Discussion About Single & Hdb Flat Ownership + Hdb Loan (Compiled)

[thickhead79]

let me fair ok

 

as a buyer, u wan the price to go down

 

as a seller, u wan the price to go up

 

nvn end

[thickhead79]

Someone in Singapore dropped S$1.42 million on a five-room HDB resale flat in Toa Payoh in end-June 2023.

Singapore's most expensive five-room resale

This tops the S$1.418 million five-room HDB resale flat at SkyTerrace@Dawson sold in 2022, making it the most expensive five-room resale flat sold in Singapore.

[thickhead79]

International experience has shown that while rent controls may moderate rental increases for some tenants in the short run, they are likely to distort the housing market, National Development Minister Desmond Lee said in a written reply in Parliament on Jul. 3.

According to Lee, rent controls may inadvertently reduce rental supply, and cause rental housing demand to exceed supply, which could lead to issues of allocation and equity.

In addition, rent controls may distort property prices and disincentivise landlords from maintaining proper upkeep of their rental units.

Lee added that the government is "not closed" to any option however, and will continue to monitor the situation and adopt such measures as may be necessary.

[Guest guest]

On 7/3/2023 at 7:00 AM, keyboard said:

https://www.straitstimes.com/singapore/three-year-waiting-period-for-prs-to-buy-resale-flats

Yah, this 3 year thing started in Sept 2013 - not sure how many PRs there are in the market who are eligible today.

 

"There were 51,000 Housing Board flats fully owned by permanent residents as of end June, representing 6 per cent of all HDB flats, said Mr Khaw in a written parliamentary reply this month."

 

It's not even a loophole. If i'm a PR, won't it make more sense to buy somewhere (even though the price is higher but location is convenient for work/school etc) rather than paying rent, say 3k for a 3rm outskirt and get back nothing. Of course, don't buy those 50 years lease where you get back nothing. 20 years of rent would be 720k, how to depreciate a 80 years lease to lose that much. Wouldn't you jump on the boat if you can?

People always say don't buy old HDB cause you get back nothing. Thought you still get back the money you used from  your CPF to pay for your HDB if you sell your HDB, since all money spent using CPF must go back to CPF.

 

Anyway, if i plan to buy a 2 room flex when i reach 55 years old. Can i still buy old HDB since i will sell off the flat eventually? I think only if i stay in the HDB until i die then i get back nothing.

[Guest Ouch!!]

11 hours ago, thickhead79 said:

Someone in Singapore dropped S$1.42 million on a five-room HDB resale flat in Toa Payoh in end-June 2023.

Singapore's most expensive five-room resale

This tops the S$1.418 million five-room HDB resale flat at SkyTerrace@Dawson sold in 2022, making it the most expensive five-room resale flat sold in Singapore.

I saw several agents in my town have sealed more than a million dollars per single unit of 5-room flat or executive flats.   More than a million dollar or close to that amount is no longer rare.  Even one 3-room flat closed at 500K, which is rare but the ballpark point is still hovering around $450K

[Guest guest]

12 hours ago, Guest Ouch!! said:

I saw several agents in my town have sealed more than a million dollars per single unit of 5-room flat or executive flats.   More than a million dollar or close to that amount is no longer rare.  Even one 3-room flat closed at 500K, which is rare but the ballpark point is still hovering around $450K

3 rm flat closed at 500k must see the age of the flat. If the flat is those less than 10 year old and near to MRT, closed at 500k is not consider high. Unless the flat which closed at 500k is an old HDB, then it is high.

 

Those 3 rm flat in good location closed at least 600k to 700k plus.

[Guest HDB]

1 hour ago, Guest guest said:

3 rm flat closed at 500k must see the age of the flat. If the flat is those less than 10 year old and near to MRT, closed at 500k is not consider high. Unless the flat which closed at 500k is an old HDB, then it is high.

 

Those 3 rm flat in good location closed at least 600k to 700k plus.

Not that I know of

[Guest HDB]

On 7/4/2023 at 10:32 PM, Guest guest said:

People always say don't buy old HDB cause you get back nothing. Thought you still get back the money you used from  your CPF to pay for your HDB if you sell your HDB, since all money spent using CPF must go back to CPF.

 

Anyway, if i plan to buy a 2 room flex when i reach 55 years old. Can i still buy old HDB since i will sell off the flat eventually? I think only if i stay in the HDB until i die then i get back nothing.

Why not if you have the money? Just that you may not be able to take out a loan by then.

[Guest HDB]

2 minutes ago, Guest HDB said:

Why not if you have the money? Just that you may not be able to take out a loan by then.

Btw, short-lease 2-room flats cannot be sold on the open market

[keyboard]

On 7/4/2023 at 10:32 PM, Guest guest said:

People always say don't buy old HDB cause you get back nothing. Thought you still get back the money you used from  your CPF to pay for your HDB if you sell your HDB, since all money spent using CPF must go back to CPF.

 

Anyway, if i plan to buy a 2 room flex when i reach 55 years old. Can i still buy old HDB since i will sell off the flat eventually? I think only if i stay in the HDB until i die then i get back nothing.

Some scenarios. Assuming HDB sell to you at $500/mth = 99yrs lease is $594k

You buy a old 60 yrs flat at 400k, HDB say want to enbloc, pay you left 40 yrs lease = 240k (lugi 160k)

then give you new flat at HDB 99yrs price. You need to top up 354k. Depending on your age - you might not be able to get a loan.

 

If you buy a 50 yrs flat at 500k, stay 10 years, sell 240k. You take out more money than you put back into CPF (then 2.5% interest leh), that you need to lock-in if you don't have enough to transfer to Retirement Account.

 

So when you sell off at 60 (5yrs BTO), you agar agar know how much your flat can fetch you. If you buy 2nd owner just after MOP, you got 95 years to play with, you might not make such a big loss. At 55 years, the senior flat with 99 yrs lease at Tampines East? can cost as much as 600k for 2rm. And the number of years is not equal yearly, more expensive if you buy shorter lease.

[Guest Guest]

New record of $1.5m for HDB left with 48 years set.

 

HDB resale prices up 0.6% in June, sales volume at its lowest since February

 

 

[Guest HDB]

This is an article on "Most to Least Expensive 3, 4, and 5-room Flats in Singapore (Q1 2023)" dated 4 May 2023:

https://www.propertyguru.com.sg/property-guides/pgf-hdb-resale-flat-estates-price-most-expensive-cheapest-55414

[Guest guest]

On 7/6/2023 at 12:02 AM, Guest HDB said:

Not that I know of

You go see those newly MOP 3 rm flat in queenstown and clementi area. Price at least $600k.

[Guest guest]

On 7/6/2023 at 12:10 AM, Guest HDB said:

Why not if you have the money? Just that you may not be able to take out a loan by then.

2 room flex short lease for 55 year old, the owner is not allowed to take any loan, no matter it is HDB or bank loan. The flat needs to be fully pay by cash or thru CPF.

[Guest Guest]

On 7/3/2023 at 10:23 PM, thickhead79 said:

let me fair ok

 

as a buyer, u wan the price to go down

 

as a seller, u wan the price to go up

 

nvn end

 

Greed is greed.  No need to justify by saying it is fair or whatever willing seller/willing buyer.  

 

When the supply and demand is so skewed, it pays for the seller to be greedy.  Majority of the people are selling because they want to try for a record price.

[Guest HDB]

10 hours ago, Guest guest said:

2 room flex short lease for 55 year old, the owner is not allowed to take any loan, no matter it is HDB or bank loan. The flat needs to be fully pay by cash or thru CPF.

That's correct.

On 7/4/2023 at 10:32 PM, Guest guest said:

People always say don't buy old HDB cause you get back nothing. Thought you still get back the money you used from  your CPF to pay for your HDB if you sell your HDB, since all money spent using CPF must go back to CPF.

 

Anyway, if i plan to buy a 2 room flex when i reach 55 years old. Can i still buy old HDB since i will sell off the flat eventually? I think only if i stay in the HDB until i die then i get back nothing.

My reply of 7/6/2023 was referring to your query.

[Guest guest]

On 7/6/2023 at 6:53 PM, keyboard said:

Some scenarios. Assuming HDB sell to you at $500/mth = 99yrs lease is $594k

You buy a old 60 yrs flat at 400k, HDB say want to enbloc, pay you left 40 yrs lease = 240k (lugi 160k)

then give you new flat at HDB 99yrs price. You need to top up 354k. Depending on your age - you might not be able to get a loan.

 

If you buy a 50 yrs flat at 500k, stay 10 years, sell 240k. You take out more money than you put back into CPF (then 2.5% interest leh), that you need to lock-in if you don't have enough to transfer to Retirement Account.

 

So when you sell off at 60 (5yrs BTO), you agar agar know how much your flat can fetch you. If you buy 2nd owner just after MOP, you got 95 years to play with, you might not make such a big loss. At 55 years, the senior flat with 99 yrs lease at Tampines East? can cost as much as 600k for 2rm. And the number of years is not equal yearly, more expensive if you buy shorter lease.

I do not understand on the part of lock-in if don't have enough to transfer to Retirement Account? Looks like still not advisable to buy old HDB, esp if plan to sell and buy again. Unless i buy and stay until i die, maybe still can buy old HDB.

 

The new 2 rm short lease BTO i thought shorter lease would be cheaper than those 99 years lease, how come it is more expensive?

[keyboard]

When you sell your HDB, you need to return the fund back into CPF first right. Depending on your age, you need to set aside the Retirement Sum, it's not all the money can be used for the next flat.

You can't stay till you die, if they en bloc, they pay you market rate and you have to buy a new one and top up, or buy another resale with the same numbers of years left.

 

It is cheaper but not linear, the price is highest at 5-40 years, then depreciate. So you pay more at the front of the lease. Not every year is equal.

[Guest guest]

30 minutes ago, keyboard said:

When you sell your HDB, you need to return the fund back into CPF first right. Depending on your age, you need to set aside the Retirement Sum, it's not all the money can be used for the next flat.

You can't stay till you die, if they en bloc, they pay you market rate and you have to buy a new one and top up, or buy another resale with the same numbers of years left.

 

It is cheaper but not linear, the price is highest at 5-40 years, then depreciate. So you pay more at the front of the lease. Not every year is equal.

So it means that if i am getting the 2 rm flex at age of 55, even the HDB i sell, maybe only certain amount of money can be used for buying my 2 rm flex. Since i need to maintain certain amount of money for retirement account.

 

I think the chances of HDB get encloc is not high since there are so many old HDB around. So i might not get affected even i bought an old HDB and if plan to stay until die. Seems like really not easy to buy a house, because need to think of so many factors 10-30 years down the road. No wonder until now i still could not make a decision how HDB to buy.

[Guest Sigh]

17 minutes ago, Guest guest said:

Many factors 10-30 years down the road. No wonder until now i still could not make a decision how HDB to buy.

No need think so much. Most importantly got place to stay. HDB investment is near impossible given the high price and constant change in policy.  Enbloc is no longer a windfall because replacement of new BTO to you will make HDB loss money. So govt want u to top up or find a second resale flat to match the compensated sum and which means you will end up getting smaller flat than your existing one.  Nobody can monetise their HDB unless they opt for shorter lease BTO. Even those short lease pricing also based on market rate.

[keyboard]

It's not that difficult really. Assuming you are 35 this year, use the latest furthest announced full retirement sum then +4% yearly till 55 (minus what you already have in SA+4%/yr).

 

When buying older flats, look for those who have added an extra "room", or changed the toilet etc that kind, those won't be en bloc and is a depreciating asset till $0. URA website already have stated the land use in the next 10-20 years, if it's not tagged for redevelopment, it's very safe (e.g not near MRT, open space beside, < 3 bus stop away from MRT/malls etc). Estimate is like $500/mth for 3rm, bit more for 4rm etc (look at propertyguru for old flats in your desired area, HDB also got a map showing latest transacted prices with build year). 

 

It's definitely easy if you can spare a 100k (not counting inflation) cash at age 55 and don't mind the location. Depending on which land batch you reach 55, e.g. past few years was Tampines DTL (more expensive), Woodlands TEL (less expensive) vs these few years Tengah, Pioneer, sometimes Yishun. The take up rate for these sites are usually in the <2 or < 3 and >55 gets first pick, lower floor are cheaper but certain demographics live on lower floors if you have a preference.

[Guest guest]

13 hours ago, Guest Sigh said:

No need think so much. Most importantly got place to stay. HDB investment is near impossible given the high price and constant change in policy.  Enbloc is no longer a windfall because replacement of new BTO to you will make HDB loss money. So govt want u to top up or find a second resale flat to match the compensated sum and which means you will end up getting smaller flat than your existing one.  Nobody can monetise their HDB unless they opt for shorter lease BTO. Even those short lease pricing also based on market rate.

Agreed, no need think so much. Maybe i don't even have long life, just buy something that i like even it is an old HDB flat.

[Guest guest]

3 hours ago, keyboard said:

It's not that difficult really. Assuming you are 35 this year, use the latest furthest announced full retirement sum then +4% yearly till 55 (minus what you already have in SA+4%/yr).

 

When buying older flats, look for those who have added an extra "room", or changed the toilet etc that kind, those won't be en bloc and is a depreciating asset till $0. URA website already have stated the land use in the next 10-20 years, if it's not tagged for redevelopment, it's very safe (e.g not near MRT, open space beside, < 3 bus stop away from MRT/malls etc). Estimate is like $500/mth for 3rm, bit more for 4rm etc (look at propertyguru for old flats in your desired area, HDB also got a map showing latest transacted prices with build year). 

 

It's definitely easy if you can spare a 100k (not counting inflation) cash at age 55 and don't mind the location. Depending on which land batch you reach 55, e.g. past few years was Tampines DTL (more expensive), Woodlands TEL (less expensive) vs these few years Tengah, Pioneer, sometimes Yishun. The take up rate for these sites are usually in the <2 or < 3 and >55 gets first pick, lower floor are cheaper but certain demographics live on lower floors if you have a preference.

If have spare cash of 100k, should be able to get the new 2 rm flex BTO when reach 55. No need to worry on the certain amount of money for retirement account. 

 

I still think HDB would not SERS majority of old flat, no matter at which location. Esp if the location is not near to MRT. Probably i might ended up buying old HDB flat since i prefer location and amenity than buying those newly MOP resale flat but not so convenient location. Still looking at the moment.

[Guest HDB]

1 hour ago, Guest guest said:

If have spare cash of 100k, should be able to get the new 2 rm flex BTO when reach 55. No need to worry on the certain amount of money for retirement account. 

 

I still think HDB would not SERS majority of old flat, no matter at which location. Esp if the location is not near to MRT. Probably i might ended up buying old HDB flat since i prefer location and amenity than buying those newly MOP resale flat but not so convenient location. Still looking at the moment.

Why do you want to get a short-lease HDB 2-room BTO flat when you reach 55? The scheme is like a long-term rental agreement with full payment upfront. It cannot be sold in the open market. If you no longer wish to live in it, you can return the flat to HDB and HDB will refund the value of the remaining lease of the flat.

[keyboard]

Not much to look at right. In Singapore context, all the towns are built the same. Shopping malls carry the same brands. The services are more or less identical till even the food court sells the same type of food. Even if you look at pricing, 3rm flats in central vs ulu is 200k difference for the same number of years? Divide the number of years, then it doesn't look as much of a difference.

[kidster]

I heard a lot of variations about the age of the applicant and flat. 

 

Eg. Applicant's age must not be older than the flat.

 

Total no. of years of Applicant's age and flat age must not be more than 95 years.

 

Can someone explain what's this all about and the implications? I still don't get it. Thanks

[Guest guest]

11 minutes ago, kidster said:

I heard a lot of variations about the age of the applicant and flat. 

 

Eg. Applicant's age must not be older than the flat.

 

Total no. of years of Applicant's age and flat age must not be more than 95 years.

 

Can someone explain what's this all about and the implications? I still don't get it. Thanks

I always find the ruling and policy for buying HDB is quite complicated and confusing. I do not know why they cannot make it easier to understand and remember.

[Guest guest]

5 hours ago, Guest HDB said:

Why do you want to get a short-lease HDB 2-room BTO flat when you reach 55? The scheme is like a long-term rental agreement with full payment upfront. It cannot be sold in the open market. If you no longer wish to live in it, you can return the flat to HDB and HDB will refund the value of the remaining lease of the flat.

To get back some money when selling the current flat, stay a smaller flat for easy maintenance and get a new HDB, so thinking of buying a cheaper 2 rm rm when reach 55. 

[Guest Homework]

24 minutes ago, Guest guest said:

I always find the ruling and policy for buying HDB is quite complicated and confusing. I do not know why they cannot make it easier to understand and remember.

Because it involved your CPF funding (which affect your retirements), your housing history, your marital status,  your salary record,  your age.  Then,  it is further divided into matured and non-matured estate.  Within matured estate, it further devided into Prime location and the rules apply separately among the three.   Adding more complication is the age of the flat which affects the seller eligiblity to use CPF fund to buy resale flat.    There are also quotas for other races.

 

Buying house is not so simple, especially resale flat.  Those who already have flat, staying with good neighbours, good locations, good neighbourhood, best is to stay put.  If you sell, you may not necessary make  profit but ended up buying the wrong house at the wrong place.  

[Guest guest]

11 minutes ago, Guest Homework said:

Because it involved your CPF funding (which affect your retirements), your housing history, your marital status,  your salary record,  your age.  Then,  it is further divided into matured and non-matured estate.  Within matured estate, it further devided into Prime location and the rules apply separately among the three.   Adding more complication is the age of the flat which affects the seller eligiblity to use CPF fund to buy resale flat.    There are also quotas for other races.

 

Buying house is not so simple, especially resale flat.  Those who already have flat, staying with good neighbours, good locations, good neighbourhood, best is to stay put.  If you sell, you may not necessary make  profit but ended up buying the wrong house at the wrong place.  

This is why i said the rulings are so complicated and only HDB staff can understand. Even some property agents also don't know all the HDB ruling for resale.

 

Good surrounding neighbours difficult to find in nowadays. You might have a good next door neighbour, but you might have bad neighbour staying above your unit or same level as you but few doors away. Getting a good location or location that you like is easier. Buying new HDB or resale HDB is the same, you never if the house is wrong or neighbours are good only until you move in and stay. Even when buying resale HDB, during viewing no way you would know if the neighbours and neighborhood are good.

[Guest Guest]

2 hours ago, Guest guest said:

This is why i said the rulings are so complicated and only HDB staff can understand. Even some property agents also don't know all the HDB ruling for resale.

 

Good surrounding neighbours difficult to find in nowadays. You might have a good next door neighbour, but you might have bad neighbour staying above your unit or same level as you but few doors away. Getting a good location or location that you like is easier. Buying new HDB or resale HDB is the same, you never if the house is wrong or neighbours are good only until you move in and stay. Even when buying resale HDB, during viewing no way you would know if the neighbours and neighborhood are good.

Why must you demonized others? 

 

For a person who had been staying with family for decades, moving to stay independently would mean having his new found liberty.  Having this new found liberty would likely mean inviting his new found friends over from social apps like Grindr.

 

So ask yourself, what sort of noise, inconvenience and embarrassment would you be bringing to the neighbourhood who had been living there in peace for decades?

[Guest HDB]

16 hours ago, Guest guest said:

To get back some money when selling the current flat, stay a smaller flat for easy maintenance and get a new HDB, so thinking of buying a cheaper 2 rm rm when reach 55. 

That was what I did. I am fortunate to get a 99-lease HDB BTO 2-room flat because I have not taken any CPF Housing Grant before. I love the unit and location. However, my next-door neighbour is a family from hell. They moved in 2 years later and immediately caused troubles with many residents (upstairs and downstairs included).

 

16 hours ago, Guest Homework said:

Those who already have flat, staying with good neighbours, good locations, good neighbourhood, best is to stay put.  If you sell, you may not necessary make  profit but ended up buying the wrong house at the wrong place.  

👍

[Guest guest]

6 hours ago, Guest HDB said:

That was what I did. I am fortunate to get a 99-lease HDB BTO 2-room flat because I have not taken any CPF Housing Grant before. I love the unit and location. However, my next-door neighbour is a family from hell. They moved in 2 years later and immediately caused troubles with many residents (upstairs and downstairs included).

 

👍

So you still living there? I noticed usually if the unit staying a family, esp with young kids, high chance they might be from hell. The lesser the people who is staying in a unit has lower chance of neighbour from hell.

 

I have a neighbour which i do not know from which unit/level, his/her alarm clock always rings non-stop without switching it off after it started to ring around 5am almost everyday, and i got woken up by it and i only need to wake up for work at 6am plus. Such inconsiderate behavior from neighbours, you would not be able to find out during your house viewing.

[Guest guest]

19 hours ago, Guest Guest said:

Why must you demonized others? 

 

For a person who had been staying with family for decades, moving to stay independently would mean having his new found liberty.  Having this new found liberty would likely mean inviting his new found friends over from social apps like Grindr.

 

So ask yourself, what sort of noise, inconvenience and embarrassment would you be bringing to the neighbourhood who had been living there in peace for decades?

Difficult to find good neighbours. 90% you would encounter bad neighbours from the surrounding, depends on what they do. I have stayed in 3 different HDB previously, from my parents' house and now my own house, still can find noisy neighbours.

[Guest HDB]

28 minutes ago, Guest guest said:

So you still living there? I noticed usually if the unit staying a family, esp with young kids, high chance they might be from hell. The lesser the people who is staying in a unit has lower chance of neighbour from hell.

 

I have a neighbour which i do not know from which unit/level, his/her alarm clock always rings non-stop without switching it off after it started to ring around 5am almost everyday, and i got woken up by it and i only need to wake up for work at 6am plus. Such inconsiderate behavior from neighbours, you would not be able to find out during your house viewing.

I have no intention of moving as it's very tiring. 忍!

[sayfirst]

On 7/9/2023 at 9:11 PM, kidster said:

I heard a lot of variations about the age of the applicant and flat. 

 

Eg. Applicant's age must not be older than the flat.

 

Total no. of years of Applicant's age and flat age must not be more than 95 years.

 

Can someone explain what's this all about and the implications? I still don't get it. Thanks

 

It can be summarised as:

 

If the remaining lease of resale HDB flat is at least 20 years + can cover the youngest buyer in the resale application till he/she is 95 years old, then the buyer can use up to 100% of their CPF OA savings to buy the flat (capped at the lower of flat valuation amount or purchase price).

 

Example: Remaining lease 60 years + single buyer's age 35 = 95 years. Buyer can use 100% of CPF OA savings to buy flat.

 

Conversely, if the buyer wants to buy an old resale flat that doesn't cover him/her till 95 years old, then the amount of CPF OA savings allowed to fund the purchase would be pro-rated accordingly.

 

Example: Remaining lease 49 years + single buyer's age 35 = 84 years. Buyer would have to pay the balance purchase price in cash after utilising the allowed CPF amount.

 

The purpose of this is to help buyers set aside CPF savings for their housing needs during retirement (instead of spending a larger sum on a property that doesn't guarantee a roof over their head in old age, esp in view of increasing life expectancy).

 

 

Feel free to ask me for any property-related questions! I'm just a DM away 🙂

[Guest guest]

23 hours ago, Guest HDB said:

I have no intention of moving as it's very tiring. 忍!

Neighbour from hell and if you 忍, quite bad for your health in the long run. Like my stupid neighbour staying above my unit, his kid always run and jump in the house, and it gives me headache quite often. I plan to move out, find a top floor unit if possible.

[Guest Guest]

Saw this on social media:

 

HDB 2 Room Flexi near LRT with Single Bed Space for rental at $650/month. Will be sharing  room with owner. 

 

Is this type of arrangement approved?

[Guest HDB]

18 minutes ago, Guest Guest said:

Saw this on social media:

 

HDB 2 Room Flexi near LRT with Single Bed Space for rental at $650/month. Will be sharing  room with owner. 

 

Is this type of arrangement approved?

It's not allowed unless the owner rent out the whole unit

[Guest Guest]

22 hours ago, Guest Guest said:

Saw this on social media:

 

HDB 2 Room Flexi near LRT with Single Bed Space for rental at $650/month. Will be sharing  room with owner. 

 

Is this type of arrangement approved?

Share room with owner? Either the owner must be gay or DOM. 😅

[lonelyglobe]

22 hours ago, Guest Guest said:

Saw this on social media:

 

HDB 2 Room Flexi near LRT with Single Bed Space for rental at $650/month. Will be sharing  room with owner. 

 

Is this type of arrangement approved?

No but the rental market is crazy now so very difficult to resist the temptation. 

 

650 for a bed space? Better go and rent a utility room or up the budget a bit and get a proper room. 

[Guest guest]

18 minutes ago, lonelyglobe said:

No but the rental market is crazy now so very difficult to resist the temptation. 

 

650 for a bed space? Better go and rent a utility room or up the budget a bit and get a proper room. 

utility room is also illegal to rent out.

[Guest Passive income]

I am seriously thinking of buying an old 5-room flat, renovate it and turn it into 4 bedroom airbnb style. Then I rent out all the rooms and collect rent as passive income. 10 years later I just sell it off. Is this feasible?

[keyboard]

Calculate loh. $800/room x 10 years - taxable income - renovation - buying/selling price = ?

[Guest Guest]

14 hours ago, Guest Passive income said:

I am seriously thinking of buying an old 5-room flat, renovate it and turn it into 4 bedroom airbnb style. Then I rent out all the rooms and collect rent as passive income. 10 years later I just sell it off. Is this feasible?

Don't think you can rent out all your rooms before your 5 year MOP.

[sayfirst]

On 7/14/2023 at 7:08 AM, Guest Passive income said:

I am seriously thinking of buying an old 5-room flat, renovate it and turn it into 4 bedroom airbnb style. Then I rent out all the rooms and collect rent as passive income. 10 years later I just sell it off. Is this feasible?

 

Before you do that, there’re plenty of things for you to consider:

 

1. You need to fulfil the 5-year MOP in order to rent out the entire unit. During this MOP you can rent out individual rooms, however you must occupy at least one bedroom.

 

2. How much do you intend to spend on the house? Can you pay for it in full cash, or need to take a loan? If you need to take a loan, you would need to factor in the interest payable.

 

3. What’s your renovation budget for a 5-room flat? How long do you estimate it would take you to recoup this expense?

 

4. Who’s your target audience when you intend to sell 10 years down the road? Do you think they would pay a higher price than what you paid today, for a HDB flat lease that has already depreciated by an additional 10 years (especially since you are thinking of getting an old resale flat)?

 

 

Basically, do you think it makes sense to spend money purchasing and renovating an old asset that loses its value over time?

 

These are just some of my thoughts. If you’d like to discuss more, feel free to message me.

 

 

Edited January 22, 2024 by sayfirst
removed

[Guest guest]

From the reply above, looks like it is not advisable to buy an old flat in the first place. Whether the person is plan to buy for own stay or for rental. I am wondering old flat really cannot buy? So if i want to buy a resale flat, i can only buy flat less than 10 year old?

[sayfirst]

2 hours ago, Guest guest said:

From the reply above, looks like it is not advisable to buy an old flat in the first place. Whether the person is plan to buy for own stay or for rental. I am wondering old flat really cannot buy? So if i want to buy a resale flat, i can only buy flat less than 10 year old?

 

It’s not that old flats cannot be bought. It simply depends on the buyer’s needs. My input was based on the particular scenario given, which does not apply to all resale flat buyers. If a potential buyer is thinking of spending a considerable sum to buy an old flat and renovate it in hopes of earning rental income and profiting from a subsequent sale, then it’s important to consider what I laid out before.

 

At the end of the day, a flat provides a roof over your head. Some people buy an older resale flat and spend a good sum renovating it to their preferences, knowing very well that they intend to live there for a long time. That’s fine. Others buy a resale flat to meet current housing needs, while being open to the option of selling it in future. That’s fine as well. Different strokes for different folks.

[keyboard]

In short, yes, feasible, sure earn money. Earn $10 or earn $10000 both is earning money right.

Like the 60 years lease landed that expired not long ago. Also got people buy and then rent to workers, they still got a deal out of it. There's no lazy money, just do your sums and see if it's worth it for yourself.

[Guest guest]

16 hours ago, sayfirst said:

 

It’s not that old flats cannot be bought. It simply depends on the buyer’s needs. My input was based on the particular scenario given, which does not apply to all resale flat buyers. If a potential buyer is thinking of spending a considerable sum to buy an old flat and renovate it in hopes of earning rental income and profiting from a subsequent sale, then it’s important to consider what I laid out before.

 

At the end of the day, a flat provides a roof over your head. Some people buy an older resale flat and spend a good sum renovating it to their preferences, knowing very well that they intend to live there for a long time. That’s fine. Others buy a resale flat to meet current housing needs, while being open to the option of selling it in future. That’s fine as well. Different strokes for different folks.

If the person thinking of buying an old flat and profit from a subsequent sale, then i would think it might not happen due to lease decay. But if the person wants to earn rental income, then whether buying an old flat or newer flat still can earn rental income. As rental income doesn't look at the age of the flat.