Real Case Studies

Case Study 1 : (Upgrade) From BTO flat to Condo

Nicholas and Kerry owned a 4-room BTO flat and has just fulfilled their minimum occupation period (MOP). The value of their flat has appreciated by $200,000. As a couple in their early 30’s, they felt that they should start investing for the future. They decided to unlock the capital tied up in the BTO flat and cash out on the profit. However they were unsure how to go about it.

-        Does executive condo (EC) offer them the best returns as there’s no Additional Buyer Stamp Duty (ABSD)?

-        Is private condo the better option as it offers more flexibility?

-        Should they consider buying 2 properties?

-        What about the timeline planning and logistics? Will they have to rent first, or do they have to move a few times?

We thoroughly analysed all their options, and presented to them all the possibilities and limitations of each option. Their financial standing and amount of cash/CPF savings available after making the purchase were also taken into consideration. Despite having heard of their neighbours buying 2 private condos after selling off their flat, Nicholas and Kerry decided to take a conservative route. Our calculations showed that they both will have to continue working to finance the monthly loan repayments and they may end up over-stretching if they were to purchase 2 private condos.

After careful consideration, they decided on a private condo that was nearing TOP. Their decision was mainly based on these factors:

-        price (the private condo was priced just slightly above an EC in the vicinity)

-        TOP date (they prefer not to wait too long)

-        No resale levy for private condo purchase (vs $40,000 resale levy for an EC purchase)

Do you own a HDB flat and have already fulfilled your MOP? Unsure of your next step and your available options?

Speak with us today to find out more!

Case Study 2 : (Upgrade | Invest) Move to new Condo, rent out existing EC

Our clients, Alex & Erica have been staying in their 3 bedroom EC for close to 10 years. They were in their early-40’s with 2 kids approaching their teenage years. They were toying with the idea of renovating their existing home as their needs have changed, and they also wished to give their home a fresh look. They have always thought of investing in another property for rental income, but unsure whether:

• to buy a smaller 1 bedroom or 2 bedroom unit for rental income, and just renovate and continue staying in their existing EC?

• or to buy a condo for own stay and rent out their EC?

• can they afford to take up 2 mortgages?

• is there any way to save on ABSD?

We reviewed their financial position, assessed their loan eligibility and risk profile, and explored the possibility of decoupling. After looking at the numbers, both Alex and Erica were able to confidently purchase a new condo for own stay and to rent out their existing EC. They both have stable careers and are earning comfortable salaries. After setting aside savings for rainy days, they decided it was time to make their money work harder for them. They chose to decouple on their first property, as they were able to finance a property each with their individual incomes. Best of all, they were able to own 2 properties without having to pay ABSD, and avoided the hassle of moving out to renovate their 10-year old home.

Instead, they were able to move straight into a brand new condo. They were also able to thoroughly plan the renovation of their new home. This time, their kids were able to customise each of their own bedrooms according to their preferences. With the whole family involved in the decision-making, this new home was truly being shaped into their dream home!

To summarise:

• Alex and Erica saved on having to pay ABSD for the purchase of their second property.

• They now enjoy a healthy rental income, which fully covers the monthly loan repayment of their new home.

Case Study 3 : (Rightsize | Invest) From Landed to 2 Condos

Mr and Mrs Lee are a retiree couple in their late 60s living with their 2 pet dogs in a 3-storey, 4000+ sqft semi-detached house. Their son and daughter are both married and had already moved out of the house. They soon realised they were spending too much time and energy maintaining their home, instead of spending time doing the things they enjoy. Their landed home was approaching the 20-year mark, and was beginning to require more time and money for maintenance works. Mr and Mrs Lee started to feel as though they were serving their home, instead of the home serving their needs. Taking into consideration their requirements and after extensive research and fine tuning, we found them a brand new 1400sqft home with beautiful unblocked greenery views, within close proximity to a large park where they can bring their dogs for their daily walks.

Through proper and detailed planning on our part, Mr and Mrs Lee avoided having to rent temporary accommodation and were able to smoothly transition from their existing home to their new home after the completion and renovation of their new condo. We were also able to find a buyer for their landed home within 6 months of them collecting keys to their new home.

Around a year after moving into their new home, Mr and Mrs Lee shared with us their intention to make their money work harder for them and generate some passive income. We did a detailed assessment of their financial position and took into consideration their risk profile before shortlisting a few properties with high growth potential and healthy rental demand. Eventually, they decided on a brand new 1 bedroom unit in a 99-year leasehold condo in district 15 East Coast area.

All of the above didn’t happen over a year or two. In fact it took Mr and Mrs Lee almost 5 years, from when they first approached us to find a home, to when they approached us again to find them another property to invest in. The value of their first condo has also appreciated by over 30% during these 5 years, and we are certainly very glad to have been part of their journey!

Isn’t this the ideal retirement plan? To cash out of your home, rightsize, and have extra funds to invest in a second property for passive income? Mr and Mrs Lee were able to achieve all these without paying any ABSD!

Get in touch with us if you would like to find out how your home can be your retirement nest egg and more!