Singapore Rent 2nd Highest in the World | How to Be a Landlord?

A recent study published by Singapore Business Review show that Singapore rent is the second highest in the world. How can you take advantage of that and become a landlord in Singapore yourself?

To become a landlord in Singapore and rent out your property, you have to invest in a condo. This is because if you buy a HDB, there are a lot of rules and restrictions for leasing

singapore rent

📌Four factual tips to share with everyone

  • Fact #1, a lot of people think that getting a HDB loan is easy, but actually you can borrow twice as much for private condo. When you take a HDB loan, there’s something known as MSR of 30%. But for private condos, you’re only limited to the TDSR of 60%. To put it in a very simple context, if your income is $1,000, you can only service your HDB loan with $300. But if you’re taking a private bank loan for a private resale purchase, you can use up to $600 to service your loan
singapore rent TDSR
  • Fact #2, Cooling measures benefit first timer. This is because there is no ABSD for citizens if they’re buying their first property. This is actually a policy by the government to help Singaporeans to buy their 1st property. So for those who haven’t own a property and if you’re in a good financial state, you should consider buying a property
  • Fact #3, Private Condo has more flexibility than owning a HDB

1) Condo has no MOP (Minimum Occupation Period)

2) You can buy under single name

3) More Refinance Options (e.g. Term Loans)

4) Decoupling is allowed

5) You can buy under Trust (child under 21 yrs)

  • Fact #4, Do you know that you only need 5% cash to buy a condo? For first time owner, you can loan up to 75%, the rest will comprise of 5% cash, 75% can be loan and about 20% will be your CPF

While you only need 5% cash to pay for the condo. But you need to ask yourself if your job and income are stable? Because you’re going to pay the loan for next 20 to 30 years

📌 Below are three checklist questions you have to ask yourself before buying a condo

Check number 1: Is your income stable?

Check number 2: Calculate Your Finances

Check number 3: Are you prepared to service your loan for the next 30years

Generally, most people feel that resale is cheaper! it is true that the medium price for new launch is higher than resale condo. That is why many people will consider resale as a first purchase.

Here, we’re going to share why new condo is better for investment, we are going to show you three factual differences

  • 1st difference: Generally, interest rates for new condo will be lower than resale condo
  • 2nd Difference: Payment schedule. New condo will follow a progressive payment method whereas resale will follow a normal payment, which usually means full payment within 3 months after OTP is issued
  • 3rd Difference: New Condo will have better capital appreciation than resale condo

However, there are instances where the resale is actually more suitable as compared to new launches.

📌 When is resale better? Below are four possible scenarios

  1. Buy-to-stay (for own occupation and you cannot wait)
  2. Specific location (you want to be near parents or near specific schools)
  3. Freehold investors (majority of new launches are LH99)
  4. En bloc investors (buy old condo, rent out and wait for en bloc)

If you wonder if you can become a landlord? Give Den a call @ 98285808 for a 1-1 chat to start planning We will help you realize your dreams! I just want you guys to know that it is not an impossible dream.

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Dennis Lim

Dennis has more than a decade of experience investing in real estate. Like many fellow Singaporeans, he grew up in a HDB flat with dreams to live in a condominium. Through careful financial planning & hardwork, this became a reality when he was 30. He now owns 3 private properties in Singapore and has helped hundreds of Singaporeans to achieve their goal of upgrading their homes in land-scarce Singapore.

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