I never thought that I will be in the market for a private property.
In Singapore, 80% of the population lives in public housing. The term doesn’t have a good reputation in most countries, but I will say in Singapore, it is commonly accepted as the first property you will buy to start a family.
Public housing in Singapore are fairly high quality, subsidised housing provided by the government.
Due to scarcity of land, you are only allowed to buy a public house if you are married, or are above 35 years old.
Private properties have no such restrictions, but they are more expensive.
In any case, I suddenly find myself hunting for an entry level private property. I never thought that I would be doing that, as I have always assumed that property investment is a term reserved for the truly rich, those earning 5 figures monthly or have an inheritance.
Most Singaporeans are fairly well to do, perhaps not as crazily rich as the movie suggests but generally ok.
But then I realised that with savings after working a number of years, plus a consistent salary, I can afford the down payment and get a bank loan that enables me to be a private property owner, and gradually pay for the property each month.
I have little intention to live in the property. That will be quite costly and it is hard for me to justify that. The money will be more well spent putting into stocks or giving to my parents who works hard and saves hard.
It will be a good chance to learn about investing, and being a good landlord to tenants.
Singapore is an attractive place to work in for all nationalities. We are powered by English. We have great weather. Taxes are generally ok. People want to work here. So as long as the economy is strong, the tenant pool should remain a decent size.
Obviously I am not the first to realise this. Lots of Singaporeans are already aware of this. Which is probably why most of them are well to do.
So our government has introduced lots of cooling measures, such as additional taxes for owners of multiple properties, with a higher amount for foreigners.
Hunting for properties is pretty fun. There are lots of learn. Stuff like – is it leasehold or freehold, how many years since completion, what is the price per square feet vs other properties in the area, what are the development plans in the area, is it near a train station, what is the maintenance fee, what is the expected rental yield.
These are all things that I didn’t know about a month ago.
Other than researching on properties, you will also need to know about the governments policies and additional costs as well, with all the stamp duties, lawyer fees, banker fees, agent fees adding to your total purchase price.
Of course, most of these are necessary costs. I will gladly pay a lawyer to look through legal documents for me, than risk losing more if there are anomalies in a contract.
Loans is another headache. Should I go for fixed interest rate, or risk market violatility with a floating rate. Some say it doesn’t really matter. Shrugs.
You may want to consider feng shui too. Whether you believe in it or not, the next buyer might, so you will want to get something good.
There are tons of books and websites out there to help new property investors like myself. Most of them are not useful to the Singapore market, though you can still learn the general concepts I suppose.
Check out sites such as propertyguru and srx to research on properties in Singapore. It’s fun, like online window shopping. Just that now you actually learn something useful each time.
Visiting showrooms and unit viewing is fun too. I get to check out beautiful houses which are totally different from those I have stayed in. It opens up my world.
Property cycles will affect the profits you make. So do take note, though predicting it is never easy.
I wish you all the best in your research.