Karen Tang, CFP®: Certified Financial Planner in Singapore

10 Pointers To Consider Before Buying A Property In Singapore

10 Pointers to Consider before buying a property in Singapore

Does it make sense to rent or own your property in Singapore today? Is paying rent similar to throwing some of your money away?

The above two are “Yes or No” questions.

Buying a property is a BIG decision for most people. It will likely become your main financial asset, and its mortgage your main financial liability. 

After thought and research, I have created this checklist of 10 pointers to help you make the right choice. It will save you a lot of time and avoid rookie mistakes. 

That is why it is well worth the serious attention you give it to answer each question below:

1. Price of the new property
The location, price per square foot, age of the building, lease tenure and facilities need to be considered.

2. Current rent you are paying (and/or the rental yield of the property being purchased)

3. Expected inflation in property price and monthly rents (due to future government policies, cooling measures, and demand)

4. How much mortgage you will get, the interest rate, and the tenure
Check with the banks as this gives you an idea how much downpayment is needed, and how much your monthly mortgage repayment will be.

5. Affordability – [To discuss in-person]
After setting aside adequate cash in the bank for emergencies and foreseeable personal spending, is there enough left for the property’s down payment and all initial expenses?
Initial expenses include the following: 

  • Option To Purchase fee
  • Buyer stamp duty
  • Mortgage stamp duty
  • Legal services fees
  • Agent fees
  • Renovation

6. Additional costs that the owner bears over time:

  • Annual property tax
  • Condo monthly maintenance
  • Furniture, fixtures, appliances
  • Basic repairs
  • Mortgage (where interest rate can go up)
  • Home insurance
  • Tax on rental yield (if rented out)

7. Have home prices gone up too fast / too much in recent months?
To check if prices are still reasonable, compare home prices vs average income of people, and vs average rental yield over the years.

8. Are there other better investments out there to grow your money?

9. Your profile

  • Current age
  • Risk tolerance
  • Dependents’ needs
  • Debts
  • Goals
  • Stability of household income
  • Lifestyle expenses
  • Health
  • The rest of your financial portfolio

10. Emotional component

The satisfaction or inner need to own your place of residence. There is also different value that each of us places on various features of the property that mean something to us – such as its location, view, etc.

Buying a property will definitely have an impact on your finances now, and in the future. Take your time to consider all the above.

If you wish to do a review of your current financial portfolio and to also assess your affordability, do reach out to me for a consultation.

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