dives |
22-05-2013 11:19 PM |
Quote:
Originally Posted by Unregistered
(Post 37406)
A lot of misconception about net worth here. Net worth is actually asset minus liabilities. Let's say you have bought a condo for 1M and only pay 100K, your net worth is only 100K not 1M! Your liability is 900K. Even though your asset is 1M, but you're basically 90% borrow money from the bank. So you are not actually richer than your neighbor hawker seller who already paid of his hdb last year which cost him total 200K.
So my point here is even you have multiple condo/apartments doesn't mean you are doing better then the other. You have to mention how much is your liability as well. Furthermore as asset is increasing by the time, those who already near retirement age are well of in term of net worth as compare to those who just started to work. If your point is only to compare the asset, then it's easy to increase your asset immediately. Just borrow 10M buy seashore landed property and yacht, and you became sudden millionaire. Yet if later you can't pay and bank posses it all then you only temporary millionaire. Pointless.
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There is no misconception, anyone who invest in multiple properties are fully aware of their financial ins and outs.
I've not met any true property investor who has not dealt with dealing with lawyers/banker, comparing interest rates, refinancing on increase valuation etc. Of course they know how much they owe the bank and how much the properties are worth. True benefits of property come from leverage of funds from low interest covered by rental income.
Most multiple property investors would have usually bought one property about 5 years ago for investment and used the increased valuation/profit to buy another property or two before the market really spiked.
For you to come and xuan multiple property owners with your "net worth = assets minus liabilities" is a freaking joke. Try drafting a concrete rental agreement or arguing with your bank about legal subsidy clawback despite fulfilling the the fixed term before you come back and talk nonsense.
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