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Hi All,

Here is the scenario: A S'porean couple with 5 rm HDB flat (still outstanding HDB loan and yet to be MOP) intends to have passive income for long term after reaching MOP.

Which is better for investment/good returns?

a: Buy a re-sale condo and immediately rent out to service the loan and how much does bank gives out such loan?

b: Buy a new launch condo and wait for TOP to rent out or sub sell it?

Option A or B?

How much capital (total cash in hand) does a couple need to start of such investment if their combine income is only $4K and the condo price is btw $800K & $1mil?

Suggestions pls...
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1 Answer

Mike Lim
Replied
Afternoon Mahony,

Upon fulfilling MOP, with existing mortgage loan, bank can disperse max of 60% loan where 10% must be cash and 30% can either be in cash or combination of both. Do also note that you are also required to set aside the CPF minimum sum if you intend to use it for your second property. If you are PR, you are liable for ABSD on your second property.

To purchase either resale or new launch, it's not advisable to sell within 4 years as you will be liable for SSD of 16% to 4%, depending on which year you are selling. Resale property have bigger area size and can generate rental income as soon as you are the owner. You can even purchase unit with tenancy agreement. New launch which might be cheaper, have a waiting period where you have to pay the installment from your pocket. Either way, holding power is the main key.

As to how much capital you require, it would be dependent on how much available CPF OA and cash you have in hand, how much the bank can loan to you and the actual price of the property you are looking at.

FYI
Mike Lim
 96929209 
CEA Reg No: R026708F
Email add: m52i@yahoo.com
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