I gave the UOB investment adviser an illustration.
Looking at Rahul, P.Mullins, my sister etc — Capable professionals, but their level of minimum burn rate creates a long-term (if not permanent) burden on their shoulders. I think one of them might say that if no chocie, then he would be able to cope with a barebones burn rate like $3k/M, but I am not so sure.
I think the value-investing seminar target audience also feel a similiar burden — How the hell can I sustain my BASIC $2k/head family lifestyle if I don’t want to work so hard for 30Y and then sustain the same lifestyle beyond retirement? Their problem is really the burn rate.
In terms of burn rate, I’m blessed with a frugal wife, SG citizenship ..
— rental:
Contrary to some claims, the same price two studios are faster to rent out than a 2BR. Now I feel it’s “much faster”.
Perhaps 2BR has better windfall potential but windfall takes a long time, and at this stage of my life I care more about current income, as long as NAV is not sacrificed.
The current income should come from “free cash flow”.
— resale: I have the same bias. See Cambodia residential properties for China investors #XR
I feel location is the real deciding factor of rental demand. I think I really need to stay close to the rail stations. Deepak CM said the same. Location could mean 10% vs 50% vacancy rate.
Dropping your asking price may not work. Bargain hunter tenants might be fine people, but there’s a higher probability of problem people.
The low-rent tenants often don’t have a car. I guess 10 minutes walk is the max. Most won’t use a bike.
Streets need to be relatively clean and safe.
Close to park? not important to most tenants.
https://www.zillow.com/rent-vs-buy-calculator/ is a nice graph Rahul showed me. It shows inflation !
2.5k can rent a nice small home in a reasonable location outside the luxury /belt/ like JC waterfront. With sublet I could take up a 3k house and collect 1k rental.
In contrast, if buying a 700k home, total burn rate could be 5k. Basically, high mtg and tax rate is applied on a big home value.
I told my friends that 43R generates 15k/M gross rental. All of them seem skeptical. I think they are used to 2FH PGRY of 10%. Their doubts include
https://www.newretirement.com/retirement/average-retirement-income/ has some data
— XianHua said a U.S. retiree in his situation
Sg offers a more affordable retirement, in terms of Melvin3.
== 2020 data:
The Pension Rights Center reports that: “Half of all Americans age 65 or older have total incomes of less than $25k a year”, presumably including SSA + 401k + pension + work.
Are $0 data points included? Probably Yes.
Note the Census shows HRI (“household retirement income”), without explaining. If a household has 1 retiree and 1 working, then I believe HRI would only include the retiree.
— SSN: cost of living adjustment raised the average monthly SSA (Social Security payment) for retired workers to $1,503 in 2020 from $1,479 in 2019. I assume this average ignores those receiving $0.
== 2019 data:
In 2019, 2020 and 2021, the Pension Rights Center estimated that that most older adults have little in savings [including 401k, excluding pension, SSA]. Only 66 percent receive income from financial assets. Half of them (i.e. 33 percent of total) receive less than $1,754 a Year (not “month”)
The median savings among baby boomers is $152,000 per person.
— Social security payout, in comparison
“Average monthly Social Security payment for retired workers is $1,461 in 2019.” I assume this ignores those invisible retirees receiving $0.
Median is unspecified, most likely lower than Mean. I assume a large number of monthly amounts are small amounts.
I like YH’s question.. practical question — “When my son goes to college, Should I cash out the RegoPark studio to help him pay for an Ivy-league degree, or let him keep the property?”
YH feels the cash-out route is not great ROI. YH felt that with a prestigious degree his son may be able to earn a bit higher, but those kids from lesser-known colleges also have some opportunities, possibly fewer. The house, if not sold, can help relieve the housing pain when he starts working in the tri-state region.
The house may appreciate over 4 years.
https://tanbinvest.dreamhosters.com/2019/01/07/spending-250k-on-top-college-but-your-kids-arent-more-success-than-his-colleagues/ is a blog I wrote on a related topic.
99% of U.S. houses and most 2-3 BR condos are oversize but fairly acceptable.
I saw a Tudor style brick house for sale $540k, close to 100 Hillside Ave. 1825 sqft for a couple with a baby. 3 bed rooms, each big enough for a queen bed. There’s a big dining room + living room…. Completely unnecessary for me.
The “extra” space requires
Why not save the $200k (or whatever) and use it on