Buying a HDB Resale Flat
Things To Consider
You must have other forms of savings or investments apart from your home
The CPF system, originally conceived as a form of retirement savings, is now used by many people who empty their Ordinary Accounts to pay for their homes. There are many others who don’t bother to invest even when they’ve built up a sizeable amount of savings, because they intend to spend it on their first home.
While property in Singapore is indeed expensive, don’t make the mistake of thinking that owning a big, expensive place automatically means you can retire whenever you like.
Property isn’t the get-rich-quick investment vehicle it used to be. You must have savings and investments outside of your home. Don’t put all your eggs into one basket, especially if that basket is an old HDB resale flat.
Try to get a higher return on investment from your property purchase
You can expect the value of your property to fall sharply when the lease is nearing its conclusion. Loan restrictions will reduce the pool of buyers available to you, and if you don’t manage to sell it at too big of a loss, your only hope will be to pray that the flat will be selected for En Bloc.
That isn’t to say that you can’t raise your return on investment, even for an old flat. There are other ways to monetise your home, such as by renting out spare bedrooms in your flat.
You also want to try to maximise the amount of housing grants you qualify for as a proportion of the sale price of the flat. Remember that having your parents live with you or within 4km of your new flat will tack on an extra $20,000 to the grants you receive. And as the grants are pegged to income, you might want to apply early on, when your income is lower.
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