Asked by Anonymous
Hi, can anyone share w me what is the pros of investing in residential ppty for rental as compared to say placing the funds in the sti etf, other than using leverage to grow ur assets, or the can touch, can feel factor, or to hao lian to relatives during cny?
So far i dont find rental yield of pte ppty attractive enough for me to consider plonking my moolah in..
1) first n foremost, ppty is illiquid compared to say sti etf
2) it is also less diversified than say a world index fund..
2) double taxation of 10% for ppty tax and another 10% (roughly) for income tax (anyone who can afford a 2nd ppty probably earns upwards of 100k pa). And nt to mention half a mth of agent comm for 1yr lease, and maintenance and sinking fees upwards of 3k pa minmally. I reckon these 4 factors can easily eat up to 30 to 35% of rental income..
3) assuming a 3.5% rental yield, I will be lucky to get 2.5% returns back. In contrast, blue chips can easily get me 4 to 5% returns..
So far i dont find rental yield of pte ppty attractive enough for me to consider plonking my moolah in..
1) first n foremost, ppty is illiquid compared to say sti etf
2) it is also less diversified than say a world index fund..
2) double taxation of 10% for ppty tax and another 10% (roughly) for income tax (anyone who can afford a 2nd ppty probably earns upwards of 100k pa). And nt to mention half a mth of agent comm for 1yr lease, and maintenance and sinking fees upwards of 3k pa minmally. I reckon these 4 factors can easily eat up to 30 to 35% of rental income..
3) assuming a 3.5% rental yield, I will be lucky to get 2.5% returns back. In contrast, blue chips can easily get me 4 to 5% returns..
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