Interested in a career in our exciting and dynamic real estate industry?

You may be here because you are thinking of a career switch and a real estate career some how checks some of your boxes in having the best of freedom, flexibility and unlimited income.

If this is you, these are some basics you need to get started!

As with most businesses, you need 3 basic things to startup. They are :

1. Staff

2. Inventory

3. Shop

The start up cost to become a property agent in Singapore Is very low and this is one of the reasons why this career and business looks very attractive.

Staff : You do not need to hire any staff as accounts, admin and legal staff for you is provided by the Agency.

Inventory : You do not need to stock up on inventories as the properties to be sold belong to your clients.

Shop : You do not need a physical shop to run your business. All you need is a virtual property portal to advertise your listings. The annual subscription fee is still much lower than a monthly rent of a physical shop.

To kickstart your real estate career, you are required to attend the Real Estate Salesperson (RES) course and pass the RES Exams before you can be registered with the Council for Estate Agencies (CEA) as a real estate salesperson. This ultimate guide will give you a rundown of what to expect on your journey to attaining your licence.

En-route to your real estate career, here are some of the costs you will need to bear.

1. RES Course Fee

The cost of the course ranges from $650 to $784 at various CEA Approved Course Providers (read on to find out about the list of our recommended providers).

• Singaporeans and Permanent Residents above 25 years old can utilise their SkillsFuture credits of up to $500.

• If you are an NTUC member, you get to enjoy up to $250 UTAP subsidy for your exams.

2. RES Examination Fees

The RES Exams consist of 2 papers which cost $417.30 (inclusive of GST). If you are retaking the exams, it will cost you $235.40 (inclusive of GST) for each paper. After passing the papers, you will normally attend a real estate recruitment seminar and register with a licensed estate agency. These are some typical costs to note: 1. Real Estate Salesperson Registration Fee: $53.50 + $230 (annual CEA fee) = $283.50 2. Professional Indemnity Insurance: $120 3. Agency levied admin fee for name cards / ID Tag / Start Up Course etc: Ranges between $300 to $500 In total, It will cost around $2,200 to obtain your real estate licence with a real estate agency IF you pass on the 1st attempt.

​ What is the RES Course about?

Under the Estate Agents Act, it is compulsory for potential property agents to attend and complete the RES Course conducted by a CEA Approved Course Provider. This regulation is part of CEA’s goal to:

• Increase quality standards for real estate agents wanting to pursue estate agency work.

• Ensure property agents are professionally equipped and qualified.

• Understand and practise good ethical standards.

The RES Course is a preparatory course for aspiring property agents to learn and understand the industry concepts and agency practice standards. During the wide-spanning lessons, you will acquire in-depth knowledge on the rules, regulations, policies and procedures pertaining to the real estate agency practices like how you should handle a property transaction professionally and in compliance with government policies, state laws, and CEA’s prescribed rules and regulations. It is truly alot of material and knowledge to remember and understand so, before you sign up for the course, please be mentally prepared and committed to studying really hard! To put it rationally, the RES Course covers such a broad spectrum of the industry that even practising veteran real estate agents are unable to completely remember all the rules and regulations. However, it does ensure that new property agents possess a much higher level of competency and knowledge of the real estate industry and related matters than before the exams were implemented. To be qualified for the RES Course, you will have to meet these requirements: 1. Must be at least 21 years old 2. Singaporean or Permanent Resident 3. Minimum 4 GCE ‘O’ Level passes or equivalent (WPLN) 4. Fulfils CEA fit and proper criteria

RES Exam Topics

Real Estate Salesperson (RES) Exams

After completing the RES Course with a minimum attendance rate of 75%, you will receive a certification that indicates that you have completed the course. With this certification, you are then allowed to register for the RES Exams at the SEAMEO Regional Language Centre (RELC). The RES exam are usually held 3 times a year during February, June and October. However, due to Covid-19, the February and June exams were postponed. Currently the October exam dates are available for booking via this link.

Exam Format

There will be a total of 2 papers with Paper 1 and Paper 2 in the following format:

• Section A consists of 50 Multiple Choice Questions (50 marks)

• Section B consists of 15 Multiple Choice Questions with reference to 1 or 2 Case Studies (30 marks)

• Section C consists of 10 Fill-in-blank Short Answer Questions (20 marks)

The duration of each paper is 2.5 hours.

With effect from May 2013, the RES Exams format has been revised to include a Case Study Section in both Paper 1 and Paper 2 in the form of multiple choice questions. The objective is to ensure that candidates are able to analyse and interpret the issues in a practice-oriented case study context. Paper 1 tests you on:

• Competency Unit 1 comprising of “Real Estate Agency Industry Overview and Basic Land Law Concepts”

• Competency Unit 2 comprising of “Dealings with Interests in Land”

Paper 2 tests you on:

• Competency Unit 3 comprising of “Regulation of Real Estate Agency Industry and Real Estate Marketing”

• Competency Unit 4 comprising of “Property Transactions”

You are required to pass both papers in order to obtain your licence. The passing mark for each examination paper is 60% and is subject to review by the Council for Estate Agencies (CEA). RES Exams Results Notification The Exam Administrator will notify you of your results. Candidates who have passed one paper* are allowed to retake the examination in modular sitting. The exams results will be in one of the following formats:

• Pass (P)

• Fail (F)

• Pass Paper 1; Fail Paper 2 (P1 F2)

• Fail Paper 1; Pass Paper 2 (F1 P2)

It is a requirement for RES Course participants to pass the RES Exams, comprising two papers, within 2 years of getting your RES Course completion certificate.

If you have a modular pass in one paper of the RES Exams, you are required to pass the remaining paper within the 2 years timeframe.

If you fail to do so, the modular pass in one paper will not be valid and you will have to retake the RES course before attempting the RES Exams (i.e. both Paper 1 and Paper 2) again. Ouch!

​

It is highly recommended that you join in our regular free RES Exam Revision sessions. Find out more about our revision sessions here.

​

Appeal of RES Exams Results

If you think you should have passed the exams but failed, you may submit an appeal to review your paper via SEAMEO Regional Language Centre (RELC), CEA's appointed examination administrator, within 5 working days from the date of the notification of examination results.

Do take note that a non-refundable fee of $64.20 (inclusive of GST) will be charged for the review of each paper.

Important Note for Aspiring Real Estate Agents and Foreigners

Attending the RES Course and passing the exams does not automatically qualify you to be a real estate agent.

It is only part of the criteria.

You still have to fulfil other prevailing registration criteria, which include approaching a registered estate agency to submit a salesperson registration application to CEA.

You can refer to CEA’s website (www.CEA.gov.sg) for the list of registration criteria before you register yourself for the RES Course.

For foreigners exploring a career in property sales, you will need to have a valid Employment Pass (EP) issued by the Ministry of Manpower (MOM) before you can register with CEA as a real estate salesperson.

You will need to produce a letter of sponsorship issued by your real estate agency when you register for the RES Course.

Hence, you should start by first searching for an established real estate agency which is willing to hire you, to support you in your registration application and guide you through the process.

2020 Recommended CEA Approved Course Providers for the RES Course 

There are many training centres and in case you are wondering which RES course provider to go for, this list will be helpful as I have heard good reviews from the new property agents who have joined us. ​ If you stay near to central areas, BenchMark RealPro and Real Centre Network are the best choice. If you stay in the west, head to Pioneer Training & Consultancy. If you are an East sider, head to Singapore Estate Agents Association. ​

In order to reduce physical contact, RES course Is currently conducted via Zoom. Each real estate school has different RES course schedules to suit busy working adults or parents alike with courses such as weekends only, Saturdays only, specific weekday nights and express classes. Check them out here for a review and comparison. ​ Details here: ​ BenchMark RealPro Pte Ltd (Highly Recommended! Awesome trainer David Huan) Website: https://www.benchmarkrealpro.com Tel: 67355860 / 67355861 Email: benchmarkrealpro@gmail.com Venue: 151 Chin Swee Road #03-31 Manhattan House Singapore 169876. ​ Institute of Estate Agents  Website: www.iea.sg Tel No: 6323 1770 Email: courses@iea.sg Venue: 480 Lorong 6 Toa Payoh #07-01 HDB Hub East Wing Singapore 310480 ​ Pioneer Training & Consultancy Pte Ltd  Website: www.pioneertraining.org Tel No: 6462 6093 / 9424 3483 Email: pioneertc@gmail.com  Venue: Blk 134 Jurong Gateway Road #03-309P Singapore 600134 ​ Real Centre Network Pte Ltd  Website: www.realcentrenetwork.com Tel No: 6511 3009 Email: info@realcentrenetwork.com Venue: 490 Lorong 6 Toa Payoh #09-16 HDB Hub Biz 3 Singapore 310490  Singapore Estate Agents Association Website: www.seaa.org.sg Tel No: 6702 1602 Email: edu@seaa.org.sg Venue: 60 Paya Lebar Road #13-23 Paya Lebar Square Singapore 409051 (Office Lift Lobby 1) 

RES Course Types Comparison

Wondering which RES Course and Training Centre to go for?  ​ Is the express course or the 9 weeks course more suitable for you?  ​ Check out this article about my review of the 5 major course providers programmes that can suit you whether you are a full-time working mum or a self-employed with flexibility in your day to day appointments.  ​ You will learn about the costs, duration and intensity of each course type and who it is most suitable for. 

What happens after I pass my RES Exams?

​Congratulations! You deserve a pat on your back for enduring through the intensive training lessons and exams. By now, you should have done your research on which agency you should join. If you are still looking around, here’s a guide on which real estate agency you should join after passing your exams. There are several real estate agencies in the market and it can be a tough decision to select one. For your reference, the current Top 4 real estate agencies in the market are Huttons, OrangeTee & Tie, ERA, Propnex. These are the biggest and most popular real estate agencies in Singapore that has established systems in place to help you accelerate in your real estate career. Last but not least … Submitting a Salesperson Registration Get an application form from your agency and submit your application to CEA for the ‘In-Principle Approval’ (IPA).

Approval of CEA Registration

Within 4 to 6 weeks, you should receive a notification of CEA’s approval and this means you are ready to start on your exciting and rewarding real estate career!

Welcome to the club!

Looking for great career mentorship to shorten your learning curve? ​​ Get a 1-time free 30 min career consultation. ​ Drop me a WhatsApp @ 97642556 if you would like to start your career with our team or attend our upcoming quarterly RES Bootcamp!  ​ Enjoy our 100% RES joining fee subsidies for brand new/experienced agents. Limited slots available.

However, upgrading is a process that involves careful timing, and administrative detail. Mistakes can be expensive, such as paying the Additional Buyers Stamp Duty unnecessarily, or even lost deposits. So, how to manage the timeline when upgrading from HDB flat to a Condo?

In this article, I’ll explain the timeline considerations to keep in mind when upgrading:

Basic checks to make before upgrading:

These are the earliest steps to take, and it is crucial for you to do these before making your move to upgrade,

• Ensure you’re eligible to sell your flat

• Work out the needed down payment

• Check how much of your CPF you need to refund

• Make early preparations for storage and temporary accommodation

1. Ensure you’re eligible to sell your flat

The five-year MOP must be reached before you can attempt to sell your flat on the open market. If you don’t know the exact date, do contact HDB or login to HDB portal with your SingPass.

As a quick reminder, the MOP is counted from the time of key collection, not from the time you balloted for the flat, secured the OTP, etc.

Likewise, if you’ve spent any period living outside of your flat – such as if you’ve spent a year living overseas – this period will not be count toward fulfilling your MOP.

2. Work out the needed down payment

If you are using a bank loan for the first time, note that it’s different from a HDB loan. A bank loan has a maximum Loan To Value (LTV) ratio of 75 per cent – this means you can borrow up to 75 per cent of your intended condo’s price or valuation*, whichever is lower (e.g. for a $1 million condo, the maximum possible loan is $750,000).

For the down payment, the first five per cent of the condo must be paid in cash. For a $1 million condo, for example, you must prepare $50,000 in cash. The government does not permit banks to lend you this amount. Another 20 per cent of your property (i.e. the rest of the down payment) can be in any combination of cash or CPF. If you don’t want to pay any cash for this portion, do ensure you have sufficient money in your CPF.

Note that there’s no HDB loan for Executive Condominiums (ECs), so the above also applies to ECs, even if they’re still technically HDB properties at the time.

*For new launch condos, the developer’s price is considered to be the same as the valuation.

3. Check how much of your CPF you need to refund

When you sell your flat, you must refund any CPF monies that you used for the flat, along with the 2.5 per cent interest it would have accrued. Many Singaporeans would have used their CPF to pay for the following:

• Your flat down payment

• The Buyers Stamp Duty (BSD) for your flat

• Legal fees for buying the flat

• Servicing your monthly home loan

Do check with the CPF board, on how much of your CPF you’re required to refund alternatively, you can login to CPF website via Singpass to find out. While you can still use your CPF to buy your condo, you must refund the amount first, before you can use it for your next home.

Note that in some cases, the refund may take up the whole sale proceeds, leaving you with no cash in hand. In such a situation, you must look for other ways to pay the first five per cent of your condo in cash (see point 3).

4. Make early preparations for storage and temporary accommodation

Unless you’re buying a resale condo, which you can move into immediately, there will be an interim period where you need to have temporary lodging. Do make plans to store any of your large items (e.g. your bed, television set, antique study desks), as you may not be able to fit this into your temporary home. Alternatively, renting an unfurnished apartment would be ideal.

As a tip, I would suggest you trim down your spending on material goods, if you know you’ll soon be moving to a new home; this will make it much easier to move. Perhaps consider selling unused, bulky items on second-hand sites like Carousell, E-Bay, etc.

Once that’s settled, you have two choices on how to upgrade:

• Buy your new condo first, and then sell your flat

• Sell your flat first, and then buy your new condo

Option 1: Buy your condo first, and then sell your flat

The main advantage of this method is convenience. You can avoid the need for temporary accommodation, for instance, by staying in your flat until your condo is ready to move in. You can also wait in your flat while renovations are completed in your condo, and move in afterward.

A second advantage is speed: if you see a condo unit that’s right for you, you can move fast to secure it. If you wait to sell your flat first, your desired unit may be snapped up by the time you’re ready.

Step 1: Secure pre-approval from your chosen bank

Pre-approval, or Approval In Principle (AIP), is a statement from a bank; it details how much they will lend you for your property. The AIP lets you plan for the down payment (see above), and gives you a clear sense of your budget.

A poor credit score is one of the reasons why a loan application is stalled. Read my previous article to find out how you can improve your credit score for mortgage loan.

Do not put down a deposit on any property before you get the AIP. If you put down a deposit for the property, and later cannot secure a loan, you will likely forfeit the deposit.

Step 2: Be aware of any early redemption costs for your home loan, and inform the bank of your intent

For your next property, be sure the bank you are borrowing from is aware you intend to sell your flat; you may need to produce documents to prove this. This is because, if you attempt to get a home loan for the condo before your flat loan is paid off, you’ll end up with a lower loan quantum – you could have to pay as much as 45 per cent as a down payment on the condo, on account of your outstanding flat loan. But if you can show the bank the flat is being sold, they will usually grant you the maximum financing of 75 per cent (see above).

If you use a bank loan for your HDB flat, look out for prepayment penalties – a bank might charge up to 1.5 per cent of the undisbursed loan amount, if you try to pay off your remaining loan.

(HDB does not charge such penalties for its loans).

Step 3: Find the condo you like, and then secure the Option To Purchase (OTP) with a deposit

To find the right condo for you, do contact me for help; I can assist you in making an informed comparison between different developments. Once you are 100 per cent certain of the property you want, you can proceed to secure the Option to Purchase (OTP). While it’s possible for buyers and sellers to proceed straight to the OTP without first sending an Offer to Purchase, sending an Offer letter is a good practice that allows buyers to specify the terms of the subsequent OTP.

Issued by the buyer's agent on instruction by the buyer, the Offer to Purchase is accompanied by a cheque which is typically one to five per cent of the condo price. You will usually have 14 to 21 days to exercise the OTP (this is called the validity period). When you exercise the OTP, you will have to make the remainder of your down payment, and sign the Sale & Purchase (S&P) Agreement.

An OTP can be extended to a maximum of 12 weeks if you need more time; but it’s up to your seller to accept it. Important: If you don’t exercise the OTP within the validity period, you will forfeit the deposit (if it’s one per cent), or be refunded only 25 per cent of the deposit (if it’s five per cent and if you’re buying from the developer).

Step 4: Pay the relevant stamp duties after exercising the OTP, including Additional Buyers Stamp Duty (ABSD)

You must pay all relevant stamp duties within 14 days of completing the S&P Agreement. This will include the Buyers Stamp Duty (BSD) and ABSD, as you are technically buying a second property (your flat is not sold yet). BSD and ABSD can be paid in any combination of cash or CPF.

The BSD* is as follows:

• 1% of the first $180,000

• 2% of the next $180,000

• 3% of the next $640,000

• 4% of any remaining amount

So if the property price is $1.2 million, the BSD is $32,600. For the ABSD*, you’ll pay 12 per cent of the property price as it’s your second property. If you’re a Permanent Resident (PR), you’ll pay 15 per cent instead (note that if your co-owner is a PR, you’ll also pay the higher ABSD rate). An exception to this is when you’re buying an EC, in which case you don’t need to pay ABSD when upgrading.

You can apply for ABSD remission later. So long as (1) you’re a married couple with at least one Singapore Citizen, and (2) you sell your flat within six months of buying the condo, you can apply for ABSD remission. Be aware of this time-sensitive issue, when selling your old flat.

*All stamp duties are based on the higher of the property price or valuation

Step 5: Assuming the condo is completed, just wait for renovation to be finished before moving in

On average, renovations for new condos take about six to eight weeks, depending on the extent and your contractor. Note that resale condos may take longer, as you need to hack away the previous works. Speak to your contractor for a time estimate, so you can plan your move.

Option 2: Sell your flat first, then buy a condo

This is the more straightforward route. Using this method, you simply sell the flat first, and pay off your outstanding home loan (while refunding your CPF).

The average time taken to sell your flat can be taken as roughly two to three months; the typical timeline being:

Day 01: The buyer of your flat secures the OTP by giving you a deposit

Day 14 - 21: The buyer exercises the OTP to complete the transaction

Day 22 – 24: The Resale application is submitted to HDB

Day 25 – 38: HDB sends acknowledgement if there are no problems

Do note that the above is an estimated timeline, it may be shorter or longer depending on the unique situation of each transaction.

From that point forward, you can start viewing homes and take your time to buy. There’s no six-month deadline to worry about, and you don’t need to worry about upfront ABSD costs when buying. However, between the sale of your flat and moving into your new condo – you may need to rent, live with in-laws, or make some other arrangement. If necessary, you can try to negotiate for an extension from your flat buyer, for a slightly longer stay.

However, it is not a process where you have to go through alone. It’s advisable to get the help of a qualified and experienced realtor to partner and guide you through your upgrading journey.

Jacq Ng - Your HDB Upgrading Partner resolves to partner home buyers and sellers to ensure that the entire process runs smoothly. WhatsApp me or Book an Appointment so that I can review your situation, highlight common blindspots and make the process as smooth as possible. (I’ll help you get the best prices for your previous flat or new condo, while we’re at it).

About The Author

My passion for Real Estate sparked at a very young age. At 14, I would tail along with my parents as they went for home viewings, and get involved with the necessary matters whenever they shifted homes.

Later on, I was appointed as their power attorney who solely oversaw the sale and purchase of my family’s properties. From my personal experience in engaging agents, I deeply understand how important integrity is in this business.

As properties are big-ticket items, their dealings should not be taken lightly. To offer the best advice,

I always strive to put myself in the shoes of my clients such that I can help them make informed decisions which support their goals. Check out my client testimonials.

My mission is to add value and make a positive impact on the lives of my clients through sound investments and intelligent strategising. Let's connect at 97642556 to discuss on your goals.

For most Singaporeans, our property is probably the largest asset we will ever own in our entire lifetime and inextricably tied to retirement.

HDB flats in particular have long been seen as retirement assets, as their values skyrocketed over the past few decades mainly due to Singapore making its rapid transition to first world status.

Fast forward to 2020, the HDB wealth story has taken a turn. Is holding on to your HDB a good long term investment plan which can see you through your golden years?

As we can see on SRX, resale flats were once the gold standard in appreciating assets – indeed, flat prices have climbed almost nonstop since the earliest days of pubic housing.

Had you bought a flat in 2006 and sold it at the property peak of 2013, for instance, you would have enjoyed appreciation of about 80 per cent – a significant gain over just a seven-year period.

However, notice the price movement after 2013. Resale flat prices begin to drop after 2013, and have more or less declined for the past seven years.

From the same graph, you can see that if you bought a resale flat in 2013 and sold it today, you could be looking at around a 20 per cent loss. This is in stark contrast to the way the private property market has moved:

This is in spite of a slew of cooling measures, such as the Additional Buyers Stamp Duty (ABSD). As such, we can see the issue of depreciation is quite specific to HDB flats as they are supposed to be kept affordable. The fundamental advantages of Singapore’s real estate market remain strong and trend upwards, with regard to private homes.

What happened to the HDB wealth story?

Simply put, it became the HDB housing story. Unlike the past, when and HDB flat

was seen as a sure-fire ticket to wealth, the emphasis today is on providing a roof

over your head.

Read my earlier article on Can You Still Make A Profit From Selling Your HDB Flat?

Changes to government policy have reflected this: The biggest such policy change occurred in March 2014, when rules regarding Cash Over Valuation (COV) were altered.

Previous to this, it was expected that HDB flats would sell above their actual value. For example, if the HDB valuation on a flat was $350,000, the eventual price could have been about $360,000 (the excess $10,000, which had to be paid in cash, was the COV). By mid-2011, COV was rampant, with median COV reaching as high as $38,000 for most flats.

After March 2014 however, HDB would only release the actual valuation after the buyer and seller had agreed on the price. That is, you won’t know if you’re paying above the actual value, until you conclude on the price. HDB also stopped publishing COV numbers.

I also feel this is a major source of stress for buyers, as you could end up paying the difference in cash if you agree to a price that’s too high. The COV is not covered by your home loan! As a result, buyers became more cautious, and today most resale flats at transacted without any COV.

The second change was the growing awareness of lease decay

HDB flats come with 99-year leases. In the past, Singaporeans used to suspect that – at the end of that lease – the government would have a generous solution. One example was the Selective En-Bloc Redevelopment Scheme (SERS), which offered a new flat with a fresh lease, as well as generous cash compensation.

Most will instead come under the less generous Voluntary Early Redevelopment Scheme (VERS) – this allows the flat owners to collectively resell their flats to the government at fair market value (not likely to be high, given that leasehold property values tend to fall sharply after they cross the half-way mark in their lease).

As the years move on, lease decay can only take a greater toll. Older flats, which were once more desirable for their mature location, will instead be the first to bear the brunt of this – this includes the flats in Marine Parade or Queenstown, many of which were built in the 1960’s or ‘70s. We may not have felt the sting of this in the 1980s or 1990s, when flats were relatively new; but we definitely will as more flats cross the 50-year mark.

Singaporeans seeking to build wealth through property are more inclined to upgrade

As we’ve shown in the graph above, condo prices have managed to climb while HDB flat prices have mainly dwindled. This makes them more attractive as a long-term investment: As early as January of this year, HDB upgraders already made up a sizeable portion of new private home buyers.

The trend is likely to continue, given that about 50,000 flats are expected to reach their Minimum Occupation Period (MOP) between 2020 to 2021 alone. (Ironically, the bigger supply of resale flats on the market – put there by upgraders – could create even more downward pressure on resale flat values; the end of the MOP raises the supply of resale flats in the rental market, thus impacting rental yield).

The private homes market also has two significant advantages going for it. First, home loans in Singapore are cheap. Consider the Singapore Interbank Offered Rate (SIBOR), to which many home loans are pegged.

This is currently at around 0.25 per cent, down from 0.38 per cent 10 years prior. The typical home loan from a bank is now at a rock-bottom rate of 1.3 per cent per annum (by contrast, HDB loans are at 2.6 per cent). This is likely to persist while the United Stated Federal Reserve maintains its low interest rates, to cope with Covid-19.

The lower rates make properties more affordable, increase rental yields (by lowering monthly repayments), and improving overall gains.

For example: Say you were to take a loan for $900,000 to buy a condo, at a rate of 1.8 per cent (common in 2017), for 30 years. This was previously $3,237 per month, coming to total interest payments of $265,423 at the end of the loan*.

At the current rate of 1.2 per cent, the same loan would mean paying just $2,978 per month, with total interest payments of $172,144*.

*Note that home loan interest rates fluctuate, and this is an assumption based on current figures.

Most Singaporeans overestimate how much it costs to switch to a private property

HDB Upgraders do not need to have millions of dollars on hand to buy a condo. Using a bank loan, they can obtain financing of up to 75 per cent of the unit’s price. Only the first five per cent of a private property has to be paid in cash. The next 20 per cent can be paid through CPF, and the rest can come from the loan.

So for a $1.2 million condo, a buyer only needs $60,000 in cash, and $240,000 in CPF. Assuming a couple are buying, that’s $30,000 each, and $120,000 in each person’s CPF (with a 50-50 split).

For many HDB upgraders, it’s possible to cover this amount after selling their HDB property (e.g. say, a 4-room flat with sale proceeds of $300,000).

If you need help working out these numbers, contact me and I can guide you through it. During the discussion, I will be able to share with you more on the following:

1. How HDB Owners can upgrade to condominiums with no additional cash outlay

2. How to create passive income and achieve financial freedom through property wealth planning.

3. How to double your wealth safely for retirement

Switching to a private property is not just about seeking luxury, it’s about long term planning

Having facilities like pools, gyms, clubhouses, etc. are nice; but this isn’t the main reason many HDB homeowners are upgrading. In many cases, switching to a private property is a smart move to ensure your property remains an appreciating asset: one that can provide for your retirement when you right-size (or which provides a strong legacy for future generations, especially with regard to freehold units).

So if you’re thinking of the long term for your property, do contact me with any questions. I can help you work out the process and timeline for a smooth upgrade; and we’ll work out the right private property for your financial goals.

About The Author

My passion for Real Estate sparked at a very young age. At 14, I would tail along with my parents as they went for home viewings, and get involved with the necessary matters whenever they shifted homes.

Later on, I was appointed as their power attorney who solely oversaw the sale and purchase of my family’s properties. From my personal experience in engaging agents, I deeply understand how important integrity is in this business.

As properties are big-ticket items, their dealings should not be taken lightly. To offer the best advice, I always strive to put myself in the shoes of my clients such that I can help them make informed decisions which support their goals.

My mission is to add value and make a positive impact on the lives of my clients through sound investments and intelligent strategising. Let's connect at 97642556 to discuss on your goals.

Here’s what you need to know:

What is an Offer to Purchase?

The Offer to Purchase is a formal letter from the buyer to the seller, expressing a serious interest in the property. Unlike the Option to Purchase, the Offer is not considered legally binding.

The details on the Offer to Purchase include:

• The property address

• The offered price for the property

• The duration of the Option to Purchase (usually 14 days, but you can try to ask for a longer duration)

• Date for completion of transaction (usually 6 weeks after exercising the option, but you can try to ask for more time)

• Validity period of the Offer to Purchase (usually 3 days)

• Additional terms to be included in the Option to Purchase (e.g. a 5% deposit)

• The clause “subject to contract” at the header (This clause will be elaborated later in this article)

Drafted by the buyer’s agent, the Offer to Purchase is usually accompanied by a cheque, most often 1% of the purchase price as a deposit and to be used for the Option to Purchase.

Upon accepting the terms, the seller signs the Offer to Purchase and may proceed to issue the Option to Purchase (OTP) to the buyer.

If the seller decides to reject the Offer to Purchase, or when the Offer’s validity period lapses without an OTP being issued, the seller must return the cheque to the buyer.

So, the seller should not bank in the buyer’s cheque before signing the offer, as doing so could turn the Offer into a legally binding contract like the OTP.

Although Offer to Purchase can also be abbreviated as OTP, it can lead to confusion. Therefore, it’s more common now to refer to it as just the “Offer” while referring to the actual Option to Purchase as the “OTP”.

What is an Option to Purchase?

An Option to Purchase is the actual, legally binding document for purchasing a property. As mentioned, the buyer will issue a cheque for, usually, 1% of the purchase price in order to exchange for the OTP from the seller.

During the validity period of the OTP (which is indicated in the Offer to Purchase), the seller cannot accept any other offer from interested buyers.

Buyers must exercise the OTP within the validity period, otherwise, it will lapse, leading to the forfeiture of the 1% deposit.

A famous example of this is the Montebleu condo incident which happens in 2013. In this legal case, the wording on the Offer to Purchase said the “option period” (the OTP) would be “3 days” instead of the usual 14 days.

Together with the Offer to Purchase, the buyer gave the seller a cheque for the 1% option fee. When the seller issued the OTP, the three-days option period fell right in the middle of the Chinese New Year holiday.

This left the buyer in a bind; the buyer’s agent was unable to deliver the buyer-signed document on time to the seller’s solicitor by the expiry date of the option, as offices were closed.

The OTP was submitted a day late, hence, the sellers rejected it on grounds that it was already past the expiry date, and sought to keep the 1% option fee.

Ultimately though, the Court ruled that, regardless of the situation regarding the OTP, the both buyer and seller had entered into a legally binding contract because of the following two reasons:

1. The seller had banked in the buyer’s cheque for the 1% deposit

2. The clause “subject to contract” was not found on the Offer to Purchase, allowing it to become legally binding after the sellers have signed and banked in the buyer’s cheque.

Following the incident, property agents are now careful to include the exact phrase “subject to contract” in the Offer to Purchase.

In any case, you can see how the Offer letter can affect the OTP, even though the Offer isn’t a binding legal document.

Check the offer letter carefully, as it might lead to problems with the OTP later

Why do we still need an Offer to Purchase?

While it’s possible for buyers and sellers to proceed straight to the OTP without first sending an Offer to Purchase, sending an Offer letter is a standard practice that’s used by all property agents—and with good reason.

Issued by the buyer's agent on instruction by the buyer, the Offer to Purchase allows buyers to specify the terms of the subsequent OTP. For example, say you’re upgrading from an HDB flat to a condo and depend on the cash proceeds from selling your flat, specifying a longer OTP period can give you more time to consider and accept the best offer for your flat.

Likewise, the offer letter can specify the date of completion; this is of practical importance to buyers, as you need to be clear on when the transaction will be settled and you can move in.

What details and terms will you include in the Offer to Purchase? Let me know in the comments section!

About The Author

My passion for Real Estate sparked at a very young age. At 14, I would tail along with my parents as they went for home viewings, and get involved with the necessary matters whenever they shifted homes.

Later on, I was appointed as their power attorney who solely oversaw the sale and purchase of my family’s properties.

From my personal experience in engaging agents, I deeply understand how important integrity is in this business.

As properties are big-ticket items, their dealings should not be taken lightly. To offer the best advice, I always strive to put myself in the shoes of my clients such that I can help them make informed decisions which support their goals.

My mission is to add value and make a positive impact on the lives of my clients through sound investments and intelligent strategising. Let's connect at 97642556 to discuss on your goals.

In today’s article, I hope to share with you a ‘hidden treasure’ that some of you may not be aware of! It is a new launch project that is highly sought-after by HDB upgraders and investors alike. It is none other than Treasure At Tampines.

Did you know that more than 100 units in Treasure at Tampines were sold through virtual viewing during the Circuit Breaker period?

While it seems surreal that buyers will be buying big-ticket items without viewing the showflat physically, many are seizing the opportunity to grab the best deals they can find in the new launch market especially now with the low bank interest rate.

The figures are increasing as I type! Infact, Treasure at Tampines remains the Champion Top selling project in the month of June! So, what exactly makes Treasure At Tampines so desirable?

Let’s take a closer look and find out why Treasure at Tampines has stolen the hearts of so many HDB upgraders and investors.

1. Scarcity Of Private Condos in Tampines

The popularity of new condominiums in Tampines has seen an exponential growth over the last decade ever since Waterview (along Tampines Avenue 1) was first launched in November 2010. Since then, a few more condominiums have been launched along that same stretch, starting with Q Bay Residences, The Santorini, Alps Residences, and The Tapestry.

These projects were well-received and most of them have already been snapped up by buyers. Property developer Sim Lian Group distinctly saw this strong demand and the scarcity of new units available for sale.

Furthermore, none of the earlier private condos was close to an MRT station or near amenities. The overwhelming response was a message to developers, causing them to realise that there will be a huge demand for the site of Treasure At Tampines which is just next to Tampines Round Market.

As Tampines is a matured heartland estate, there are lots of HDB dwellers that have been living in their home for decades and wish to upgrade into a private property, but do not wish to leave their neighbourhood.

When they saw Treasure At Tampines being launched, they immediately jumped at the chance. This could also be the reason why the developer was confident enough to build 2203 units of different unit mix to cater for HDB upgraders as well as investors.

2. Reputable Developer

Sim Lian Group has been reputed for its outstanding track records in developing and constructing quality homes for more than 40 years.

Sim Lian has also channelled this cost savings directly to the buyer by pricing it low. With the right entry price, buyers will be able to exit when the need arises later. They will not be stuck with a property that cannot be efficiently sold off.

3. Low Entry Price

Comparing all available new launches, Treasure at Tampines is priced competitively and is the most affordable amongst other new launches. This provided a chance for HDB owners to upgrade their homes and avid investors to enter the market at the most affordable entry price.

The site where Treasure At Tampines resides is purchased at one of the lowest prices among private residential plots. This site is bought by Sim Lian Group at a price of $665 psf ppr. This is only about $90 psf ppr higher than an upcoming Executive Condominium site along Tampines Ave 10, which is acquired at $576 psf ppr.

Comparing with another new launch, the selling price of Treasure At Tampines is starting at only $1107 psf. This pricing is very close to an Executive Condominium unit at OLA, selling at $1092 psf.

Moreover, the latest completed development - My Manhatten, which is also near the Simei MRT station has already hit a market price of $1528 psf (in August 2018), for a low floor unit of 441 sf unit. However, the smaller unit of Treasure At Tampines is only going at about $1400 psf for the highest floor.

What's more? The price of Treasure At Tampines is marginally close to an Executive Condominium, yet it does not entail the restrictions of an Executive Condominium.

Hence, investors are able to rent out their units upon collection of keys, without having to wait for a 5-year Minimum Occupation Period (MOP).

In addition, it can also be sold at anytime when the desired capital appreciation is achieved.

With this attractive low entry price, the possibility of its value falling is very unlikely. This paired with all the other factors gives Treasure At Tampines a high chance of appreciation, which is an important factor to consider when buying a property. Hence, it doesn’t just make for a great stay but also functions as a key investment item.

4. Extremely Spacious and Functional Layout

Many buyers lament about the small unit size of new launch condos, which could be off-putting to HDB upgraders although they might actually desire to. But Treasure at Tampines offers spacious units up to 1722 sqft!

This is a rare find given that space is limited in Singapore nowadays and a lot of homes are compact. It is very feasible even for 3 generations to stay together, which is great as it promotes family bonding and increased interactions among the family unit.

This could also help to save money as the parents can leave their children in the care of their grandparents, they no longer need to hire a caregiver or place them in a daycare centre while they are at work.

On a bigger scale, instead of staying in two separate, smaller houses which might total up to be even more expensive, it is more financially savvy to live together in the same house which is just slightly larger. There are lots of hidden costs that are saved as well this way.

A 5-Bedroom unit starts from $1,880,000 ($1092 psf)

Even the common bedrooms in a 1722 sf 5-bedroom unit have at least an area of 10 sqm, which is equivalent to a master bedroom size of other condominiums.

Click for virtual tour: http://client.audax.com.sg/treasure/5bed/

For other layouts visit: https://api.singmap.com/app-service/u/OrangeTee&Tie/I3UBVf

5. Uncompromised Lifestyle

With a significant number of 2203 units in Treasure at Tampines, the developer aims to provide a wholesome lifestyle through an increased number of function rooms and pools. Where else can you find 11 pools and water facilities along with 9 function rooms within a development?  

Not forgetting a 24-hour gym boasting a whopping 240 sqm of workout space and exercise equipment. Well, only at Treasure of course! Kudos to the developers for thinking it through-- with 2203 units worth of residents, just the bare minimum of facilities wouldn’t suffice.

To prevent overcrowding or lack, they have decided to supplement the demand by offering a larger selection. Hence, Treasure at Tampines provides a total of 128 facilities.

These are suitable for every member of the family, making sure to cater to children as well as the elderly. For children, they will be overjoyed to know that Treasure also offers a kids slide pool, water cannon, and mist jet play.

This is something they usually get to play with when they go to water theme parks but as a resident at Treasure, they have the luxury to enjoy this right in their home. Let’s not forget the trampoline courtyard which is unheard of in any other establishment. When the kids are happy, their parents are happy too!

Check out other facilities in the video below! Honestly, I am smitten by what Treasure at Tampines can offer.

6. Low Maintenance Fees

Despite all these interesting facilities, the maintenance fee for Treasure at Tampines ranges from only $150/mth for a 1 Bedroom to $264/mth for a 5 bedroom unit. This includes a carpark lot, which already costs $120 for HDB owners who do not get to enjoy such facilities.

One of the gripes most condo owners have about owning a private property is the hefty maintenance fees. Fortunately, Treasure at Tampines keeps its maintenance fees affordable in contrast to its wide range of features, which makes it extremely value for money. HDB upgraders will find this very reasonable.

7. Close Proximity To Good Schools

Whether it is at the primary level, secondary, tertiary and even international schools, children can attend education within close proximity to home. Nowadays, the syllabus can be very demanding and students get very stressed out, all the more when their schools are located far away from their homes and they take a long time to travel there.

Living right in the vicinity of their institutions saves them a lot of time and energy that might allow them to sleep and recuperate for longer hours. This is very good for their mental state which adds to improved performance in class. The following are the nearby schools.

8. Convenience Of A Matured Estate

Tampines has begun developing as a housing estate more than 2 decades ago. The result is being full of amenities ranging from but not limited to food, groceries, malls, entertainment, transport options, services, clinics and recreational spots.

Treasure at Tampines enjoys having the round market at its doorstep, thus its residents will have no lack of food and market. Shopping Malls such as Tampines Mall, Century Square, Tampines One and Tampines Hub are all in the immediate area.

For those who might enjoy exercising and working out, the nearby Tampines Sports Hub efficiently caters to that. This is something HDB upgraders will be thankful for as they can continue relishing what their estate has to offer. With all that said, it’s near to Jewel at Changi too, which is connected to our famous Changi Airport.

9. Well Connected By Expressways And MRT Lines

The proximity to the Simei & Tampines MRT station is really a big plus point in my opinion. Although it’s not exactly right in front of the condo, at least it’s still within reasonable walking. For the location, I would say the price definitely justifies.

It is only an 8 minutes walk away from Simei MRT Station, which helps commuters quickly reach various parts of Singapore. Apart from that, the developer even provides One year of free shuttle bus service to Tampines MRT station as well as to Jewel at Changi. It is also close to major expressways such as PIE, TPE that leads to various parts of Singapore.

If other options are preferred, the bus interchange which marks the start and beginning of many bus routes is also positioned right next to the Tampines MRT Station, leaving commuters spoilt for choice!

10. Good Rentability

Even if you might want to rent out the unit in future, the catchment for tenants is big. On top of being in a great location that is conveniently accessible to many amenities, Treasure at Tampines will also draw tenants from developments such as Changi Airport, Jewel at Changi, Changi Business Park, Loyang Industrial Park and Pasir Ris Wafer Fab Park

Conclusion

With all these 10 amazing qualities, it’s no wonder that units at Treasure at Tampines are not only highly sought after by HDB upgraders but also First-time buyers and Investors too. For homeowners, Treasure at Tampines is a realistic consideration for HDB upgraders due to its low entry price. With the Tampines South Flyover in close proximity which links to the PIE and MRT stations within walking distance, it is extremely convenient.

On the other hand, investors who aspire to lease out the unit, its great location will attract a diverse tenant pool. It is also not located among the competitive condominium estates in the Tampines Avenue 10 area. Also, its wide range of facilities and low maintenance fees are a draw since the cost is low for landlords and homeowners.

Given its attractive price point compared to other new launches in the market, and its location within a mature estate, Treasure at Tampines has indeed received a wider coverage of buyers.

If you plan to make your next home in Treasure At Tampines, check out the this website

https://api.singmap.com/app-service/u/OrangeTee&Tie/I3UBVf or contact me for an exclusive viewing of the Show gallery.

About The Author

My passion for Real Estate sparked at a very young age. At 14, I would tail along with my parents as they went for home viewings, and get involved with the necessary matters whenever they shifted homes.

Later on, I was appointed as their power attorney who solely oversaw the sale and purchase of my family’s properties.

From my personal experience in engaging agents, I deeply understand how important integrity is in this business.

As properties are big-ticket items, their dealings should not be taken lightly. To offer the best advice, I always strive to put myself in the shoes of my clients such that I can help them make informed decisions which support their goals.

My mission is to add value and make a positive impact on the lives of my clients through sound investments and intelligent strategising. Let's connect at 97642556 to discuss on your goals.

As for me, I've been taking videos of vacant properties to show prospective tenants and buyers. I'm also working from home answering some of the questions which my clients have.

There is a burning question on many people’s minds. Lots of clients and friends have been asking me this same question.

In view of the covid-19 situation, is now the right time to buy a property? Since this is such a popular topic, I’ve decided to address this in my blog post today.

Before I get into the details, I will need to provide some background information for context.

Here are some important events happening in the world that impacts the economy.

As of 21st April 2020, there have been collective global efforts to combat COVID-19.

1. US has pumped in trillions of dollars to support their economy

2. China has billions poured into encouraging consumer spending

3. UK has unleashed a 'war-time' $400B Euro bailout programme for its economy

4. Japan and Europe have contributed hundreds of billions to purchase bonds and help firms

5. Many countries, including Singapore, have plunged their interest rates to all-time lows so that there will be more lending

Singapore's effort in keeping its economy alive

The core of the issue seems to revolve around two things, the first is that people are afraid of a serious economic downturn and hence are cautious about spending.

Secondly, many people are not seeing much business also, so they are not earning as much. This is a vicious cycle that cannot be resolved overnight.

According to Channel News Asia, 3,600 firms closed down in April 2020. If that sounds bad enough, a whopping 8,600 businesses filed for closure in May 2020 as reported by the Business Times. The source claimed that this number will only keep increasing.

Apart from helping to keep big firms and SMEs alive, they are also going to great lengths to ensure workers continue to be hired by their companies and that consumerism stays active. Remember the $600 payout? Apart from that, there were many other schemes that were implemented such as employment subsidies.

We can infer from government's actions that they are doing all they can to keep as many as possible afloat through this crisis.

Eventually, recovery will take place and consumer confidence will return

For confidence to return and a recovery to take place, 3 factors must occur.

1. A decline in number of infections

2. A vaccine has to be created

3. A more efficient cure needs to be developed

In the midst of all this uncertainty, it might seem right to not put our money into purchasing a property.

On the contrary, this mindset is wrong. In fact, when crisis strikes is when opportunity shows itself. When old methods do not work any more, it makes way for new ideas to surface.

Most people form opinions based on what they read from the news. When major media outlets begin announcing that the infections are steadily dropping in numbers, or that vaccines or cures have been discovered, it means that we are already entering the recovery phase.

This will raise another question: By that time, would there still be any good deals left?

There may be, but because of pent-up demand, buyers may come in a fast and furious wave. This is what happened in China, where once restrictions eased, there was a big surge in property transactions and buyers snapped up everything rapidly.

During then, sellers would definitely be a lot less willing to negotiate as compared to now, since they would not be seeing any shortage of buyers.

With all these going on, how can I be sure that now is the right time to buy property?

Just like stocks, there is no way to time the bottom of the market as it is always unpredictable. Those who try often suffer wasted efforts and missed chances.

I know it’s tempting to try waiting and capitalising on the right conditions on the account that it happens, but in such situations, waiting for the right conditions to form will result in a lot of wasted time.

What you should be doing however, is creating that opportunity for yourself.

What we can control, however, are the things we can do on our end such as scouting out good value properties, finding out more and setting realistic goals.

We should prime our attitude to focus on actively finding good deals instead. This should be all the more so in present circumstances, where to stay afloat, more groups of people have no choice but to liquidate their investments, and some developers are pricing their projects with good risk premiums factored in.

This Margin of Safety is defined by one’s personal risk tolerance and views of how the property market would pan out.

For example, some people are willing to enter it with a margin of safety of 5% below the valuation. On the other hand for some, anything below 10% is not a sufficient risk premium.

I personally assess this via the rental yield method based on current rents. Factoring in a minimum gross rental yield will help to keep things afloat should the crisis prolongs.

Especially in the current situation where some homeowners might be urgently putting up their properties for fire sale due to not having enough cash flow or suddenly getting unemployed, among other reasons. Check out my previous blog on how to find fire sale properties.

What if the property market falls further or rents correct?

While it is possible that rents may fall if the crisis continues, this risk is something which I've factored in. It would be what I am able to handle and am willing to weather through. Since rent fluctuations have already been factored in, this ensures that I've sufficient holding power.

All these will contribute to the likelihood of holding out for an eventual recovery which hopefully happens within 15-18 months time.

Conclusion

The focal point of finding the right time to enter isn't really about timing Instead, it is about intentionally creating the conditions for yourself to find the right investment property.

Realising this is like having a lot of power in your hands whereby anytime can be the right time to invest during whenever you feel is best on your end.

This is a mindset that many people do not have, where they make themselves slaves to the market condition when it is something that cannot be controlled.

I hope that reading this blog post shed some light on your property investment decisions by changing your perspective. With this information, you can better control your investment journey.

Get a complimentary 30-min Property Wealth Planning consultation which includes:

- An in-depth financial affordability assessment

- Highly relevant investment insights

- A clear and customised investment road map for your property investment journey ahead.

- A curated list of the best buys in today's market with good upside potential and minimal risks

- Selecting the best unit in a project with higher profit potential.

Do schedule an appointment with me at 97642556 if you would like to have some advice and recommendation on selecting the right property.

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About The Author

My passion is to serve my clients in building their wealth through property investments.

With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards asset progression.

This is a story of how I was able to assist my client overcome challenges and confusion, eventually helping her achieve her goal of owning her first investment property. I’m very elated to share this with you. I would like to bring you behind the scenes to show you how I turned her dreams into reality, from the financing to the selection process of owning the "right" property.

I still remember vividly how it started. One fine afternoon, while I was working from home, my phone rang. It was a WhatsApp message from my ex-secondary school classmate, Megan (name changed).

Her message read this way:

Instantaneously, I was very heartened that Megan, my classmate of 27 years ago, sought me out. All the good old memories of studying in St Hilda's Secondary School came flooding in. After all, we belonged to the same "gang" in class. I recalled fond times of us hanging out together before the bell rang for assembly, and rushing to the canteen during recess to queue up for our favourite chicken rice.

In fact, due to our similar height, we were often made to partner up with each other during PE lessons. Looking back, it's been very long since we last met.

Hence, we made an appointment to meet over dinner, so that I could find out more about her goals and have an in-depth discussion in order to assess her eligibility to own a Condo VS a HDB resale unit.

The following was her plan: - Buy a property within her means. - Lease it out first for rental income, with the possibility of her own stay in future.

At first, this seemed like a straight-forward case. But, there is more to this than meets the eye.

Let's portion out this case study into 4 sections, mainly:

1. Financial Calculation

2. HDB or Private

3. Resale or New Launch

4. Choice of Project

1. FINANCIAL CALCULATION

Megan believed that since she is a first time property buyer, she will be eligible to borrow up to 75% Loan-To-Value (LTV) which also means 75% of the property price.

After my further assessment, she revealed that her aged parents had previously utilised her name to be the guarantor for financing the current property that they are staying in.

This was done to stretch the loan tenure for a more affordable monthly loan repayment. Back then, this was a brilliant idea, so creative that the government decided to close this loop-hole for good. This meant that instead of 75%, she is now only eligible for 45% LTV. The important point to note here for property buyers is:

A decrease in borrowing percentage simply meant an increase in the amount of cash she needed to come out with for her downpayment.

So in order to proceed with the purchase, Megan had 2 options on how to pay for the down payment.

Option 1 was to use CPF and cash.

Option 2 was if there was not enough cash, Megan could apply a creative financing strategy which I shared further with her.

Next was to calculated the property price she can afford. Based on her salary and current obligations such as existing home loan and car loan, she is able to afford a property up to 750K.

I also help her to source for the best home loan interest rate which significantly help her with much savings on her monthly repayment.

2. RESALE HDB OR CONDO ?

Next, to buy a resale HDB or a Condo? If she bought a resale HDB, she would be able to enjoy a more affordable price tag and a larger space, however, she will not be able to rent out her unit for the first 5 years after her purchase.

I shared with her that despite HDB coming with a more affordable price tag, it no longer has intrinsic value from an investor’s point of view.

In order to know why this is so, it is important to take a look at the HDB resale price index extracted from SRX below.

As you can clearly see from the price index above, the HDB price index has corrected ever since year 2013.

This is due to the introduction of Mortgage Servicing Ratio (MSR) which was introduced to peg HDB prices to the income levels of the average Singaporean worker.

Large price increments of the past are unlikely to reoccur. This is also inline with government's stance on keeping HDB prices affordable.

To understand more about the factors contributing to the dwindling prices of HDB, and whether you can still make a profit from selling your HDB flat, read my previous blog here.

Now, let's take a look at the performance of private homes as shown in the figure below.

On the contrary, the private home resale price index did not suffer the same fate as HDB. Driven by strong demand, prices have begun trending up.

Singapore has built a reputation of strong fundamentals. These include political stability, economic growth, strong currency, market transparency and an effective legal system.

These reasons are also what makes Singapore an attractive top investment destination. Find out more from here.

As HDB prices are dwindling, they are not ideal for investment and hence Megan decided to drop the idea of purchasing a HDB flat. On the other hand, private properties offered great capital appreciation.

With this, we narrowed down our search criteria to focus on finding the "Right" private investment home for her.

PRIVATE RESALE OR NEW LAUNCH ?

This brings us to the next question. Resale or New launch? Which one would be more suitable for Megan? There are various considerations before one can decide which is better.

It also depends on the buyer's unique situation and needs. You can read more about the Pros and Cons of each in my previous article, New Launch Vs Resale, Which to Buy?

After looking into various considerations, I proposed that a new launch purchase would be ideal for her. These are the several reasons:

1. She will be able to enjoy Progressive Payment Scheme

Since a new launch condo is still under construction, Megan would have the option of paying for the purchase progressively in stages, rather than all at once.

This allows her to make smaller payments with more manageable instalment obligations. This also means that she can stretch out her loan repayments over a longer time.

2. She is not liable to pay for Property Tax until T.O.P

Property tax is not payable during the construction period. Hence, Megan would not have to pay for property tax until when she collects the keys to her new launch purchase.

Once she gets her unit rented out, the rent collected can defray the cost of property tax.

3. Room for capital appreciation

Many people think that how much they make from a property investment is at the point of sale, In actual fact, whether you make or lose money is already determined at your point of purchase. Unless Megan is able to find a fire-sale resale condo, chances are there is not much room for future capital appreciation.

4. Brand new fittings & furnishings

No matter if Megan decides to rent it out or stay, she or her tenants would get to enjoy fittings and furnishings that are shiny and new.

When it comes to rentability, many tenants would prefer a condo that has new facilities.

On top of that, the tenants would be happy to know that the fittings and furnishings are covered by a one year defect liability period from the developer.

5. Smart home living concept

Being the IT savvy sort, Megan would value the benefits of a smart home automation system. Some of its benefits include great potential in saving energy and money, convenience, boost in home security as well as safety regarding appliances and lighting systems. All these can be controlled remotely even when she is out of town.

CHOICE OF NEW LAUNCH PROJECT

Again, we narrowed down the search, which is to buy a New launch project. With that, the most exciting part of the property search process begins! Visiting show flats!

But wait, there are so many show flats in Singapore. Which show flat to visit?

I considered these factors to recommend a suitable project for her.

3 projects with great potential and within her affordability of 750K were shortlisted!

Each of these 3 projects are suitable "candidates" for her hence we went to explore the show flats together. After visiting the show flats, there was still lots of homework to be done!

I dove deeper into project specific considerations such as,

- the layout of the unit,

- nearby amenities,

- number of units within the project,

- reputation of the developer,

- quality of the furnishing,

- cost of maintenance fee,

- no of facilities and developer's price adjustment since the first launch.

After presenting all these factors to her, Megan finally made her careful decision. As the saying goes, beauty lies in the eyes of the beholder. She expressed her yearning interest to own 1 of them! I am glad that she managed to book a unit of her choice.

Why This Project ?

It is the perfect choice for her due to several reasons.

First of all, she loves the functional layout of the 1+study unit. It can be double up as another bedroom or converted to a walk-in wardrobe or store room. She likes the flexibility it offers.

Secondly, it is situated in the TOP favourite district of tenants in the Outside Core Region (OCR).

This strong demand from tenants makes it an ideal investment choice.

Thirdly, the low maintenance fee for this project is very attractive. It is merely $160 per month and this includes a carpark lot! Besides, it comes with a host of facilities. A typical HDB carpark lot would already cost $110.

CONCLUSION

In all, I was very glad to know that I was involved in helping Megan make an informed choice, and that my help was a key factor in her happiness today. I find that buying the correct property which fulfils all our needs, while not exceeding budgeting means is an important life decision.

Needless to say, it correlates positively with life satisfaction. Whenever I assist clients in their property journey, I inevitably feel delighted as well.

Schedule An Appointment

Due to the current Circuit Breaker measures, show flats are closed till 1 June 2020. Interested buyers can now view show flats virtually!

If you would like to grab this opportunity to own a Star-Buy unit with additional discounts, do not hesitate to connect with me for a free consultation and virtual tour of the unit layout.

About The Author

My passion for Real Estate sparked at a very young age. At 14, I would tail along with my parents as they went for home viewings, and get involved with the necessary matters whenever they shifted homes.

Later on, I was appointed as their power attorney who solely oversaw the sale and purchase of my family’s properties.

From my personal experience in engaging agents, I deeply understand how important integrity is in this business.

As properties are big-ticket items, their dealings should not be taken lightly. To offer the best advice, I always strive to put myself in the shoes of my clients such that I can help them make informed decisions which support their goals.

My mission is to add value and make a positive impact on the lives of my clients through sound investments and intelligent strategising. Let's connect at 97642556 to discuss on your goals.

Is It A Good Idea To Buy Property Under Your Child's Name?

Recently, I served a couple who is keen to purchase an investment property. Both husband and wife already owned a property each under their own names. Therefore, another purchase under either of them would mean they have to pay for the Additional Buyers Stamp Duty (ABSD).

In order to help them save on the ABSD and after accessing their financial capability, I suggested the possibility of them buying their next property under the name of their 5 year old child.

However, before you set to do this, make sure you are mindful of the conditions and implications because it may not be as straight-forward as it seems and would not be a suitable solution for everyone.

So, why buy a property under your child's name?

REASON ONE

To avoid the ABSD. Under the current cooling measures, Singaporeans need to pay 12 per cent ABSD on their second property and Permanent Residents (PR) must pay 15 per cent. This is a significant amount when you consider the price of a property.

Even if you’re purchasing a mid-ranged property priced at $1 million, the 12 per cent ABSD would mean a stamp duty amount of $120,000. One way to avoid paying ABSD is to simply purchase through your child. That is assuming your child does not have a property of their own. In this way, they would not be subject to ABSD. If your child is too young, below the age of 21, you might be advised to buy the property through a trust, which lists your child as the beneficiary. This means that your child can call for the property to be transferred to them, once they turn 21 years old. In the meantime however, you can still buy the property while avoiding the ABSD.

REASON TWO

To get better financing for mortgage loan.

For instance, if you have an outstanding home loan, or if the loan tenure would take you past the retirement age of 65, you will get a much lower Loan to Value (LTV) ratio.

You potentially need to fork out as much as 40 per cent of the property price as down payment.

However, if you buy through your adult child who is 30 years old or younger, your child would be able to get a 30 year loan tenure and the full 75 per cent LTV. By the way, these 2 methods are completely legal. The government authorities are fully aware of what is going on even though they have not taken any actions to close these loopholes, yet!

Well, if you have decided to use a trust, be ready to hand over more than just the keys.

Read on and decide for yourself if it is actually a good idea! Let's say if it’s your true intention to transfer the property to your child anyway, then the answer is a YES.

Buying the property under your child would make sense since you are already dead set on gifting your child a condo at age 21. In this case, you might as well buy it under their name now, and avoid paying ABSD unnecessarily.

However, things get tricky if you are secretly buying that property for investment. Some of the important factors that you need to consider are, 1. A much higher cash outlay, if you are setting up a trust 2. Your child can act against your will, with regards to the property 3. Your child is considered as a private property owner and this comes with all the drawbacks that entails 4. If you mess up the mortgage, you will sabotage your child’s creditworthiness 1. A much higher cash outlay, if you are setting up a trust

NO home loans are granted by the bank if you buy the property under a trust for your child.

Hence, doing so required a 100 per cent cash payment for your property. This alone means that it is out of the question for most Singaporeans. Unless you have the extra spare cash to play this game, you need to seriously consider if the high cash outlay is really worth it. You would be locking up a large amount of capital into this illiquid asset. Some of the key advantages of property investment are the high amount of leverage you can get, and the low bank interest rate environment. You will not be able to leverage on both of these advantages if you pay for the property in full cash. 2. Your child can act against your will, with regards to the property

Lady standing tiding a messed up house That terrible moment when you realise you have given your child a legal right to mess around The biggest threat, of course, is that your children has the right to sell the property after it is transferred to them. And then happily pocket the money. However, another danger of having a property in your child’s name is a reverse mortgage. It is also known as cash-out refinancing. Your child can take out a large bank loan, using the property as a collateral. For instance, let's say you buy a unit at Parc Esta, and put it in your child’s name. Currently, the market value of a 3 bedroom unit is somewhere in the range of $1.4 million.

By adopting a reverse mortgage, your child can readily borrow at least half the value of the property, which is $700,000 in cash! I probably don’t need to spell out the consequences of giving this exorbitant amount of money to, say, a 21 year old who’s really into fast cars. Currently, the interest rate on such a loan is low, often around 1.6 per cent per annum. However, if your child fails to repay this loan, the bank has a right to foreclose on the property. In my experience, it does not take long for a young adult to discover this is possible. So, do expect them to pressure you about it, with persistence and promises to pay you back. Needless to say, those entrepreneurial ones will see it as seed money for their start-ups and pester you for the funding. Other factors to consider are that your child can choose to move in to stay and not let you rent it for rental income. There are even cases where they simply let friends stay for free, thus upsetting your investment plans totally.

3. Your child is considered as a private property owner and this comes with all the drawbacks that entails

Do remember that your child will not be able to buy a HDB flat, once they own a private property. This can cause some problems later, if they want a home of their own but you are still renting out the property bought under their name. And of course, if your child tries to buy a second private property, they will face the ABSD issue which you initially tried to avoid. Not forgetting that many social benefits in Singapore are pegged to the sort of property you own. For instance, a private property owner gets far less when the government disburses freebies like the SG Bonus. In the event they need help from the government, they will often be asked to sell their private property and downgrade.

4. If you mess up the mortgage, you will sabotage your child’s creditworthiness If you are buying through your child just to get a better loan, remember you are not the one listed as a borrower. As far as the banks and the Credit Bureau of Singapore are concerned, your child is the one with the home loan. If you are unable to repay the mortgage for some reason, your child will either have to pay it out of his pocket, or be prosecuted in your place. A history of late payments or worse, a foreclosure will destroy your child’s creditworthiness. Your mistakes can make it impossible for them to secure important loans later, such as car loans, study loans, or a home loan of their own.

CONCLUSION

It is best to buy under your child’s name if you truly intend it as a gift for them and not as a “stealth investment”. As long as it is a genuine gift for your child, buying it under their name is actually a good idea. Some parents, for example, buy now for their child to secure lower entry prices. Especially when they feel that housing prices will always rise in the long run, so it is prudent to get a home now for their child. After all, Singapore is an attractive investment destination not only within the local community but also foreigner's top investment choice.

Oh, by the way, this is also a smart way to ensure their child will have a roof over their head no matter how high home prices escalate in future. Now that you read about the pros and cons of such a decision, would you buy a property under your child’s name? Voice your thoughts in our comments section below!

ABOUT THE AUTHOR

My passion is to serve my clients in building their wealth through property investments.

With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards asset progression.

Jacq Ng 9764 2556

Avoid These Costly Landlord Mistakes That Drains Away Profit (Part 2)

While some mistakes merely drain away profits, others are more severe and could get you into trouble with the law. Without a guided experience, you may end up losing money, time, and sleep over common landlord mistakes on your investment properties. These common mistakes can be categorised into 4 main areas : 1. Legal 2. Financial 3. Management 4. Marketing In Part 1, we have already covered the "LEGAL" and "FINANCIAL" type of mistakes. Let's dive deeper into the "MANAGEMENT" and "MARKETING" types of mistakes in Part 2!.

Again, if you are time pressed, these are the mistakes in point form for easier read, otherwise, read on for more details.

MANAGEMENT MISTAKES

1. Not engaging an experienced managing agent 2. Too intrusive

3. Not prudent with tenant checks

4. Not keeping tabs on the tenants during the lease

5. Trying to do everything all by yourself

6. Not doing a proper inspection during move-in /move-out

7. Be personable but don’t make it personal

MARKETING MISTAKES

1. Not pricing it right

2. Failing to realise that waiting for more could mean less

3. Poor home staging

MANAGEMENT MISTAKES

1. Not engaging an experienced managing agent Many landlords misunderstood that the leasing agent who got them their tenant ought to be an experienced managing agent. In reality, a leasing agent may not have the skill set of a managing agent.

Throughout the lease period, different issues may arise which the landlord may not foresee.

The managing agent will also be able to act as a middle-man to smooth things out before they spiral out of control. Usually, the retention fee for engaging an experienced managing agent is 10% of the monthly rent. However, some of leasing agents are prepared to carry out the role of a managing agent provided the landlord signs on the CEA Prescribed Form that they will pay commission should there be a renewal of lease.

MANAGEMENT MISTAKES

2. Too intrusive

Once you handover the property to the tenant, it is considered "theirs". In other words, their privacy should not be intruded with multiple visits to inspect the unit on the pretext of paying a friendly visit.

Your tenant may deem this as a form of harassment. After all, it is stated in the tenancy agreement the the tenant has the right to have quiet and peaceful enjoyment of the property.

MANAGEMENT MISTAKES

3. Not prudent with tenant checks

Checks such as a valid passport and employment pass should be done well before the signing of the tenancy agreement, Very commonly, employment passes may expire in the middle of the lease. You should set a reminder on your calendar to validate this one month before the expiry. You should also investigate immediately if you receive any complaints from the MCST or neighbours about abnormal activities by the tenants. For example, having a lot of people staying there when the approved number of occupiers is 2 should set you on an alert mode.

MANAGEMENT MISTAKES

4. Not keeping tabs on the tenant

Some landlords want to fetch a higher-than-market rent amount. In order to achieve this, they allow their tenant to sub-let their lease. In return, they charge higher. There have been incidences where exploitative tenants sublet the apartment to more sub-tenants than allowed. In order accommodate more sub tenants, some even built unauthorised partitions in the apartment. It will be in landlords' best interest to include a clause in the tenancy agreement to allow the landlord to inspect the property regularly. You should also ensure that the all the occupiers have valid passports and employment passes.

MANAGEMENT MISTAKES

5. Trying to do everything all by yourself

The next common mistake that drains landlords is not knowing when to ask for help. Sometimes, landlords forget how valuable their time is and try to do everything by themselves. Just because you know how to fix a water pipe leakage does not mean it makes sense to drive an hour to your property, spend two hours fixing it, and then drive an hour back home.

Alternatively, you can engage a skilled plumber to fix the water pipe and spend those four hours analyzing another property investment.

Knowing how to delegate responsibility will help you succeed as a landlord as well as keep your sanity.

MANAGEMENT MISTAKES

6. Not doing a proper inspection during move-in / move-out

When you do not document the condition of the property during move-in, it will be difficult to prove that he or she caused the damage found during move-out. It becomes a tricky “he said, she said” situation. .

Every damaged item, scratches on the hardwood floor or scuff on the wall should be noted in a report, documented with photographs.

A move-out inspection should be done as well. Proper inspection documentation will go a long way in helping a landlord especially if he or she needs to tap on the security deposit for repairs and replacement.

MANAGEMENT MISTAKES

7. Be personable but don’t make it personal

I'm sure everyone wants to be a nice landlord and still run a profitable business. Leasing out a property is a business with financial and legal consequences. A landlord should act courteously, professionally and provide good customer service.

Sometimes, it is easy to sympathize with tenants and let their problems become your problems. You are being too personal if it interferes with your business goals, especially when it comes to collecting rent on time.

Establish clear policies and stick to the rent due date, applying any applicable penalties for late payments as outlined in the lease.

A one month lapse in rent payment can easily turn into two, meaning loss income before a landlord can even begin a costly eviction process.

As always, keep meticulous records. And, finally, do not accept partial payments, as the courts interpret partial payments from tenants as an acceptance of terms by the landlord. The bottom line when interacting with tenants: Be personable but don’t make it personal.

MARKETING MISTAKES

1. Not pricing it right Over pricing the rental will cost you more than you think. For example, the latest transactions for similar sized property is $3000/mth. However, you expect to close no lesser than $3500/mth because you justify it with unblock view and therefore ought to command a premium. You do not want to lose $500 every month with an offer of $3000. However, you are actually losing $3000 every month as long as your property remains untenanted. On top of that, you still have to payment for the mortgage loan and MCST /Town council fees. Therefore, the real opportunity costs are higher than you think.

One way to know if your property is competitively priced is to check the latest rental transactions from portals such as www.srx.com.sg or www.propertyguru.com.sg

MARKETING MISTAKES 2. Failing to realise that waiting for more could mean less

Sometimes, More could mean Less.

Some landlords want to have more viewings, or rather hope to have more viewings. They hope to wait for the highest offer even when a reasonable offer comes in.

This is because, the nearby competitor landlords may get desperate from the fierce competition and decide to reduce the rent to secure the tenant.

For every tenant that is being "robbed" away from you, you will have a smaller pool of tenants to attract. Besides, subsequent tenants may offer you a lower price because your competitors have already spoilt the market.

Price it right, rent it out fast.

MARKETING MISTAKES

3. Poor home staging Some landlords do not want the hassle of sprucing up their properties during the marketing period. They either ask the tenant to take the unit "as is where is" or promise they will "do up" the unit once they secure a tenant.

In reality, a property that is not staged nicely lose out in terms of giving the prospective tenants a great viewing experience. A pleasant viewing experience tend to translate to a better offer. A unit in poor condition will not feel like a home, and it is not easy for the tenant to visualise themselves staying in it.

Do take a leaf from the property developers. They beautify the showroom unit to impress the prospective buyers.

However, landlords need not be as extravagant as the developers. All they need is to ensure that the property is clean and tidy. This kind of home staging will always stand the test of time and showcase your property better.

WHAT'S NEXT?

I understand that each property is unique and the final strategy has to be customised to suit you.

If you are unsure about how to successfully start your business as a landlord or is concern that you may not have the time and experience to perform the job well, do give me a call.

About The Author

With more than 10 yrs of experience in leasing, Jacq has been entrusted by many landlords to lease out their property. She takes pride in providing prompt service and helping Landlords to avoid pitfalls when leasing out their properties. Read testimonials by clients.

Jacq has also specially curated a Tenancy Agreement that is drafted in Layman Terms so that both landlords and tenants are clear on their obligations and clauses. 

​

A Detailed Inspection List with photos will be provided upon handover of premise to the tenant. She also assist in managing tenant's and landlord's enquiries throughout the lease. 

Call Jacq Ng at 97642556 to help with the leasing of your property.

Avoid These Costly Landlord Mistakes That Drains Away Profit (Part 1)

It may sound easy to be a landlord. Buy a property, do some renovations and viola, ready to rent it out!

But in reality, to manage an investment property successfully requires the mindset of a businessman. After all, no one goes into a business to lose money.

But, what if you are losing money in ways you didn’t even realise? Below are some of the costly mistakes that landlords made that eat into their rental profits.

Hence, there's a lot more to consider before one can be an astute landlord. Knowing and avoiding these mistakes can save you lots of frustrations and money.

These mistakes can be categorised into 4 main areas :

1. Legal

2.Financial

3. Management

4. Marketing

To make this a more digestible and easier read for you, this article will be written in 2 parts. In Part 1 of this article, we will cover the 'Legal' and 'Financial' type of mistakes. Part 2 will cover the 'Management' and 'Marketing' type of mistakes.

LEGAL

1. Too trusting and not putting into the contract

2. Not conducting proper tenant checks

3. Not abiding with HDB or MCST rules

4. Not evicting tenant soon enough

5. Too afraid to enforce the terms in the contract

6. Insufficient knowledge of the tenancy law

7. Not keeping a proper record of document

8. Not tapping on the security deposit properly

1, LEGAL - TOO TRUSTING AND NOT PUTTING INTO THE CONTRACT

Some landlords almost never consider rental as a business. As a result, they rely on promises made by the tenant just because the tenant appeared to be "honest looking".

For your own legal protection, it is essential that your tenants sign a tenancy agreement to stay in the property and ensure that he /she understands the terms of the contract.

In the event you encounter any issues or disputes with your tenant, the tenancy agreement is a binding legal contract that you can rely on to get the the judge to make a ruling.

However, tenancy agreement alone is not adequate to submit to court. Do ensure you get all the legal paperwork verified before the lease starts, otherwise the tenancy agreement would not be accepted in court.

2. LEGAL - NOT CONDUCTING PROPER TENANT CHECKS

While it is exciting to finally secure a prospect as your new tenant, it is not worth rushing ahead without first checking your tenant's credentials. An experienced agent will be able to assist you in getting the documents verfied for you.

You should be extra cautious when the tenant seems desperate to move in quickly and offers to pay much higher than market rent. There were instances whereby tenants stop paying rent after the first month, and the landlords had a terrible time evicting the tenant.

3. LEGAL - NOT ABIDING WITH HDB OR MCST RULES

It is the landlord's responsibility to ensure that the property meets the MCST or HDB rules. Please note that claiming ignorance will not excuse the landlord from the penalties.

For example, some HDB landlords assume that since pet dogs are allowed in the flat, they agree to let the tenants keep their dogs or cats. However, only an approved list of dogs breed are allowed in the flat.

If such rules are not abided, your tenants may have grounds to terminate the lease prematurely without any compensation to you. They may potentially sue you for compensation for undue hassle of moving due to your negligence.

4. LEGAL - NOT EVICTING TENANT SOON ENOUGH

Sometimes, tenants may infringe the MCST or HDB rules. If the "mistakes" persists despite warning or when the tenant defaults on rent, the landlords should take swift action to pursue or evict the tenant as soon as possible.

Not taking action at the early stage can cost you hefty sums later on. If you encounter issues with your tenant and are unsure about your rights or how to proceed, contact either your lawyer or agent as soon as possible.

5. LEGAL - TOO AFRAID TO ENFORCE TERMS IN THE CONTRACT

A good landlord and tenant relationship is ideal. However, there are cases where tenants take advantage on the kind nature of the landlords.

If your tenancy agreement states that there is late fees for late rent payment, charge it.

If your tenancy agreement states that no pets are allowed and your tenant buys a new puppy, enforce the rule.

Many a time, when landlord make exceptions or waive the rules, tenants will deem that this has become their rights on other aspects of infringement.

6. LEGAL - INSUFFICIENT KNOWLEDGE OF THE TENANCY LAW

Another mistake landlords make is not being familiar with the landlord-tenant law. Not following the legal requirements or meeing certain responsibilities can landlords into legal implications.

Terms and conditions under the "contract law" must be well understood. Neither the landlord nor the tenant can take things into their own hands and interpret the Tenancy Agreement according to their own understanding.

For instance, it is illegal for the landlord to lock up the unit even when the tenant defaults on the rent. Although the tenant had failed in his obligations of the contract, it does not give the landlord the rights to lock up the unit.

7. LEGAL - NOT KEEPING A PROPER RECORD OF DOCUMENT

Like any other businesses, proper record of document is important when dealing with the finances, especially when tracking expenses and paying taxes.

A poor record will lead to problem with tax audits and incur penalties. A prudent landlord should also keep a record on each tenant such as Employment Passes, contact information, security deposit, etc.

While the Tenancy Agreement is the contract, the Stamp Duty allows the Tenancy Agreement to be recognised in the Court of Law during a dispute.

However, some landlords used a generic Tenancy Agreement, downloaded from the internet from "reputable" or "official sources. Such generic samples often do not take into account the unique circumstances of that property.

An experienced agent will be able to prepare the Tenancy Agreement with the landlord's interests protected.

8. LEGAL - NOT TAPPING ON THE SECURITY DEPOSIT PROPERLY

The objective of the security deposit is to make up for any costs incurred if the tenant infringed the tenancy conditions. This is referred to as specific performance.

For example, the tenant may want to terminate the lease prematurely without fulfilling the Diplomatic Clause conditions. Landlords can exercise their rights to claw back the commission paid to their agents from the security deposit.

In another instance, landlords may discover certain repairs that need to be attended to when the tenant handover the unit. It is not unusual that many tenancy agreement states that the landlords have up to 14 days to return the security deposit to the tenants.

It is essential to check the premise thoroughly during these 14 days. Once the security deposit is returned, it would be almost impossible for the landlord to request for repairs compensation from the tenant.

In some cases, landlords use the security deposit to compensate for the defaulted rent or rent-in-lieu when the tenant terminates the lease prematurely.

FINANCIAL

1. Not having the right type of insurance

2. Under-estimating the cost of repairs and maintenance

3. Over-stretching financially

4. Spending on unnecessary upgrades that do not value-add

1. FINANCIAL - NOT HAVING THE RIGHT TYPE OF INSURANCE

Home Protection Insurance is something that many Landlords tend to overlook.

Many assumed that the insurance policy that is taken up with their mortgage loan will automatically insures the content in their property.

However, that is just a Fire Insurance Policy which have limited coverage on personal belongings and persons. It is only claimable in the event of a fire.

Should there be loss of items or personal injuries arising from other causes such as theft, overflowing of water pipes, malicious acts by others or natural disasters, a fire insurance policy cannot cover adequately.

Landlords can take up a home content insurance policy that includes public liability cover. This will protect them in the event a tenant makes a claim against them for an accident or theft that happen in the property.

Landlords can also consider getting a rent-guarantee insurance to cover unpaid rent if the tenant defaults on the rent.

2. FINANCIAL - UNDER-ESTIMATING THE COST OF REPAIRS & MAINTENANCE

Maintenance and repairs of structural portion of the property falls under the obligations of the landlord whereas the tenant will be responsible for maintaining items within the premise.

So, make sure you're charging enough in rent to at least help cover a portion of maintenance and repair costs.

On the flip side, if you start adding too much into your rent, you might price yourself out of the market. Discuss with an experienced agent to decide how much to add into your rent. Factoring the right amount into the rent is as much a science as well as an art.

3. FINANCIAL - OVER-STRETCHING FINANCIALLY

Financial prudence should start right at the beginning of your investment journey. Your investment property is supposed to give you passive income. Not nagging monthly financial woe and headaches.

Landlord should work with an experienced agent who will be able to guide them on selecting the right property so that their monthly mortgage will not cause them undue financial stress.

Setting aside some money right at the start of the lease is a good way to practice financial prudence. In this way, landlords can handle "unforeseen" circumstances when it happens. For example, when aircon compressor or water heater tank break down, water pipe leakage that needs immediate attention. All these can be a great expense.

4. FINANCIAL - SPENDING ON UNNECESSARY UPGRADES THAT DO NOT VALUE-ADD

A well furnished property attracts quality tenants, however, it is not advisable to spend a great amount of money on furnishings that tenants do not consider as valuable.

For example, when selecting furnitures or appliances, landlords should avoid buying or installing fanciful or customised designs that appeal only to their own liking.

Improvements such as installing costly ceiling lights that can be switched on and off with the sound of clapping may prove to be far too extravagant.

Instead, install slightly more expensive energy saving LED ceiling lights. Your tenants and recurring tenants will appreciate the savings on their monthly utility bills.

WHAT'S NEXT?

In Part 2 of this article, I will share more about the "Management" and "Marketing" types of mistakes that landlords make. Stay tuned!

About The Author

With more than 10 yrs of experience in leasing, Jacq has been entrusted by many landlords to lease out their property. She takes pride in providing prompt service and helping Landlords to avoid pitfalls when leasing out their properties. Read testimonials by clients.

Jacq has also specially curated a Tenancy Agreement that is drafted in Layman Terms so that both landlords and tenants are clear on their obligations and clauses. 

​

A Detailed Inventory List with photos will be provided upon handover of premise to the tenant. She also assist in managing tenant's and landlord's enquiries throughout the lease. 

Call Jacq Ng at 97642556 to help with the leasing of your property.

12 Reasons Why Singapore Remains An Attractive Top Investment Destination

While the whole world is battling against Covid-19, Singapore is no exception.

Since January 2020, our island has been taking several measures to contain the virus. This widespread virus has escalated into a pandemic and caused panic across the world.

Many lives were lost, businesses shuttered, jobs lost and life disrupted. Many countries went into a lock down mode in a desperate attempt to contain the dreadful pandemic.

As for the real estate sector, all showflats in Singapore were closed. No physical viewing of any properties are allowed. These are amongst some of the ways to curb the spread of the Covid-19.

There are many questions regarding the uncertainty of real estate sector.

- Will the property market crash?

- Will the real estate sector continue to thrive after the whole pandemic crisis is over?

- The world have never had a pandemic for over a century, are we able to overcome and emerge strong from all the uncertainty?

Well, all these are legit concerns, let us study further and take a look at the current situation in China.

Covid-19 started in China, with the city of Wuhan as the epi-centre. During the severe outbreak in China, the country's economy came to a standstill, including the real estate sector. Like in Singapore, China has closed all showflats and prohibit physical viewing of properties.

With the large scale of discruption, many people would expect property prices to fall after China ease lockdown restrictions. However, it was reported that property sales in 30 cities across China has rebounded threefold in March 2020 with more than 355,000 units sold. But, what has it got to do with Singapore?

Well, China is still in the midst of recovery and the sales number is expected to increase. Apart from investing within China, many Chinese has considered Singapore as their top favourite investment destination. We would expect strong demand from China as well as other countries. Let's take a look at why is this so!

Singapore is one of the most desirable cities in the world when it comes to foreign investment. Factors such as its global economic standing, stable political landscape and support for innovation, to name a few, are the considerations that investors will consider when parking their cash.

While there are many other contributing factors that have made Singapore a top investment haven, I have selected 12 reasons that make Singapore an attractive Top investment destination for property investors, multi- national companies as well as budding entrepreneurs.

If you are pressed for time, here are the 12 reasons in simple point form, otherwise read on to find out more.

1. Most Competitive Economy

2. Easiest Place To Do Business

3. Zero Capital Gains Tax

4. Top Foreign Investment Hub

5. Political Stability

6. Least Corrupt Country

7. Stable Social Climate

8. Safest City In the World

9. Best Place for Expats to Live and Work

10. High Quality of Life

11. Best Place to Raise Children

12. Best Education

1. Most Competitive Economy

In a survey conducted by the Institute Management Development, Singapore emerge to the top and overtook United States as the Most Competitive Economy. This was driven by its advanced technological infrastructure, favorable immigration laws, availability of skilled labor, and efficient ways to set up new businesses.

Economists considered competitiveness as vital for the country's economy health in the long-term. This empowers businesses to achieve sustainable growth, create jobs and, ultimately, enhance the welfare of its citizens.

2. Easiest Place To Do Business

In a research conducted by The World Bank, the Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operations. Economies with a high rank have simpler and more friendly regulations for businesses.

A common factor across the highest scoring economies is the widespread use of electronic systems. The best performers generally have a sound business regulations with a high degree of transparency.

Singapore is ranked 2nd among 190 economies in the Ease of Doing Business indicator. Contributing factors includes ease of starting business, enforcing contracts, streamline procedures for giving construction permits and protecting minority investors.

You will be also glad to know that Singapore has been ranked among the Top 3 economies in the Ease of Doing Business rankings for the past 13 consecutive years!

3. Zero Capital Gains Tax

Not all countries impose capital gains tax on properties that made a profit and Singapore is one of them! While many people lament over paying additional buyer stamp duty, they have overlooked the fact that there is zero capital gain tax. This formula ensures prudent buying and prevents a bubble from forming.

As there is no capital gains tax in Singapore, the sale of fixed assets, intangible assets, gains on foreign exchange and sale of properties are not taxable. With zero capital gains tax, investors can yield higher net returns compared to investing in other cities.

4. Top Foreign Investment Hub

Singapore has long traded as regional finance capital and headquarters hub. It has received US$78 billion of FDI in 2018, indicating its attractiveness to foreign investors. FDI spurs economy, employment and resource transfer.

5. Political Stability

Singapore is politically stable and harmonious, two key factors that make our real estate a dependable place to park your cash. One more thing to note is that government seizures, or property damage from civil unrest, is highly improbable in Singapore.

On top of that, the Singapore government has also shown that when it comes to property, it is proactive in implementing measures that keep the market stable and prevent a dangerous bubble from forming.

As if that’s not enough, Singapore government also imposes measures that regulate the quality of housing, such as the latest URA guidelines on maximum unit sizes. This is a commitment to keep Singapore's housing and neighbourhoods liveable. Such measures are definitely reassuring to investors over the long-term as it reduces uncertainties.

6. Least Corrupt Country

Corruption in Singapore is perceived as one of the lowest in the world. It has also set up the Singapore Corrupt Practices Investigation Bureau (CPIB) to handle cases of corruption. This agency investigates and prosecutes corruption in the public and private sectors.

According to a Transparency International survey, an overwhelming majority of Singaporeans do not witness any cases of corruption by public officials or institutions in their lifetime.

Singapore is ranked 3rd least corrupted out of 175 nations and the least corrupt in the region. Singapore is also recognised as one of the most efficient and cleanest in the world. Australia, Hong Kong and Japan were ranked 13th, 14th and 18th respectively.

Singapore remains as the only Asian country to be in the Top 10.

7. Stable Social Climate

Singapore's high home ownership can be attributed to affordable public housing and usage of CPF for mortgage payment. Strong home ownership is correlated to social stability and economic benefits for families, communities and the country as a whole.

According to the latest Household Expenditure Survey, Singapore has a household savings rate of 55% which includes employer CPF contributions. This puts Singapore at the top of the World League Table of savers.

8. Safest City In the World

Singapore has positioned itself as the world's second safest city in the latest edition of the Safe Cities Index (SCI), a research done by Economist Intelligence Unit's (EIU).

This Safe index ranks 60 countries across five continents and assess at more than 50 qualitative as well as quantitative indicators spread across four categories of security. Theses categories are infrastructure, digital, health and personal.

9. Best Place for Expats to Live and Work

Singapore is known worldwide for its extravagance and wealth, it was ranked top 2nd country for expats due to its strong economic situation and high quality-of-life.

Emerged top for the fourth consecutive years based on poll of over 22,000 expats. Singapore scored in good economics, best place for families and experience.

Half of the expats had achieved career progression and 60% found that children's health and well-being is better here in Singapore than in their home town.

10. High Quality of Life

Singapore has emerge as top in terms of high quality of life. It is ranked as the country with the highest quality of living in Asia-Pacific, with the highest rank in personal safety.

Here in Singapore, we continue to see major forward-thinking policies that have enabled Singapore to develop in economy and infrastructure. These has and will continue to bring benefits to its residents.

11. Best Place to Raise Children

According to the latest annual End of Childhood report published by a non-government organisation Save The Children. Singapore is the best country in the world for children to grow up in.

Singapore performs exceptionally well across the eight indicators such as, child stunting, under-five mortality rate, out-of-school children and youth, child marriage, child labour, adolescent birth rate, population displaced by conflict, and child homicide rate.

Singapore is a excellent place for children to grow up in. There are good access to high quality education and medical care services and is also one of the safest countries in the world.

A education and war, simply don't exist in Singapore.

12. Best Education

Singapore students tops the world in Maths, Science and Reading in the international benchmarking test by PISA (Programme for International Student Assessment) and OECD (Organisation for Economic Cooperation and Development).

This is attractive for foreigners who want to make Singapore their home. Stable home and great education for their children.

Last but not least, we attribute all these to our founding father Mr Lee Kuan Yew. His foresight and meticulous planning put in place various policies which enable Singapore to shine.

Conclusion

Considering all these 12 reasons. Singapore is indeed a safe haven for property investment.

In my opinion, when the whole Covid-19 pandemic is under control, private home prices could even increase as investors starts to stream in.

So, it is definitely not a pipe dream to think that a property market rebound for Singapore is in the horizon. Singapore has every necessary ingredient in place for that to happen.

About The Author

My passion is to serve my clients in building their wealth through property investments.

With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards asset progression.

Jacq Ng 9764 2556

Can You Still Make A Profit From Selling Your HDB Flat ?

This knowledge has been passed down to us from our grandparents to parents and then to us. That our HDB flats are assets which will profit over the years. It’s been drummed into us over and over again that when we buy a HDB flat, we’re not just buying a home, but an asset which will be enhanced as time goes by.

I have received several messages from my friends, who begin to question the intrinsic value of their HDB flats. Are they really a surefire investment? Are they going to make any money from their HDB when they sell? Well... let us explore further in this article, Can you still make a profit from selling your HDB?

And so the typical singaporean story goes like this... just like any other young couple would as they begin their next chapter of life, you ballot for a BTO flat, waited patiently for 4 years, move in happily into your first matrimonial home. Over the years, you start to have children, draw a greater salary as you progress up your career ladder at work.

As the 5th year of your HDB’s minimum occupation period (MOP) draws nearer, you start to toy with the idea of an upgrade to provide you and your family with a better standard of living.

The next question that will probably come into your mind would be whether to sell off your HDB flat or to keep it and lease it out. Many couples may choose to keep for sentimental reasons. After all, this is your first matrimonial home, and a subsidized flat from the government.

But before you make any decision, one important question that you ought to be asking yourself should be, does your flat has any investment value or simply put ‘Is my HDB going to help me make money?’

To answer this question, one should first understand the demand and supply of the current resale HDB market. Over the years, especially since 2013, the government has implemented several cooling measures that have resulted in the demand of resale HDB flats to decline. Let us take a look at some of them:

1. Implementation of the Mortgage Servicing Ratio

Since MSR implementation in January 2013, owners of HDB flats can only use 30% of their income to pay for the monthly instalments of their HDB. While this creates and promotes financial prudence for the buyers, MSR also limits the growth in HDB prices.

Let's take a look at the example below. Comparing TDSR (Private Property) VS MSR (HDB Flat). For a 40 yr old earning a monthly salary of $5000, he/she is eligible for a loan of $599,253 if the purchase is a Private property. Whereas, the loan amount drops drastically to $299,627 in the case for HDB flat purchase. HDB prices has since corrected and are "pegged" to income levels of the average Singapore worker. Large price increments of the past are unlikely to reoccur.

If you intend to sell your HDB above your buyer's MSR limits, chances are you are going to face difficulties selling the property at your ideal price.

2. Three Years Wait For Permanent Residents (PR) Steers Them Towards Private Homes or Rental (Aug 2013)

In 2013 there was another cooling measure that was announced. Permanent Residents (PR) will have to wait three years to buy resale flats after receiving their PR status.

This was a measure implemented by the government to ensure that PRs are not crowding the HDB resale market. The idea is to keep HDB flats affordable for Singaporeans. With such implementations, PRs who are looking at saving on rent may consider to purchase a private property instead of waiting for 3 years to purchase a resale flat.

Yes, these cooling measures do make flats more affordable for Singaporean buyers however once it comes to selling your flat when the MOP is up, your sale price will be dampened by the same cooling measures. The truth is, you might not even turn a profit from your sale.

3. Cash Over Valuation (COV) Removed

Prior to 2014, sellers focused on Cash over Valuation (COV) to determine asking price. COVs set by sellers would often get higher and higher based on what their neighbours have sold at. This brought about heightening quantum, whereby buyers ended up paying more than the fair valuation of price.

However, a change in the HDB sale process made the buyers responsible for doing the property valuation instead of the sellers. Buyers have since been very careful when it comes to giving an offer. Any offer above the valuation will cause the buyer to fork out additional cash to pay seller, on top of the valuation. This resulted in many cases where COV was at $0. Gone were the days where Sellers made good money from COVs!

4. Owners Of Private Property and Foreigners Are Not Allowed To Buy HDB

You may like to target Private property owners when selling your HDB flat, since they probably have a higher disposable income and would be able to afford a higher priced flat. Unfortunately, private property owners are not allowed to purchase a HDB flat unless they sell their private property within six months of the effective date of purchase. Therefore, this group of buyers will be relatively rare.

As for foreigners, it is a strict NO for purchasing HDB flats. Is in line with the government's policy to fend away competition for Singaporean's buyers as well as to keep HDB flats affordable.

5. Additional Buyer’s Stamp Duty

On 5 July 2018, the government announced that individuals who would like to purchase a second property would have to pay an additional 12% buyer’s stamp duty (ABSD) on top of the existing 3% buyer’s stamp duty.

This simply means that if you intent to keep your HDB flat and purchase another property, you will now have to pay an additional 12% of the property price.

Below is the ABSD one will incur when purchasing a property for the different buyer segments:

Assuming you want to buy a second property that cost $1M. You will have to fork out an additional 12% ABSD which works out to be $120K. You will pay 120k more than your neighbours for the same project and will need to sell at a higher price in the future to make the same profit.

This unfavourable position resulted in a rising trend where couples would sell their HDB. This frees their names up to each own a private property without having to pay ABSD. With more couples selling their HDB flats, this contributes to the supply of resale properties in the market, again challenging the already flooded market.

6. Increase In Supply of Build To Order (BTO) Flats

Between 2014 to 2018, there are some 25,000 BTO units which were released every year. From 2019 to 2023, we will see a record number of BTOs entering the resale market. Way surpassing that of Private homes and ECs.

Can you imagine the number HDB resale units in the market when these BTO flats reach their 5 years minimum occupation period. It will be a challenge to sell with so many supply in the market.,

7. Not All Flats Will Be Eligible For Selective En-Bloc Redevelopment Scheme (SERS)

And here comes the last point. Our housing minister, Mr Lawrence Wong has through various newspaper articles addressed concerns with regards to home buyers forking out high prices to purchase older flats, hoping to benefit from SERS. However, SERS is a selective scheme, it is clear that not all HDB owners would benefit from it.

It was emphasised by the government that when HDB leases of 99 years runs out, they have to be returned back to the state. Hence, prices of flats near the end of their lease period may come down. This may further impact the resale market for HDB, bringing prices down.

Now that you’ve made it to the end of this article, it should be clear why your HDB flat is no longer making money like how they used to for your parents or even grandparents. This is especially so for HDB bought after 2013. As such, it is not wise to buy a HDB flat just because you can afford it, or because all your friends are buying it.

HDBs are unlikely to experience much capital growth over the next decade. Upgrading to Executive Condos or Private property will enable you to better protect and grow your wealth for retirement.

If you are currently a HDB owner and would like to find out more information about how you can upgrade to own a private property, do visit my page on Property Wealth Planning where successful HDB upgrading cases are also documented and reviewed by my clients with testimonials.

About The Author

My passion is to serve my clients in building their wealth through property investments.

With my prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards owning multiple properties.

Jacq Ng 9764 2556

Credit bureau report is one of those small things that most people do not pay much attention to but is absolutely critical when you require a mortgage loan. A poor credit score is one of the reasons why loan application is stalled.

It is a waste if you have to miss a fire sale opportunity just because your mortgage loan application is declined due to poor personal credit rating and low credit score.

Be mindful about your credit records and audit your credit bureau report every now and then to position yourself with the best borrowing capacity when the time calls for it.

So, What Exactly Is A Credit Score?

Few things have a larger impact on your adult life than your credit score. A credit score is a number assigned to you as a measure of how likely you are to repay your debts and the possibility of you defaulting on payments, and plays a pivotal role in many financial decisions in your life when you require a loan.

Your credit score is also one of the factors that will determine if your loan applications are successful and consequently affect the loaned amount and interest rates. Paying scrupulous attention to your credit score is thus crucial. The score is compiled using data pooled from all financial institutions.

The score ranges from 1000 to 2000 with a higher score Indicating higher credibility and lower risk of defaulting. It is usually only obtainable via a credit report from the Credit Bureau of Singapore ( CBS ).

Your credit report also contains your financial history and your risk grade, which is the credit bureau’s index on the possibility of defaulting. The range of possibilities are denoted by numbers, from AA to HH, with AA being the best credit score, and HH indicating a high possibility of defaulting on loan payments.

Credit Bureau Singapore does not influence on any decisions whether you get a loan or not, they will just impartially provide the information that the participating financial institutions contribute on their borrower’s records.

As many different factors go into maintaining a high credit score. If you are just beginning to figure out how to Improve yours , here are some tips that might come in handy.

7 Ways To Improve Your Credit Score

1.  Always pay your bills on time

How much you utilize your credit cards, and how promptly you pay off your dues every month affects your credit score. On time payment of your debts is a great way to improve your credit score. If you are unable to pay it off all at once, then make sure you pay at least pay the minimum amount billed to you on or before the due date.

2. Repay Outstanding Debts

Payment history impacts your credit score significantly, and the fastest and most efficient way

to repair your score is to settle outstanding short-term and small loans wherever possible . Avoid getting charge-offs which occur when payment is 180 days past due . Charge-offs will reduce your credit score. Incurring a charge off also does not mean that the owed balance is written off. You are still liable to repay the amount. Furthermore, the charge-off status will continue to be reflected In your credit report for the next seven years even after repayment. The

good news is that the impact of charge-offs on your credit score will decrease with time.

3. Check your credit bureau report regularly and report any discrepancies

Sometimes, there may be errors on your credit report. If you discover any information in your credit report that is inaccurate or incomplete, you may dispute the errors with the credit bureau via online channels he phone, or mail. Include a copy of your credit report and supporting evidence that supports your claim. The credit bureau will launch an investigation. If your claim is legitimate, the credit bureau will remove the error on your report.

4. Avoid multiple loans within a short period of time

Avoid multiple loan enquiries in quick succession as this could lead to you being labelled as "credit hungry", a behaviour associated with individuals in financial difficulties. In such an instance, banks are less likely to extend new lines of credits, given the inherent risk of defaulting. Space out big purchases, as sudden changes in spending habits may also spook lenders.

5. Commit to a plan to keep a good credit score

Do not get carried away with unnecessary spending. Space out big purchases, as sudden changes in spending habits may also spook lenders. Set a budget and a budget review it. Make it a habit to check your bills on time. A good way is to arrange auto-credit your monthly payments through Giro so you will not miss out on any due dates.

6. Make sure your credit is always active

Your credit cannot be evaluated if you don’t utilised it. No credit assessment implies no credit score, and no credit score implies that banks can’t ascertain your payment conduct when assessing your loan application. Since they cannot evaluate how well you manage your finances, granting you a loan will be difficult.

In the event you are a first-time borrower and have no current credit records, your credit bureau report will reflect credit rating of CX, which implies there is insufficient information to determine a credit score.

Many will think that good quality borrowers are those who do not owe banks any debts and hence will have no issue securing a loan . On the contrary, most banks will be reluctant to extend financing to first-time borrowers with no credit profile as they can’t determine whether they are good paymasters.

6. Try to limit the number of cards and credit limit you have

If you are drawing a high income from your business, your credit cards credit limits will be high as well because most banks will grant 2 times to 4 times of your monthly income for your credit limit. If you do not foresee using such a high credit limit consistently, request your banks to lower the credit limit of your credit cards. Also, cancel credit cards that you do not need.

Having a high total aggregated total credit limit from all your personal unsecured credit facilities, will impact your credit score even if you don’t draw down on the limits. This is because you are considered a high credit risk as you can draw down at any time a large unsecured credit limit.

Remember:

Your past 12 months of account repayment history is recorded and used for calculating your credit score. This includes accounts closed and defaulted accounts, so building a habit of good credit management is key.

It can take several months to see a noticeable improvement on your score once you start working towards to turn it around. However, the sooner you start working on it, the sooner you will see your credit score improve. Jia you!

About The Author

My passion is to serve my clients in building their wealth through property investments.

With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards property wealth planning.

Jacq Ng 97642556

You may have heard of many courses out there offering people how to invest into properties with zero cash down and own multiple properties with minimum cash outlay and all.

Recently, many of my friends and colleagues have come across social media advertisement promising the above and are worried that they are being "left out" of such essential knowledge.

Indeed, theoretically, you can learn about all these things. But in reality, majority of these "good deals" were packed in the industrial property sector and it has been immensely difficult to find good deals in the residential sector.

However, considering the present market, it is appropriate to visit this topic about how you too can discover fire sale residential properties with integrated profits.

I will share with you all these details over a progression of posts that I've arranged.

So How Exactly Do You Find And Invest In Fire-Sale Properties And Profit Right Away?

Well, the short answer if you're time starved is,

1. Find a serious/ urgent seller. (Regardless through a private settlement deal or an auction sale)

2. Purchase the property at a much lower price than its valuation.

Easier said than done?

In reality, it is not easy to find a property (Especially before COVID-19 or during great going years) whose owner would consent to sell at a substantial loss.

Especially with such great demand from Singaporeans and foreigners alike, a slight discount over the valuation is usually enough to get the property off the shelf.

However, we do realise that even in good times, there are genuine fire sale bargains around. There will always be people who are going through hard times or have other squeezing motivations to give up their resale properties urgently.

Out of the numerous I have seen - Some were retrenched, some were migrating, some undergoing a divorce and some affected by business misfortunes or lost gravely in the stock market.

Some on the other hand, urgently sell to exploit more noteworthy yields and upside in the stock market (Like at this point!)

First of all, let me qualify that this is no walk in the park.

Discovering gems is tough work. So in case you're not set to do the work, it's okay, towards the end of this article, subscribe to my mailing list and you will be receiving the occasional REALLY GREAT fire sale deals I discovered. Just simply subscribe to the mailing list and wait.

Here is a 4 Steps Guide To Finding Fire-Sale Properties with Integrated Profits

Stage 1: Select A District, Segment Or Project That You Are Familiar With

In all segments, there are money to be made. But you may not have the necessary experience or knowledge to sieve out good deals from unremarkable one at a glance.

Therefore, to be a savvy fire-sale hunter, you would need to acquaint with properties in a specific district, segment or even down to the exact project that you truly like and know well.

By studying them well and inside out, you will be able to set a "target purchase price" which you know is a good fire sale deal.

Personally, my hunt revolves around apartments in Districts 1, 2, 3, 9, 10, 11, 15, 16 and 19. I know the tenancy take up rates and sales volume of these areas very well.

My personal favourite projects that I monitor on micro level are, The Sail @ Marina Bay, The Clift and several in River Valley and Novena.

I liken them as cash cow projects as they offers good and reliable rentals which is also 1 of my important rules when investing.

Not every person plays by the same rule though. I have friends who screen deals only at enbloc potential projects like Laguna Park, Neptune Court, Braddell View, Novena Court and so forth.

These projects usually have lower rental yields as they have aged significantly and do not have the modern and smart facilities that new projects have.

Step 2: Search On Major Property Portals Daily or Weekly

Search on PropertyGuru.com.sg, 99.co and EdgeProp.sg using keywords such as,

Fire Sale, Urgent, Serious Seller, Must Sell, Selling at Loss, Below Valuation and so forth.

In case you don't know how to do it, below are some example screen captures.

*Do take note that their desktop websites and mobile app search functions may be different.

Example: For PropertyGuru, you can filter by keywords under the search box right below

If you are using the mobile app, enter the keywords into the search box as indicated

.

For 99.co you will be able to enter the keywords in the fields here.

For EdgeProp.sg, it's stunningly better as there are 2 fields that can assist you with narrowing your quest for fire deal properties. One of them is to filter by "% under valuation" while the other is the typical keyword search box like the others.

If you are kiasu like me, you should scout intensively using all the 3 portals.

Step 3: Recognise Whether The Fire-Sale Listings Are GENUINE

Many times, we will find properties listed as fire sale or urgent but yet when compared to the past transaction prices, it is disappointingly untrue. Meh,

Some agents do utilize these keywords to create hype and publicity for their listings but it is not untrue all the time.

Sometimes, owners are actually urgent and desperate to sell but they may not want their agents to advertise at too low price. This is so that they can retain some buffer for negotiations.

Other times, owners could be putting on a strong front, however when offers come in, they become alot more negotiable.

This is where discernment and hard work kicks in

In order to sieve the genuine ones from the chaff, you should arm yourself with a fire shield aka thick skin.

At this point, you should have a "target purchase price" that you are happy to put up a cheque for promptly if the seller obliges.

Inform the agent about your offer with a cheque. at your target price for a specific floor level an/ or facing (Be prepared for some crude comments, mockery or radio silence). Agents usually take you more seriously when you show sincerity with a cheque and there's a higher possibility that your offer will be conveyed to the seller.

This sale should be at least 20% below the market valuation to be significant. Therefore,, it is crucial that you study the recent past transaction prices cautiously to ensure that what you comprehend as market valuation is up to date.

Before you dive into it, it is essential to check with a few bankers to ensure that the property you are interested in is indeed a good deal. (If you need tried and proven advisers like bankers/mortgage brokers or lawyers on your side, drop me a note!)

In the event that your offer is accepted, make sure you view the unit first in case there are blind spots. Vet the tenancy agreement clauses before you hand over the cheque.

*Note: Please do not go around making offers if you have no real intention of honouring your offer. This will have negative impact on you and the agent's credibility. You can be sure that your photograph, name and number will surface in industry's Facebook groups to caution others of your existence very soon.

Tip: Always Compare Apples with Apples

Bigger units typically go for a lower per square foot (PSF) price while smaller units go for a higher psf. So don't be befuddled when a good deal seems to present itself but is actually one that has a patio, a rooftop terrace, high ceiling with void airspace or just bigger than usual.

Time after time, I have seen people buying into what they thought was a good deal and then came to lament when they found they were actually paying for low proficient spaces because of a staircase, not obvious void spaces or squandered patios.

Stage 4: Informing The Area Specialists Of Your Intentions

If after all these and you are unable to find a deal you are satisfied with, then it is time to set up an alert in the property portals. It is not foolproof though as sometimes the system does not capture it accurately to update you.

Simultaneously, contact all the area specialists who furrow the fields of that area/project and inform them your "target" price for a unit. They are the ones with the latest intel and can fill in as your eyes and ears on the ground.

So be pleasant, make some new friends and you could be given priority information when the next fire deal bargain comes in!

If the above sounds like an excessive amount of work for you, subscribe to my mailing list below and you will be notified of occasional REALLY GREAT DEALS which I find!

Of course, if you are a seller of a really great deal property, I can broadcast it to my contacts too. Do drop me a note.

In my subsequent post, I will share with you how to unlock the integrated profits from the fire sale deals that you bought. So that you too can achieve what many property venture courses have been advertising as Zero money down deals.

Yes, that is achievable and there are a few different ways to accomplish this. But this post is too long for now and it's time for me to rest.

Till then!

About The Author

My passion is to serve my clients in building their wealth through property investments. With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards owning multiple properties.

Contact Jacq Ng at 97642556

You might be thinking to purchase a property but just could not decide whether a new launch property or resale property is a better investment. Well, you are definitely not alone. The important thing here is to understand that there is a different set of considerations when you are buying a property for own stay vs to rent out. This article highlights the important considerations and helps you make a wise choice when choosing between a new launch vs resale property.

Why Buy A New Launch Property?

1. Early Bird Discount

The price of the units are set by the developer. You will be able to enjoy early bird discounts during preview before the official launch of the project. This allows you to enjoy higher capital gain should you sell your unit in future.

2. Wide Selection Of Units

Unlike resale property where you must choose among the units that are on sale, new launches offers a wide selection of units. Whether you are a ground floor or high floor lover, you have a greater chance to secure a unit that will suit your liking. You can also choose your preferred facing such as pool view, garden view or unblocked view. Certain prime units offers high floor with panoramic unblock views, this allows you to fetch a premium sale price in the event you decide to sell.

3. Enjoy Progressive Payment Scheme

Since a new launch condo is still under construction, you have the option of paying for the purchase progressively in stages, rather than all at once. You pay according to the stage of construction it is at. This allows you to make smaller payments and a more manageable instalment obligations. This also means that you can stretch out your loan repayments over a longer time.

4. No Property Tax Until TOP

All property owners will be subjected to property tax. However, you will be glad to know that Property Tax is not payable during the construction period. You do not have to pay for property tax until you collect the keys to you new launch purchase.

5. New Fittings, Furnishings and Facilities

All fittings and furnishings will be shiny and brand new. They are covered by a one year defect liability period from the developer. You get to enjoy the latest furnishings as well as the latest modern facilities.

Another advantage is that you do not have to put up with the previous owner’s choices, buying a new launch allows you to do up your property according to your specification. When it comes to rentability, many tenants prefer a condo that has a new pool, top notch gym equipments, clean pools, brand new white goods and appliances and white washed walls.

Why Buy a Resale Property?

1. Rental Income Is More Predictable

It is easier to predict the rental income of a resale property. All you need to do is to look at what the current or past tenants have been paying. You can also cross check with the rental income in the nearby vicinity. Better still, you can purchase a unit that is currently tenanted. No guessing, you get what you agreed for.

2. You Can Make Your Due Diligence Checks

Although new launches come with a defects-free period, the time waiting for the defects to be rectified could cause a delay in securing a tenant for your unit. Furthermore, when it comes to new launches, there’s a risk that some defects are simply not possible to rectify. These become lasting problems. For example, the garbage chute for the block is poorly designed causing chokes and foul smells, that may be a permanent issue that will is difficult to resolve and therefore will affect rentability and its resale value.

These kind of surprises can be avoided in a resale unit, provided you diligently inspect the condo thoroughly before you put down the cheque. Finally, when purchasing a resale unit, you can gauge the traffic noise, pest problems and even check out the neighbours. These kind of issues are hard to predict when you are purchasing a new launch that doesn’t physically exist yet.

3. Better Chance To Spot Undervalued Units

There are different reasons why the owners are selling the property. Sometimes, it could be due to issues such as unable to service the mortgage, and the sellers will be in a rush to liquidate their property in a fire sale. Some sellers have emotional motives, the unit may remind them of their recent divorce, and they’re eager to get away from the unpleasant memories. If you have an eye with spotting undervalued properties, this could mean finding very good investment unit. Having said that, you can also bargain with the seller to negotiate the selling price.

4. You Can Collect Your Keys Much Sooner

Unlike purchasing a New launch where you have to wait for years to collect your keys, a resale property allows you to collect your keys within 12 weeks typically. With that, you can start enjoying your purchase be it for own stay or securing a tenant. With the collected rent, you can pay for the mortgage loan.

5. Resale Properties Typically Have More Space

Size Matters! Unlike new launches where space is compromised, getting a resale unit gives you a greater opportunity to land yourself with a more spacious home. This is especially so if you intend to start a family or stay with your parents or in laws. Resale properties tend to be more spacious and allows you to feel the space as part of your due diligence.

So, New Launch or Resale? Ultimately, the decision to buy which condo depends on your goal for the property. Your Call.

About The Author

My passion is to serve my clients in building their wealth through property investments. With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.

I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards asset progression.

Have you, your friend or family member ever had to rent out an apartment in Singapore?

If so, you would have had to sign a tenancy agreement. So, what is a tenancy agreement?

It is a contract between a landlord and a tenant. In this contract, the landlord is essentially agreeing to grant a lease of a specified property to the tenant for a certain period of time.

What is a lease?

Although there is some debate over the nature of a lease in legal terms, it is safe to say that a lease is a sort of ownership interest in the leased property. Thus, the tenant can be considered a sort of owner of the apartment for the duration of the lease.

Why a Tenant can be considered as an Owner?

The reason why the tenant is referred to as an “owner” is because the tenant has exclusive possession of the leased property for the duration of the lease e.g the sole right to possess and occupy the leased property to the exclusion of the landlord and others subject to certain exceptions). One could imagine the landlord being the main owner and the tenant being a sub-owner. The tenancy agreement determines and regulates this relationship between them.

Just this short introduction reveals how tenancy agreements involve specific concepts, which translates into somewhat complex terms which laypeople may find difficult to understand.

Legal obligations are binding, and could potentially be very detrimental if they are particularly one-sided against the tenant in favour of the landlord. Thus, it is important for potential tenants to understand the terms of the agreement they are signing. This article may help you by giving you a preliminary understanding of common terms found in a tenancy agreement.

Structure of a Tenancy Agreement

A basic residential tenancy agreement will likely contain the following provisions. These provisions are arranged largely chronologically, from the signing of the agreement to rights and obligations to be performed and observed by both parties in relation to the lease, to the termination of the lease and other ancillary issues:

Date When the tenancy agreement is signed;

Personal details Full name, identification number and contact address of the landlord and tenant;

Address Location of property being leased by the landlord to the tenant;

Term of lease The period of time for which the property will be leased to the tenant (including the commencement and expiry dates of the term);

Security deposit The sum of money to be paid by the tenant to the landlord and held by the landlord as security to ensure that the tenant performs its obligations under the tenancy agreement. The landlord is obliged to return the security deposit to the tenant less any authorized deductions upon the expiry of the lease term;

Payment Amount of rent, payment schedule, additional fees, and other payment details;

Use of premises What the property may be used by the tenant for;

Maintenance Who is responsible for maintaining the property, and other details such as how maintenance should be carried out;

Utilities Who is responsible for paying electricity, water, gas and telephone charges for the leased property;

Tenant’s covenants The tenant’s obligations to the landlord which are numerous;

Landlord’s covenants The landlord’s obligations to the tenant which usually consist of the obligation to provide quiet enjoyment to the tenant (see below for an explanation of what quiet enjoyment means) and to pay maintenance fees and property tax for the leased property;

Termination of lease The circumstances under which the lease may come to an end

Suspension of rent The circumstances under which the tenant need not pay rent

Notices When and how tenant and landlord should give notice to each other (see below for an explanation on what a notice is)

Default of tenant What happens if the tenant fails or refuses to perform his/her obligations under the tenancy agreement

Stamp fees Who is obliged to pay stamp fees on the tenancy agreement. The tenant is obliged to pay;

Applicable law and jurisdiction What law governs the tenancy agreement (for example, Singapore law)

Common Terms in Tenancy Agreements

Some of the common terms used in tenancy agreements with brief explanations of what they mean are set out below

Assignment

An assignment means a legal transfer of right(s) or obligation(s) to another. For example, if X is supposed to pay rent to Y, X has an obligation to pay rent to Y, while Y has a right to collect rent from X If Y assigns his right to collect rent to Z, he transfers the right to collect rent to Z. Thus, X now has an obligation to pay rent to Z, and Z has a right to collect rent from X. Tenancy agreements commonly contain a provision that prohibits the tenant from assigning the lease to another without the landlord’s consent.

Breach of contract

A contract is a term used to refer to a promise that is legally enforceable. For example, if X agreed to pay rent to Y, X actually promises to pay rent to Y. A breach of contract is when the promise has been broken. For example, if X agreed to pay rent to Y but fails to do so, he has breached the contract to pay rent.

Diplomatic clause

A diplomatic clause is a clause that allows the tenant to terminate the lease before the lease term expires without having to suffer any penalty. In cases where there is no diplomatic clause, the tenant may be required to continue to pay the agreed monthly rent even if he is no longer living there. The diplomatic clause thus protects the tenant from such unnecessary payments.

However, this clause only allows premature termination of the lease if the tenant needs to leave the country permanently for work or if the tenant is deported from Singapore or not permitted to remain in Singapore and supporting documentary evidence will have to be provided to the landlord. Some diplomatic clauses may also stipulate that the right to terminate only kicks in after the lapse of a certain period of time of the lease term. For example, a diplomatic clause may provide that the tenant may only prematurely terminate the lease 12 months after the commencement of the lease term. An additional 2 months notice must be given to the landlord. If the tenant terminates the lease any time before that, the tenant may have to pay damages/compensation to the landlord for breaching the clause. A diplomatic clause is therefore particularly appropriate for foreigners working in Singapore since they could be required to be transferred overseas or their employment in Singapore may be terminated at any time.

Indemnity

An indemnity is a promise by X to pay for any losses that Y may suffer as a result of X’s actions. This appears most commonly in tenancy agreements in the form of a promise by the tenant to indemnify the landlord for any losses that the landlord may suffer due to the tenant’s actions. For example, if the landlord suffers penalties for breaching the applicable laws or regulations because the tenant improperly installed or carried out certain works, the tenant will have to pay the landlord the sum that the landlord was penalized.

Notice

Notice refers to the communication of a certain fact within a stipulated period of time. The purpose of notice is to give the other party advance notice of your intentions, especially when your actions may affect them. This term usually appears in termination clauses which stipulate that the tenant or landlord must give to the other a certain number of months’ written notice of their intention to terminate the lease. For example, if the tenant wants to terminate the lease at the end of December, and the tenancy agreement requires 3 months’ notice to be given, the tenant must give the landlord notice of his intention to terminate the lease latest by October.

Quiet enjoyment

This refers to the landlord’s obligation that the landlord (and those lawfully claiming under him/her) will not disturb the tenant’s occupation, use and enjoyment of the leased property. It should be noted that the term “quiet enjoyment” does not refer to the absence of noise at or around the leased property.

Right of re-entry

A right of re-entry clause gives the landlord the option to re-enter the leased property, take over possession and terminate the lease if the tenant breaches the terms of the tenancy agreement. Tenancy agreements commonly provide that the right of re-entry may be exercised by the landlord when the tenant fails to pay his rent. In such cases, the landlord has the right to re-enter the leased property after service of a notice to the tenant to rectify his/her breach(es) and failure by the tenant to rectify the stipulated breach(es), and the act of re-entry effectively terminates the lease.

Waiver

A waiver is an act which shows one party’s intention to give up his right to claim against another party for that party’s breach of obligations. For example, if the tenant fails to pay rent for a month, the landlord may gratuitously decide to waive the breach after finding out that the tenant was going through financial difficulties. The landlord may not in the future change his mind and decide to claim the money from the tenant. Because this entails giving up a right, a waiver must be so clear that it could objectively be considered to have conveyed an intention to give up a right. Any waiver should therefore be in writing. The term “waiver” is commonly found in waiver provisions in tenancy agreements which provide that any delay or omission by the landlord in enforcing its rights against the tenant does not amount to a waiver by the landlord of those rights, and that where the landlord waives any breach by the tenant, it does not mean that future or similar other breaches by the tenant are also waived.

Leasing out your property in Singapore? Speak with Jacq today.

About The Author

With more than 10 yrs of experience in leasing, Jacq has been entrusted by many landlords to lease out their property. She takes pride in providing prompt service and helping Landlords to avoid pitfalls when leasing out their properties. Read testimonials by clients.

Jacq has also specially curated a Tenancy Agreement that is drafted in Layman Terms so that both landlords and tenants are clear on their obligations and clauses. 

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A Detailed Inventory List with photos will be provided upon handover of premise to the tenant. She also assist in managing tenant's and landlord's enquiries throughout the lease. 

Call Jacq Ng at 97642556 to help with the leasing of your property.