Investing in Property – Decide by the Numbers, Not by Emotions
Do your homework
If there are new launches in the district that you like, look across the street to check if there are any under value properties. You can also check on URA website for the recent transactions in the market. A fee of S$80 applies.
Read more industry news in various property firms’ and international agencies’ websites. You can get various free research reports being published online.
Next, what you could probably do as well is to speak to a trustworthy estate agent who can provide more insights on the market itself.
Investing in Property is usually a long-term strategy
Typically, the housing market is a 7-10 year cycle; there are always highs, lows and steady patches.
When you buy a property for investment, you are basically looking at whether the property has the rental potential. You can start by looking at similar properties in the same district and what are the rentals that they command. Then calculate the projected rental yield. If you are lucky, you may find a long-term tenant or you may find that your tenants come and go. Check out the property, ask around, ask the neighbours to sieve out more information before you make a decision.
Be sure to do your sums and commit when you are comfortable with the rental yield you projected – say 4% to 5% for example. If the property does not meet your expectation, then forget and start looking again. Don’t buy in haste and put your emotions into it when it comes to property investment. If it is for your own stay, then there are a lot of emotional factors involve. Ask yourself what you want.
Choose a loan tailored to your current needs
There are many different home loan options to suit you. Will you go with an interest only or a principal and interest loan? Fixed or variable rates? Which features are needed? Apply for a loan that suits your current needs and lifestyle because you can always refinance later. With new products entering the increasingly competitive mortgage market, you can always get a Free Home Loan Health Checks by MoneyIQ and change your loan situation later if it’s advantageous to do so.
Plan your cashflow
Last but not least, do your sums and plan your cashflow wisely. Do not over commit. May sure you have enough means to finance your mortgage without stretching your budget. You may like to visit a financial advisor to access your current monetary situation.
Otherwise, you may like to download our Budget Planner as a simple guide to start calculating your finances. (Note: Our Budget Planner only serves as a guide to assist you in your financial planning. Under no circumstances should this be taken as advice to purchase any property. If need be, please seek expert advice from a financial planner.)