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Misc100

If You Have 2 Properties, Will U Sell Or Rent Out 1 Of Them?

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If you have 2 properties(2 private OR 1 private+1hdb), will u sell or rent out 1 of them?

a. Sell - becos of the present high prices (probably going downhill now)

b. Rent - good rental income every mth

Edited by Misc100
 

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If you have 2 properties(2 private OR 1 private+1hdb), will u sell or rent out 1 of them?

a. Sell - becos of the present high prices (probably going downhill now)

b. Rent - good rental income every mth

My opinion:

If you owned 2 private properties, you can choose to stay at either of them.

If the 2nd unit is fully paid up, more worth to rent out and wait for the next wave then sell.

If still more than 70% under mortgage, sell it and wait for the next dip and enter the market.

If you owned 1 Pte + 1 HDB, you can only rent out the Pte or stay in Pte and rent out rooms in HDB,

and enjoy non-concessionary property tax on the Pte.

In short, it is never a time to talk about investment unless cash rich.

 

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My opinion:

If you owned 2 private properties, you can choose to stay at either of them.

If the 2nd unit is fully paid up, more worth to rent out and wait for the next wave then sell.

If still more than 70% under mortgage, sell it and wait for the next dip and enter the market.

If you owned 1 Pte + 1 HDB, you can only rent out the Pte or stay in Pte and rent out rooms in HDB,

and enjoy non-concessionary property tax on the Pte.

In short, it is never a time to talk about investment unless cash rich.

You should take the maximum loan for your investment property instead of trying to pay it off because mortgage interest is tax deductible.

 

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You should take the maximum loan for your investment property instead of trying to pay it off because mortgage interest is tax deductible.

Why stretch maximum loan when one may not even live up to the age to fully own it.?

More like an invinsible investment.

 

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Hi,

If I have 2 properties, I will lease one out. I think this is one of the best investment without major risk as compared to other form of investment. Also, if you sell the property and keeping the money in the bank, you don´t get any reasonable interest. From the rental income, I think one can get around 5% return.

 

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Hi,

If I have 2 properties, I will lease one out. I think this is one of the best investment without major risk as compared to other form of investment. Also, if you sell the property and keeping the money in the bank, you don´t get any reasonable interest. From the rental income, I think one can get around 5% return.

If the money is invested in stocks, the gains could be 100-200% in good times, while property prices are going downhill (probably 2 quarters behind the stock market).

 

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Why stretch maximum loan when one may not even live up to the age to fully own it.?

More like an invinsible investment.

Investment property is all about returns, it is not so much about having a roof above my head or weather I get to own it or not. (Not like you can take them with you when you kick the bucket or something:)

Your ability to borrow at 3-4% interest for your investment property should be seen as an asset because that allows you to free up your cash for another purposes like business, or paying off your occupied property because mortgage interest cant be use as expenses.

On the other hand, mortgage interest from your investment property is classified as deductible expenses, hence it will help you avoid paying more income taxes which range from 3.5 to 20% at the moment.

If the money is invested in stocks, the gains could be 100-200% in good times, while property prices are going downhill (probably 2 quarters behind the stock market).

You will need to be a speculator to generate 100-200% return a year and in stock market you lose as fast as you gain. Since the peak in 2007, STI has fall by over 30% and it seems that there is still no light at the end of the tunnel.

Property doesnt give you such high returns and its not as liquid, however it is still one of the best hedge against inflation over time.

 

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Investment property is all about returns, it is not so much about having a roof above my head or weather I get to own it or not. (Not like you can take them with you when you kick the bucket or something:)

Your ability to borrow at 3-4% interest for your investment property should be seen as an asset because that allows you to free up your cash for another purposes like business, or paying off your occupied property because mortgage interest cant be use as expenses.

I am a landlord myself and I don't lead others to their grave even before the time they kick their bucket.

If head not so big, don't wear a big hat.

Ability to borrow is nothing to boast about. Ability to lend is something which I wannabe.

If the money is invested in stocks, the gains could be 100-200% in good times, while property prices are going downhill (probably 2 quarters behind the stock market).

Play it well, the "could" will become reality. Not for beginners.

Edited by GMC
 

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I am a landlord myself and I don't lead others to their grave even before the time they kick their bucket.

If head not so big, don't wear a big hat.

Ability to borrow is nothing to boast about. Ability to lend is something which I wannabe.

Play it well, the "could" will become reality. Not for beginners.

How you manage your money, how thin you spread yourself are things that are personal hence that cannot be use as a case to rewrite the principle of maximizing returns for investment property.

E.g. A and B, both earning $100,000 per year bought the similar investment property at $1m each and A took a 90% loan while B took 50% loan, both over 25 years @ 3% per year.

Using the mortgage calculator, A’s annual interest mortgage payment for the first few years will be about $25,000, while B will be $14,000

Assuming the annual rental for the property is $60,000 per year, that will equate to an additional taxable income of (60K-25K) = 35K and (60K-14K) = $46K for A and B respectively.

As such because of the investment property, A will have to pay an addition, $5950 income tax per year, while B has to pay $7820 per year. (@14% tax rate)

In term of returns on capital outlay,

A invested $100,000 on the property and generate a return of $60K-5.95K-25K = $29.05K or 29.05% per year,

while B invested $500,000 on the same property generate a return of $60K-7.82K-14K= $38.18K or 7.63% per year

Hence from an investment point of view, it is clear that A is making his money work harder than B.

Edited by Husky
 

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There are many 'unseen' costs for leasing out your place:

1. Property tax - 10% of rental

2. Income tax

3. Conservancy charges/Maintenance fees

4. Fire Insurance

5. Cost/depreciation of furniture

6. Agent commission - (0.5 mth)

All the above totaled up to 3 months of rental

 

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There are many 'unseen' costs for leasing out your place:

1. Property tax - 10% of rental

2. Income tax

3. Conservancy charges/Maintenance fees

4. Fire Insurance

5. Cost/depreciation of furniture

6. Agent commission - (0.5 mth)

All the above totaled up to 3 months of rental

Got pple say can get relief in income tax.

When times are bad, rental may not even cover installments.

Tenants MIA and default payment...etc, left vacant for months without tenancy.

Theory is very promising, never in reality.

Having multiple homes on mortage only increase credit risk.

 

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Got pple say can get relief in income tax.

When times are bad, rental may not even cover installments.

Tenants MIA and default payment...etc, left vacant for months without tenancy.

Theory is very promising, never in reality.

Having multiple homes on mortage only increase credit risk.

There is really nothing "unseen" about what was mentioned because if you have personally owned a property before, you should be about to calculate the running cost in 5-10 mins.

Investing is like running a business, hence if you have no knowledge in business and have no appitite for risk, then you shouldnt be in it in the first place. A FD giving your 1% returns might be a better place to put your money.

Like have said, how you managed your personal finance and have thin your spread yourself is inmaterial to what I said about maximising rental returns by getting the maximum loan for investment property.

Edited by Husky
 

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With the financial turmoil ongoing, perhaps better to sell than to lease it out.

still can lease out, but not able to get maximum yield.

instead of money working hard for you, could be slaving to the property.

 

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