (at this price can only get a 2 bedder - maybe 750 sf?)
Agent, stamp and legal fees: $35K?
Renovation & furnishing: $100K (simple one)

Condo for rental : $1m (same as above)
Agent, stamp and legal fees: $50K (incl ABSD)
Renovation: $30K (enough for renting out)

Emergency fund: $250K

For 2 bedder, I think can get only $3K monthly rental? Or $36K pa. gross

If put in stocks, can get better returns (from 4-8%). Some more stock now correction, good window to go in. More manoevrable - if need cash, can sell in parts. Property not so liquid. Some months no tenants then how? Still got recurring cost, maintenance and taxes, repairs

btw are you supporting yourself only - then $2.5m is adequate to the end. If got wife, and children then by hook or by crook better get a job.


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  #1023 (permalink)  
Old 07-06-2013, 05:00 PM
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I see REITs as probably a better investments than buying a residential property and renting it out for a passive income. The advantages are

1. REITs are more liquid. You can sell quickly and you can sell part of it when you need some money. For residential property, you will need to sell the entire unit and there is a longer lead time also.

2. REITs has a higher yields than renting residential property out.

3. You can buy different REITs. Logistics, hospitals (healthcare), hotels etc...for diversification but this is not possible for owning a sole residential property.

4. You don't have to manage the property yourselves with REITs

The merits goes on...and I'll not list them one by one here.

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  #1024 (permalink)  
Old 07-06-2013, 07:27 PM
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be careful of REITs. they are crashing now. a lot of people losing money on their capital. also you cant borrow to buy REITs, whereas you can for property.


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Originally Posted by Unregistered View Post
I see REITs as probably a better investments than buying a residential property and renting it out for a passive income. The advantages are

1. REITs are more liquid. You can sell quickly and you can sell part of it when you need some money. For residential property, you will need to sell the entire unit and there is a longer lead time also.

2. REITs has a higher yields than renting residential property out.

3. You can buy different REITs. Logistics, hospitals (healthcare), hotels etc...for diversification but this is not possible for owning a sole residential property.

4. You don't have to manage the property yourselves with REITs

The merits goes on...and I'll not list them one by one here.
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  #1025 (permalink)  
Old 07-06-2013, 09:02 PM
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i believe my net worth is about the trade in price of an iphone 5 16gb
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  #1026 (permalink)  
Old 07-06-2013, 11:16 PM
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be careful of REITs. they are crashing now. a lot of people losing money on their capital. also you cant borrow to buy REITs, whereas you can for property.
REITs price fluctuates more than property price ecaxtly because they are more liquid and tradeable than property. Their underlying assets are property afterall. If REITs is crashing, not due to bad management, then property price and rental yield will be dropping also. Sure enough, the latest news is that rental yield has started to drop last month. COV for HDB flats also dropping. Prices also dropping.
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  #1027 (permalink)  
Old 08-06-2013, 08:14 AM
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REITs price fluctuates more than property price ecaxtly because they are more liquid and tradeable than property. Their underlying assets are property afterall. If REITs is crashing, not due to bad management, then property price and rental yield will be dropping also. Sure enough, the latest news is that rental yield has started to drop last month. COV for HDB flats also dropping. Prices also dropping.
REITs are very, very volatile. The recent fear of QE winding down and interest rates rising caused REITs to crash. I know of people who lost so much money in REITs. Buying property for rent and keeping it for the long term is the best. I have been investing for more that 20 years and my experiences tell me that stocks and REITs cannot be trusted. You don't keep for long in these. You trade. But property will go up in the the long term, even though prices may correct at times. Stocks can go down to zero and never recover but property will recover.
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  #1028 (permalink)  
Old 08-06-2013, 09:39 AM
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Are you sure? You must have been spoken to only Sporean. Singapore rental yield is the among the lowest in the world, so not so attractive anyway given the fact that the price are very high. Take a look at these research avg rental yield is only around 2.95% while some other cities could reach as high as 8-10%.

Country investment ratings.

And in the future you will not be able to hope on the price gain as in the past, as so many gov curb to control the price. So I don't think so investing in Sg property are a good option now. There are bunch of better option out there.



Quote:
Originally Posted by Unregistered View Post
Thanks for your comments. I have spoken to a few friends and relatives, some of them are successful investors themselves. They shared with me the pros and cons of the various investment vehicles. In summary, 70% of them prefer Singapore property as their main investment asset. So, I have decided on Singapore property.
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  #1029 (permalink)  
Old 08-06-2013, 09:52 AM
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I think you forgot to calculate the mortgage you need to pay every month. For $800k condos let's say you pay $200k and borrow $600k then you need to pay arround $2800/month for 30 years. If you rent out for $3000/m, then your net passive income is only around $200/month (not $3000/month). Do you think it worth?

Quote:
Originally Posted by Unregistered View Post
I did some research on propertyguru and found quite a number of 2 bedroom condos are selling for $800k. For my family and I, we just need a 2 bedroom unit for stay. I can then buy another 2 condos for rental. In total $2.4m. I will need to use my savings for the various transaction costs and stamp duties and small renovations. After deducting all these, I still have about $200k as emergency fund.

With the 2 bedroom condos, I think I can get about gross $3k per month each or net $2.5k per month, so I will get passive income of $5k a month in total. Our total spendings per month can be about $4k a month as we would have no mortgages and no other debt. If we can maintain the car, we will keep but if the maintenance and running cost is too high, we will just sell it away or use less often.
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  #1030 (permalink)  
Old 08-06-2013, 12:46 PM
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I think you forgot to calculate the mortgage you need to pay every month. For $800k condos let's say you pay $200k and borrow $600k then you need to pay arround $2800/month for 30 years. If you rent out for $3000/m, then your net passive income is only around $200/month (not $3000/month). Do you think it worth?
Capital gains alone can boost your profit margin by hundreds of percent. It's not the rent, it's the upside of the selling price.

Then again, the price can move downwards. But it's been up up up. Only way is up.
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