Shd I Sell Or Rent Out My Hdb After Buying Condo?

[musicbox 0]

Hi all,

I need advice on this issue, I hope those HDB upgrader like me can advise me.

I'll be buying a condo, currently i stay in a 3 room flat, this flat can fetch $1800 - $2000 rental per mth and if i sell it is around $300,000.

I need to borrow about $500,000 for my condo if i were to rent out the hdb and $200,000 if I were to sell off the HDB.

I wonder what are the things i need to consider between this 2 options (e.g. property tax, tax on rental, interest on the new mortgage) and should i rent the 3 rooms out or sell it off?

Thanks!

[kellogs 0]

Hi all,

I need advice on this issue, I hope those HDB upgrader like me can advise me.

I'll be buying a condo, currently i stay in a 3 room flat, this flat can fetch $1800 - $2000 rental per mth and if i sell it is around $300,000.

I need to borrow about $500,000 for my condo if i were to rent out the hdb and $200,000 if I were to sell off the HDB.

I wonder what are the things i need to consider between this 2 options (e.g. property tax, tax on rental, interest on the new mortgage) and should i rent the 3 rooms out or sell it off?

Thanks!

keep the flat as this is a right for Singapore citizen only plus the rental yield is pretty good 1.8 to 2 /month

You could use the rental yield to pay for your condo mortgage.

[bepgof 20]

Hi all,

I need advice on this issue, I hope those HDB upgrader like me can advise me.

I'll be buying a condo, currently i stay in a 3 room flat, this flat can fetch $1800 - $2000 rental per mth and if i sell it is around $300,000.

I need to borrow about $500,000 for my condo if i were to rent out the hdb and $200,000 if I were to sell off the HDB.

I wonder what are the things i need to consider between this 2 options (e.g. property tax, tax on rental, interest on the new mortgage) and should i rent the 3 rooms out or sell it off?

Thanks!

Factors to consider:

1. 3rm HDB fully paid? If not, how much is monthly instalment.

2. Monthly income? Existing OA how much, amount to OA monthly how much?

3. Loan 500k, 30 yr, interest 2.2%, monthly instalment =$1898.50

- cpf can pay how much

- cash how much

- provided interest stay at 2.2

4. Loan 200k, 30 yr, 2.2%, monthly=$759

- Want to pay this amount for 30 yrs? Now how old?

5. Property tax, 1st @4% at annual valuation, 2nd @10%

-5rm hdb annual valuation now at 90,000, 4% = 3600 per yr, 10% = 9k per yr.

-1270sft, 4yr old @ bedok reservoir @ 150,000,4%=6000 per yr.(must stay there to have 4%)

6. Make sure bank wants to lend you 500k.

7. Have u included the stamp duty of condo?

8. 5% (cash) +15%(cash or cpf)+Stamp(3% of condo-5400)(cash or cpf)+.......

9. 15% needs to be paid within 14 days for "ready built" condo

10. 15% needs to be paid within 6-8 wk.

11. If cannot loan the money required & cancel the "buying", 5% bye bye.

Any more?

Edited June 9, 2010 by bepgof

[random_username 0]

keep the flat as this is a right for Singapore citizen only plus the rental yield is pretty good 1.8 to 2 /month

You could use the rental yield to pay for your condo mortgage.

to OP, just curious and if you don't mind me asking, what is the hypothetical rental yield for the condo in comparison?

Edited June 9, 2010 by random_username

[Fourth 0]

Hi all,

I need advice on this issue, I hope those HDB upgrader like me can advise me.

I'll be buying a condo, currently i stay in a 3 room flat, this flat can fetch $1800 - $2000 rental per mth and if i sell it is around $300,000.

I need to borrow about $500,000 for my condo if i were to rent out the hdb and $200,000 if I were to sell off the HDB.

I wonder what are the things i need to consider between this 2 options (e.g. property tax, tax on rental, interest on the new mortgage) and should i rent the 3 rooms out or sell it off?

Thanks!

I presume you are buying a condo and choosing to stay in the condo anyhow, and your question is solely if you should keep the HDB to rent or sell it off.

- If your have good holding power with reason cash stash. Just make sure you can survive the periods that the HDB cannot find tenants. In worse case, holding power on possible job loss (touch wood!). Properties is not very liquid, so if prices do drop, you must be ready to hold both yr private and hdb through the down times. Then renting the HDB is definitely good in long run (better yield than getting another private to rent).

P/S: Will assume that you have already done your checks with banks on loan, HDB on approval to rent, etc so will not dwell on those. You may want to check also if 3 room rentals are easy to rent out in yr area.

Cheers.

[leechaorui 2]

As HDB is primarily meant for owner occupation rather than help owner collect rental, I don't know if renting HDB to collect rental and staying in condo is allowable by HDB. You may want to check with HDB.

[bepgof 20]

Factors to consider:

1. 3rm HDB fully paid? If not, how much is monthly instalment.

2. Monthly income? Existing OA how much, amount to OA monthly how much?

3. Loan 500k, 30 yr, interest 2.2%, monthly instalment =$1898.50

- cpf can pay how much

- cash how much

- provided interest stay at 2.2

4. Loan 200k, 30 yr, 2.2%, monthly=$759

- Want to pay this amount for 30 yrs? Now how old?

5. Property tax, 1st @4% at annual valuation, 2nd @10%

-5rm hdb annual valuation now at 90,000, 4% = 3600 per yr, 10% = 9k per yr.

-1270sft, 4yr old @ bedok reservoir @ 150,000,4%=6000 per yr.(must stay there to have 4%)

6. Make sure bank wants to lend you 500k.

7. Have u included the stamp duty of condo?

8. 5% (cash) +15%(cash or cpf)+Stamp(3% of condo-5400)(cash or cpf)+.......

9. 15% needs to be paid within 14 days for "ready built" condo

10. 15% needs to be paid within 6-8 wk.

11. If cannot loan the money required & cancel the "buying", 5% bye bye.

Any more?

Some more here:

1. Monthly maintenace - depend on # of share, can easily hit $300 a month for a 90sqm 99 yr LH with "quite some facilities", more failities, more ex, less resident more exce, FH usually more ex than LH cos of # of residents.

2. For kiasu , apply a 60%:40% rule. 60% is your ready cash + CPF, 40% is the loan amount.

3. Watch out for cpf minimum sum rule if were to hold 2 or more properties at same time.

4. Monthly utilities bills? say $150

4. So, assume you buy condo & keep hdb 3rm, 500k loan for 30yr@2.2% interest rate, monthly cashflow likely to be as follow:

Cashout: 1898.5+300+(6000/12)+150 = 2,849

Cash in: 2000 from rent yield + monthly salary wage

Monthly payment = monthly salary wage - $849.

Wow lau, can quickly go & buy already and rent out the 3 rm!

Provided:

- interest rate stay @ 2.2%

- Can rent out 3rm, all the way while staying in condo

- Steady wage

- Some other expenses, family?

- Other liabilities, like car loan, reno loan, all the loans

- Any "insurance" to pay?

- Too many to list here

Edited June 10, 2010 by bepgof

[forgotten 1]

As HDB is primarily meant for owner occupation rather than help owner collect rental, I don't know if renting HDB to collect rental and staying in condo is allowable by HDB. You may want to check with HDB.

Well, renting of the HDB unit is allowed if its MOP has been fulfilled. Many people are doing it

Edited June 10, 2010 by forgotten

[bepgof 20]

As HDB is primarily meant for owner occupation rather than help owner collect rental, I don't know if renting HDB to collect rental and staying in condo is allowable by HDB. You may want to check with HDB.

NOW can do this.

This "model", among many others, has been put in "simulator" with "results" generated, acc to an insider from TMHG. It is a matter of time and need, the simulator to be swapped with actual reality. To reveal more: will be a step-by-step legislation change. Whoever want to rent quickly do so before too late.

Edited June 10, 2010 by bepgof

[Warrior88 0]

bepgof had list up a long list for your consideration.

I am all in for HDB rental, stay in pte if within your means.

Rental yield is definitely better for HDB.

Borrow when you are young, spend your own money when you are old cos nobody will loan to you by then.

By the way, you can still sell one of your hse 2 yrs later to paid up your loan after collect 2 years of rent

[blueocean 0]

A bit similar to buying/selling shares except that properties are less liquid. When you collect rent, it is like collect dividend ....

So whether you are going to rent or sell, it is like asking the question - should i hold or sell my shares ...

bepgof had list up a long list for your consideration.

I am all in for HDB rental, stay in pte if within your means.

Rental yield is definitely better for HDB.

Borrow when you are young, spend your own money when you are old cos nobody will loan to you by then.

By the way, you can still sell one of your hse 2 yrs later to paid up your loan after collect 2 years of rent

[bepgof 20]

A bit similar to buying/selling shares except that properties are less liquid. When you collect rent, it is like collect dividend ....

So whether you are going to rent or sell, it is like asking the question - should i hold or sell my shares ...

What if stock get delisted from the Exchange?

Edited June 10, 2010 by bepgof

[blueocean 0]

Under the Land Acquisition Act,

"5. —(1) Whenever any particular land is needed —

(a) for any public purpose;

(b) by any person, corporation or statutory board, for any work or an undertaking which, in the opinion of the Minister, is of public benefit or of public utility or in the public interest; or

© for any residential, commercial or industrial purposes,

the President may, by notification published in the Gazette, declare the land to be required for the purpose specified in the notification. "

So land acquisition is the equivalent of delisting from the stock exchange.

What if stock get delisted from the Exchange?

[forgotten 1]

Natural disasters can also cause delisting. Houses can 'delist" from the ground.

Edited June 10, 2010 by forgotten

[bepgof 20]

Under the Land Acquisition Act,

"5. —(1) Whenever any particular land is needed —

(a) for any public purpose;

(b) by any person, corporation or statutory board, for any work or an undertaking which, in the opinion of the Minister, is of public benefit or of public utility or in the public interest; or

© for any residential, commercial or industrial purposes,

the President may, by notification published in the Gazette, declare the land to be required for the purpose specified in the notification. "

So land acquisition is the equivalent of delisting from the stock exchange.

Hi BO,

Both experiences tell me buying/selling/holding property needs more "study" before the "strike" than as compared to stocks. Again, history & experence taught me to avoid buying following counters/stock:

-hotel

-mfg

-TSC

-Mult

-Cons

-Serv

-Sgr

-Com

Concentrate on FIN & Proty.

Property: I try the "EAST" first. Have been in the east since born, die must be in the east - come from dust, goes to dust.