Shall we merge this blogpost with the Gabbar post?

3BR, up to 1200 sqft. launched in 2019, 1BR and 2BR all sold out. 99Y lease.

3min walk to MRT after new road. I guess the new road has increased the value.

— rental yield .. is better for small units
Raymond said NGRY is well below 2% (3k+/M) as one rental unit, but he said up to 9K/M is possible in co-living [up to 5 small rooms in 43R]. I said most owners are not keen about the extreme 43R style.

Now I think 9K is barely achievable. More realistic is 4k/M.

Raymond confirmed my hypothesis that 43R arrangement can achieve 2-3 times rental compared to renting out to a single family. When I first analyzed 43R for U.S. and Sg, I was initially doubtful.

— risks?
LIR risk … Kevin felt Singapore LIR will remain lower than elsewhere
NAV risk .. Kevin said this is home, not investment.

He felt NAV won’t grow much, even though I said the main attractiveness (of this asset class) is windfall appreciation.

— Main push-factor — 租不起. $3k/M for a 400+sqft condo in Kovan.
Wife is more keen than husband.

If they leave SG, then they plan to rent out. We both felt the bigger units are harder to rent out.

— stamp duty .. [ABSD + BSD] is in the middle of 8 and 9%
https://www.moneysmart.sg/home-loan/stamp-duty-calculator shows $2.6M unit would incur 8.4%+ in total stamp duties.

OnePearlBank price list shows 2.6M, reported to be 3M including stamp duty.

For Umesh, transaction price is 1.30M, and total stamp duty around 7.8%

— 30Y loan. Kevin said monthly installment is probably $7k+ estimated based on 1% LIR. I know he is precise. Confirmed loan quantum > 2M
My wife posed the question “What if Kevin or his wife loses job and must deplete their savings to meet a stringent $7k+ monthly commitment?” Note mortgage commitment is the most stringent among all commitments:

• In contrast, tax payment can be delayed, with interest as penalty. Tax authority can’t confiscate your properties
• In contrast, credit card bills are stringent and the lender can threaten to come to your home and take your posessions, but not take your entire house
• In contrast, If you don’t pay utility bills, you would lose power/water/gas, but usually you can survive.

Dangerous low ground(easily flooded)…. If I were him, I would build up a contingency reserve of 6M to 12M x monthly installment amount. After that, pay down the outstanding amount, but that would defeat the purpose of “max quantum”. Kevin probably wanted the max, perhaps similar to Delphia Lim (Hui Ying?) described in https://tanbinvest.dreamhosters.com/26043/sg-home-buyers-max-out-mtg-quantum/

In fact, I’m also planning to postpone the PRP or cpf housing refund, so as to max out the free cash on hand. The motivation is … investment.