How to own a property when my household income is net $4600

With rising costs and increased learning needs, financing our children's education is no longer a simple walk in the park. Discuss with other parents about how they are managing their finances to cope with their expenses.

How to own a property when my household income is net $4600

Postby dreamrat » Tue May 24, 2011 11:39 am

After reading this thread, I realised that there are a lot of you have the money work for you. e.g. got property to rent out for passive income.

We only save 40%. Currently, I am staying in HDB with approx 200k loaned from HDB.

Pls advise me is it possible for my money to work harder to buy a second property (e.g. condo) :sweat:

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Re: How to own a property when my household income is net $4

Postby financial_guru » Tue May 24, 2011 10:07 pm

dreamrat wrote:After reading this thread, I realised that there are a lot of you have the money work for you. e.g. got property to rent out for passive income.

We only save 40%. Currently, I am staying in HDB with approx 200k loaned from HDB.

Pls advise me is it possible for my money to work harder to buy a second property (e.g. condo) :sweat:


I suggest you pay off your existing 200k loan 1st. If you take a 2nd loan now to get a condo, you can only borrow up to 60% of the condo value. (Ex: If yr condo costs $1 million, you need to cough up $400k downpayment)

Get rid of your existing debt 1st!

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Re: How to own a property when my household income is net $4

Postby jojo » Tue May 24, 2011 10:14 pm

Hi orangebelt

I had fully paid my hdb flat is it i can keep my hdb and buy a condo now? An agent said that i can keep hdb for rental n invest in a condo. Is it a good advice?

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Re: How to own a property when my household income is net $4

Postby financial_guru » Tue May 24, 2011 10:22 pm

jojo wrote:Hi orangebelt

I had fully paid my hdb flat is it i can keep my hdb and buy a condo now? An agent said that i can keep hdb for rental n invest in a condo. Is it a good advice?


You referring to me? I'm financial guru :roll:

Can I check whether you have other assets like shares, unit trusts? Property is another asset class you can invest in, but make sure not all yr eggs are in the property basket.

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Re: How to own a property when my household income is net $4

Postby jojo » Tue May 24, 2011 10:40 pm

Oop! Financial Guru, Yes, my question is meant for you. :nailbite:

How do we know when is the right time to purchase?
What are things we shld consider before committing an unit? age 43
We have viewed a condo at Pasir Ris and it value $1.04m and is facing west. mthly repayment is 3k basing on 1.02%.

both my hubby n i have shares and unit trusts.
What is the allocation you will allocate in each basket?

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Re: How to own a property when my household income is net $4

Postby financial_guru » Tue May 24, 2011 10:59 pm

jojo wrote:Oop! Financial Guru, Yes, my question is meant for you. :nailbite:

How do we know when is the right time to purchase?
What are things we shld consider before committing an unit? age 43
We have viewed a condo at Pasir Ris and it value $1.04m and is facing west. mthly repayment is 3k basing on 1.02%.

both my hubby n i have shares and unit trusts.
What is the allocation you will allocate in each basket?


What is the term of the loan the bank is offering you? If you're 43, some banks will loan you for max 20 years, since 25 yrs will overshoot retirement age of 65.

Pls don't use 1.02% interest rate, you get these kind of rates for 1st year only. You should assume higher rate of 3% to see if you can afford to pay the loan.
Based on 800K loan, 20 yrs, 3%, yr monthly repayment is over 4k!
I don't think the rental is going to cover yr loan payments!

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Re: How to own a property when my household income is net $4

Postby dreamrat » Wed May 25, 2011 11:18 am

financial_guru, I am 31 this year. My DH is 28.
The flat was purchased on Jan 2010. So, we still have to service it till Jan 2015 before we can buy a 2nd property.

After re-calculating, if I were to re-finance the HDB loan, i.e. using cash of $125k & all the balance in CPF O.A, I would be able to clear the HDB loan by Jan 2015.

1) If it were u, would u be topping up $125k cash?

2) After I repay all the loan in HDB, how much the bank will loan me? 80%? Thanks thanks

3) Additionally, i realised that I have less cash after the cash re-payment... So, I have to start saving again...Hopefully, after another 5 years, I will have more than $100K again...
Last edited by dreamrat on Wed May 25, 2011 1:36 pm, edited 1 time in total.

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Re: How to own a property when my household income is net $4

Postby jojo » Wed May 25, 2011 11:45 am

Hi Financial Guru,

More questions for you:)

Which is better investment if both ppty is 99 y lease? brand new or 20 y o ppty.
Friends told me brand new unit it might not the layout we see in the showflat plus we have to pay a premium price. As for old unit we can have a feel whether we are comfortable plus the facing of the unit. :xedfingers:
What is your thoughts?

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Re: How to own a property when my household income is net $4

Postby financial_guru » Wed May 25, 2011 2:00 pm

dreamrat wrote:financial_guru, I am 31 this year. My DH is 28.
The flat was purchased on Jan 2010. So, we still have to service it till Jan 2015 before we can buy a 2nd property.

After re-calculating, if I were to re-finance the HDB loan, i.e. using cash of $125k & all the balance in CPF O.A, I would be able to clear the HDB loan by Jan 2015.

1) If it were u, would u be topping up $125k cash?

2) After I repay all the loan in HDB, how much the bank will loan me? 80%? Thanks thanks

3) Additionally, i realised that I have less cash after the cash re-payment... So, I have to start saving again...Hopefully, after another 5 years, I will have more than $100K again...


For 1), the answer is it depends. If yr cash investment is getting a higher rate of return than yr HDB loan interest rate of 2.6%, dont pay up the loan too early.

For 2) Yes. Right now its max 80%, though I expect the value could drop lower, depending how khaw boon waan will change the housing rules to further cool the housing market.

For 3) answer is in 1) above.

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Re: How to own a property when my household income is net $4

Postby financial_guru » Wed May 25, 2011 2:07 pm

jojo wrote:Hi Financial Guru,

More questions for you:)

Which is better investment if both ppty is 99 y lease? brand new or 20 y o ppty.
Friends told me brand new unit it might not the layout we see in the showflat plus we have to pay a premium price. As for old unit we can have a feel whether we are comfortable plus the facing of the unit. :xedfingers:
What is your thoughts?


Well, firstly I wouldn't put my money in 99yr leasehold for investment, only to stay in or pass to kids. 99yr leasehold properties can be difficult to sell once the leasing duration goes below 60yrs.

I would not buy a 20yr property. That means there is less than 79 yrs left on the lease. Once the property goes below 60 yrs, the property becomes difficult to sell because of the CPF rules. If you need to sell to cash out, you'll need to find a cash-rich buyer and he will have the advantage to dictate the price you get.
There could be estate maintainance issues also unless you're speculating for en-bloc, which I advise you not to do so. Its like gambling.

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