Best Condo Investment for 2011

[@FIS]

For a 1.5 Mio condo you put down 1.2 Mio which you can currently finance the interest portion with SGD 1.200,-/month + a few fees/maintenance.

Now assuming you can collect SGD 4.000,-/month in rental proceeds. What in your eyes is wrong with the deal? The capital repayment which goes into your own pocket? Liquidity? Rising interests? Devaluations? Imagine your SGD 5.000,-/month housing allowance is slowly paying of your loan - doesn't this sound nice to you?

I bought in 2002 and by now my housing allowance almost put SGD 1 Mio in my pockets not taking into considerations the appreciation of the property by 100% ++. No nagging landlords either .

[to pp]

To PP

1 - 4k is optimistic on a 1.5m property (not out of the park but still optimistic, at least on an ongoing basis due to supply, have to figure in vacant periods rather than just take headline rent).

2 - Liquidity, don't know but volumes seem to be down and lots of supply coming.

3 - Rising rates, this is inevitable, question is when and how much.

4 - Devaluation.  Over supply and rising rates mean this is likely.  SG property seems to follow pretty wild cycles and a dip is due soon.  I'd wait until 2013/2014.

5 - Depends on the housing allowance.  Most people don't get one for 10 years (if at all any more).  Even if they do it depends how it is paid.  Some companies pay in cash so that is fine, those that take out the lease directly (generally better, their problem if you leave plus a tax break) are not usually going to pay your mortgage for you.  In a number of firms I know of, including mine, if you become an owner occupier they take the allowance away (though you can still buy investment property, just can't live in it).

You did well, good for you.  In 2002 prices were stagnant and if you remember didn't move much for another 4 or 5 years after that and were well below the peak of late 90s, liquidity was a big deal but downside wasn't really. Situation today is very different in a number of ways.

[Neil Agentstrong]

I hear that people are flocking to buy property on the moon these days.  My astronaut friends and ordinary people too - they're all telling me the same thing as the other voices in my head.  So come on, don't miss the rocket, snap up some lunar real estate now.  The yield will be astronomical.

[Agent007]

I heard it's a bit like Singapore on the moon...... no atmosphere