A Modern Resort Project

[Dr.Anarchy 0]

As a first-time flat owner and just got married, I think it is a good idea to start a new topic by me to share what I have gone through. My experience and what I can highlight in my journey so that future home owners can benefit from here. Also I will not be listing down electronics model as a year later, technology improved, this thread is no longer valid.

I have reserved the first 10 posts for mine input.

While searching for a resale flat...

1) We asked our self how much do we have to renovate and do furnishing. Even you have decided a 30K for example, buffer another 15% - 20% for hidden cost. Why renovation cost is the first question we asked is because it will directly affect your COV budget.

For this blog, I'm focusing on minimum COV and full renovation.

Setting a budget for renovation, furnishing and COV is very important. It should be discussed way before you start to look for a flat which will reduce quarreling and financial headaches in future. We planned and took 2 years to plan to ensure we have a healthy budget and no loans.

2) Ask yourself how long do you intend to stay in this flat? This will affect the type of material used for your renovation. You can buy the best for everything but you will only be staying there for 5 years? The next owner will most likely tear down everything again as its not to their preference. Renovation is just like buying a car, it is only depreciation over the years. How much are you willing to let it depreciate.

This is important as well, because when all renovation is done, you can work backwards base on depreciation cost and see what is your minimum COV you need to ask for when you sell your flat.

3) Look at all walls and see if there is any water seepage. Some walls can be very "wet" as it is a corner unit which the wall outside your flat is expose to rain etc. Take note that it can only be fixed when HDB do block painting. Some new owner may not like the fact that the bomb shelter have a high level of moisture. You will have a problem storing your dry items in it and constantly need to use hippo to reduce the moisture.

4) Look at the pipes. You may want to box them up but if the pipe is in a weird position, it may affect your design and rainshower. I have seen bathroom's shower area with huge pipe that can be pretty unsightly. Sometime I really wonder how those architect design our flat.

5) Fengshui. If you believe in fengshui. Get your master to go up and do a site inspection before you place your deposit! I repeat again, always get fengshui master to go up before you place deposit. You don't want to buy a flat and later he tell you, okay bad house, you need to tilt the door. When possible buy a house that requires no tilting. Likewise, since you are shopping for something, why buy something that has defects? We can't find a perfect house but at least the main thing in fengshui is decent.

6) Not mandatory if you belong to those who enjoy moving house every 5 years. Planning of kids and their school. If you belong to those who want to send your kid to famous school in the next 6 to 10 years, buy a flat that is near that school. For myself, I bought a place that is next to a school. It is easier for the little one to go to school. Most importantly all of us don't need to wake up very early. I have seen kids waking up at 5am just to travel to school. Maximum for me is 5 minutes walking distance to school.

7) Near parents. Never belittle this. Think through this carefully. 10 friends/relatives of mine, I will say 5 of them after staying for couple of years, can't take the stress of staying too far from their parents after they have kids. This symptom only surface when you have kids. They sell off their flat, move somewhere close to their parents. Imagine you work late, out for D&D, movie and etc, who is going to look after your little ones?

House Protection Scheme (HPS)

I will not going into the lengthy process of explaining the resale transaction. Can easily find out more from HDB website. I want to highlight one area which I feel most owners will choose to ignore.

When you buy a HDB, you need to buy HPS. It is compulsory as most HDB officers will tell you. This scheme is offered by CPF and can pay using your CPF money so most will choose to just accept it since no need to pay any cash from our own pocket.

There is a few disadvantage of CPF HPS.

1) Most or all of us will move house at least once. For example, a young couple age 28 just bought their first house. Be it BTO or resale and they are healthy, no existing illnesses and they chose CPF HPS. 5 to 10 years later, they sold off their place and bought another resale flat. They have to repurchase the HPS again and whether they are accepted depends on whether they have any medical conditions during the 5-10years period.

CPF HPS is non-portable. You can't bring the insurance with you when you buy a new house.

2) CPF HPS is base on decreasing term insurance policy which means if your first house is value at 300k. The insurance bought at the first month is 300K, 2nd mth may be 299.5K and so on. Don't get me wrong, I'm not saying decreasing is no good. Its one of the better plan out there if one can manage his/her investment well.

3) Touchwood. If anything happen to one partner, the payout is payable to HDB, in another words, from left pocket to right pocket. You will not get a single cent from the policy.

Now the Advantage of CPF HPS.

1) Payable using CPF cash.

Did you know......

1) I believe most of us here do have your own private insurance be it term or life policy. If your private policy coverage is high enough, you can request for HPS exemption. For example A have a personal insurance of 300K. He can use that policy to request not to take up HPS.

Form can be found here: FORM HPS/2: Application for Exemption from Home Protection Scheme (HPS)

http://mycpf.cpf.gov.sg/Members/Gen-Info/F...f-forms-mbr.htm

For those who don't have any insurance policy. I will suggest looking into term insurance. The cost is low, high coverage and for a period of time, say 20 to 30 years. Reason why I suggest this is, it can get exempted from HPS, very decent coverage at low montly cost. I'm not sure how many here will agree that at our younger age between the age of setting up a family till your kids are old enough to feed themself, our liability is a decreasing term. At the age of 60, our liability should be clear by then. I will not go into life insurance as personally I have my reservation on this and I don't want to turn this thread into a insurance thread.

To sum it up.

CPF HPS

Advantage:

1) Payable using Cash

Disadvantage:

1) Non-portable to your 2nd house

2) Able to purchase again if you don't have pre-existing medical condition at the point of buying.

3) No cash payment. It is payable to HDB only.

4) Decreasing term

Private Insurance or HPS

Advantage

1) Payment in Cash. You can use it to pay your house or other liability leftover by your spouse.

2) Payout is not decreasing term. If you take 300K policy, it will be 300K when you claim it.

3) Accept your medical condition. When you buy young, you are safe from future breakdown in health.

Disadvantage

1) Payable using hard cold cash.

2) Insurance agent reluctant to sell you term policy as the profit margin is low. Don't quote my word for it as this is what I observe.

Edited November 25, 2010 by Dr.Anarchy

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[rickoveron 0]

Those are excellent observations. However i beg to differ on having a FS master follow u around while house searching, one being the cost, another being one should be able to feel the synergy of the house while viewing.... good or bad, our inner feeling should be quite accurate.

Other than that, the above are all sound advices; especially being near to parents.

[Dr.Anarchy 0]

rickoveron,

For FSM is just a reference as I do notice that most people only audit after they get their keys and when FSM said negative thing about the flat, we don't like to hear that. Still remember the ad on one radio station, we only like to hear the good things.

Not to discuss too much on FS, its just for those who are particular about tilting their door. As I see that as the main thing in FS.

[leechaorui 2]

As a first-time flat owner and just got married, I think it is a good idea to start a new topic by me to share what I have gone through. ..

For myself, I bought a place that is next to a school. It is easier for the little one to go to school. Most importantly all of us don't need to wake up very early. I have seen kids waking up at 5am just to travel to school. Maximum for me is 5 minutes walking distance to school.

7) Near parents. Never belittle this. Think through this carefully. 10 friends/relatives of mine, I will say 5 of them after staying for couple of years, can't take the stress of staying too far from their parents after they have kids. This symptom only surface when you have kids. They sell off their flat, move somewhere close to their parents. Imagine you work late, out for D&D, movie and etc, who is going to look after your little ones?

What happens if parents place is far from school that you wish to send your kids to?

[Dr.Anarchy 0]

Take the middle of both lor