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The 3 Best Timings To Sell Off An Investment Property!

So you bought an investment property years ago, and are now wondering when is the best time to sell? In this article, we share about what we feel are the 3 best timings to sell off an investment unit.


Stagnation of prices of the unit when you want to sell off an investment property

As investors, we know the importance of making your money work hard for you. For property, we look at both rental yields and capital appreciation potential in a real estate asset. Rental yields are easy to determine, based on the current market rental that is being transacted. For example, in a condominium unit, we can take reference to the recent transacted rental prices in the condominium.

The 3 Best Timings To Sell Off An Investment Property!_Home Quarters SG_KC Ng Keng Chong

That will determine the next rental price if the current tenant is looking to renew or terminate. From there, we are able to calculate the gross rental yield and also the nett rental yield after taking into account other costs relating to the investment unit such as mortgage rate, condo maintenance fee, property tax and agent service fees to name a few.

Capital appreciation potential is a little more complicated. Like the name suggests, it is potential and it could go higher in due time. But how long the potential can be realized is important here. Let me illustrate. If there are 2 properties that cost S$1 million each, and both have the potential to increase 50% to S$1.5 million. Investors will most likely be indifferent to choose one over another.

The 3 Best Timings To Sell Off An Investment Property!_Home Quarters SG_KC Ng Keng Chong

However, let’s say after 5 years, Property A appreciates by 25% and Property B appreciates by 30%. On hindsight, Property B is a better investment if the investor only wants to hold on to the unit for 5 years. However, if the investor has another 5 years to go before needing the money from the investment for other needs, then what could be done?

Assuming that both Property A and B’s prices are already stagnant. For one, the investor can keep the same property and hopefully at the end of another 5 years, it will realize its full potential and appreciate to S$1.5 million. He could sell off the unit and put it in another one that have a better growth potential. As an added bonus, with a larger capital after sale, there could be units with better opportunities available.


Restructuring the owners for tax planning purposes

If you have bought an investment unit with a partner or spouse, and currently have capital to invest into the real estate market, it might be helpful to look at how you plan the ownership of the current residential property portfolio.

In a typical scenario, a couple bought a 2 bedroom condominium unit for investment for S$700,000 and it has since appreciated to S$1 million as their second property purchase. Their first property purchase is a built-to-order HDB flat that they currently own, valued at around S$500,000. If together, they were to put the money into another 2-bedroom unit priced at S$1 million, they will have to pay 15% Additional Buyer Stamp Duty(ABSD).

What they can do is to sell off both the HDB flat and the 2 bedroom unit and start afresh. One of them can purchase and own a S$1.5 million 3 bedroom condominium unit. The other spouse can then purchase the 2 bedrooms unit for investment. Between the both of them, they are able to make profit as well.

Each of them owns 1 property, so there is no need to pay the ABSD. The same scenario works if the couple aims to sell the 2 bedroom unit to purchase a landed property priced above S$2 million. The ABSD would have been at 12%. That would be S$240,000 – almost half the price of their HDB flat! Of course, there are other considerations such as loan eligibility and whether they will want to live in a condominium. 


Better investment opportunities

Lastly, with limited capital, an investor may identify a better investment unit than the one they currently own. Thus, it might be worthwhile to take the profit that the current investment unit generated and put it in another unit with better growth potential.

We have seen cases where investors cut losses to do the same as well. The money returned together with rentals and savings accumulated over the years. In that way, they might be able to purchase a bigger investment unit or even multiple investment units diversified across Singapore.

For example, take the case that we have mentioned regarding the 2 bedroom unit which initially cost S$700,000 and have appreciated to S$1 million. Assuming they have S$400,000 mortgage loan left, the cash returned would be S$600,000. After an even split of S$300,000 each between the couple, each partner can put a down payment on a close to S$1 million property at a 75% loan from the bank.


Contact Us

If you have questions or if you are thinking about properly showcasing your house for sale, contact Home Quarters by going over to homequarters.com.sg or send us an email at homequarterssg@gmail.com or direct message us on Facebook or Instagram!

If you would like to schedule a virtual viewing, that is also possible – you can read all about what you need to look out for during a property virtual viewing here before COVID-19 end.

Reach out to us any way you like and we love to help you out and answer any questions you have to sell your house so that you can move on to the next big thing in life!

That’s it for this article! Stay safe everybody, and remember, call Home Quarters and start packing!

Oh No, No More Visitor Parking In All New Condominiums in Singapore!

What?! No more visitor parking in all the new condominiums in Singapore! Did I hear that right? In this article, we will discuss the new ruling announced by Land Transport Authority (LTA) that will phase out visitor parking lot moving forward called Range-based Parking Provision Standards (RPPS). What is the impact of this new ruling on car park spaces in new launches in Singapore? What is the impact then of this new ruling on older condominiums in Singapore?


Range-based Parking Provision Standards (RPPS)

Before we dive deep into the impacts, we first have to know what is in LTA’s new Range-based Parking Provision Standards (RPPS). The revised parking standards will replace the existing Car Parking Standards and Range-based Car Parking Standards from 1 February 2019.

In line with Singapore’s move towards a car-lite society, this gives developers greater flexibility to manage parking spaces according to the needs of the development. This is especially in regions that are very well connected to the current public transport system. As such, more space will be freed up for greenery and communal use.

The new standards will specify the range of car parking provisions such as parking spaces for cars, motorcycles, bicycles. On top of that, specific lots such as coach buses for hotels and loading/unloading bays for commercial development that private developments are allowed to provide will vary according to location zones and land uses.

Minimum Parking Provision

Previously, there is a minimum parking provision, and developers have to request for LTA’s approval to reduce the parking provision of up to 20% below the minimum standard for some developments. Now, RPPS provide the developers’ flexibility to determine the desired level of parking provision within the range without the need to seek LTA’s approval. However, if the developers wish to build less than or more than the specified range of car parking provision then the application will still have to be evaluated by LTA on a case by case basis.

Developers might face penalties of $16,000 charge for each car parking space (or $5,500 for each motorcycle parking space) if they go either above or below the range they are allowed. This is interesting as LTA move towards capping of the parking spaces instead of stipulating a minimum number of parking provisions. This move is seen as a greater emphasis on reducing the number of cars on the roads and also encouraging people to commute via public transport. It also specifies mandatory bicycle parking requirements.


The impact on new condominiums affected by this new RPPS

Under the RPPS, the lower and upper bound for car park space in residential developments is split according to Zone 1. Zone 1 is defined as central business district and Marina Bay, except for car-lite precinct.

Source: The Jovell Residences

Zone 1: 50-80% of the total dwelling units
Outside of Zone 1: 80-100% of the total dwelling units

Usually, buyers of private condominiums expect to have at least 1 car park space in the condominium for their own use. Thus, there will not be additional car park spaces for visitors even for condominium outside of Zone 1, much lest the buyers that purchase a unit within Zone 1.


Does it really impact the actual owner profile that are currently staying in Zone 1?

Based on experience, the condominiums in Zone 1 usually exercise a paid parking system to reduce the number of parking spaces to residents that need it, and thus willing to pay for it.

That is even for condominiums that have a 1-1 ratio of car park lots to units. Being located so near to the city centre, many owners and tenants does not need a car too. The excess provides for bigger unit owners that could have a need for 1 or 2 cars lots, which is paid to the management agent. That is then added into the maintenance fund and sinking fund.

This is not the first time that the issue of car park space is in the spotlight. From 2005, developers of new condominiums that is build within 400m of a train station is allowed to reduce the car park space to only 80% of the number of units in the condominium. When Home Quarters visited a few of these developments, we found that the car park lot space is not fully taken up as well.

Oh No, No More Visitor Parking In All New Condominiums in Singapore!_Home Quarters SG_KC Ng Keng Chong

This might be due to these condominium being heavily tenanted. Majority of the tenants and even residents who chose a living location nearer to train station do not own a car. This transition will takes time to be generally accepted and people will adapt to the fewer parking spaces in new condominiums moving forward.


What about the older condominiums?

Not only will the new ruling affect new condominiums, we think that it will definitely affect older condominiums built before the new parking standards. If buyers are looking for condominium that will allow them to park 2 or even 3 cars in the condominium itself without paying for the additional car park lot, they could consider buying older condominiums such as Mandarin Gardens that have about 1500 parking spaces for its 1000 residential units.

Source: Mandarin Gardens

There are definitely enough lots for guests and visitors to park during festive seasons such as Chinese New Year, Hari Raya and Christmas! This will become a selling point for older properties with ample parking spaces. Another type of property that might attract more attention will be the strata property with their own lots. Usually they come with 2 parking spaces and are right outside the door of the unit.

This will save the owners the hassle of walking a long distance from the lot where they park or competing with the neighbours for parking space. Regarding the 2nd car parking lot charge, if buyers buy a condominium without being made aware of the 2nd car park charge, they can end up having unwanted tension between themselves and the management council. As reflected by the incident in 2010, the police had to be called in twice to intervene on matter relating to additional car parking lots.


Conclusion

There will most likely be more new rules or by-laws set up by each individual management committee of the condominium to have a mutually agreed upon way to resolve the parking situation.

Oh No, No More Visitor Parking In All New Condominiums in Singapore!_Home Quarters SG_KC Ng Keng Chong

There will also be teething issues such as those seen in the viral video in October 2019 where a resident at Eight Riversuites condominium hurled vulgarities at the security officer over a condominium rule that requires guests to pay $10 for parking after 11pm.

At Home Quarters, we think it will take time for Singapore to fully embrace being a car lite city, to take public transportation or to make cycling a mainstream transport option. To integrate it as part of the culture and way of life of all the residents living in the city state will take some time.

Now that you know about Range-based Parking Provision Standards, what will be the impact on car park spaces in new launches in Singapore and also what might be the impact of this new ruling on older condominiums in Singapore. Do you support the push by the government towards a car-lite nation and is parking spaces important in your decision to purchase your next dream home?


Contact Us

If you have questions or if you are thinking about properly showcasing your house for sale, contact Home Quarters by going over to homequarters.com.sg, send us an email at homequarterssg@gmail.com or direct message us on Facebook or Instagram! If you would like to schedule a virtual viewing, that is also possible – you can read all about what you need to look out for during a property virtual viewing here before COVID-19 end.

Reach out to us any way you like and we love to help you out and answer any questions you have to sell your house so that you can move on to the next big thing in life.

That’s it for this article! Stay safe everybody, and remember, call Home Quarters and start packing!

The Big Choice: Big New Condo or Old Landed Property?

Between a 4-bedroom condominium or a 4-bedrooms landed property, which will you choose?

Setting the premise, we can put the budget estimate at around S$2.5 million. There is interest to purchase a 4-bedroom unit. We are also looking at a traditional landed property and not cluster housing.


Looking at your lifestyle needs

Lifestyle needs is one of the most important factors when choosing between a condominium or a landed property. If you are looking at a 4-bedrooms unit, you are likely to have a big family living together.

Considering the needs of your family, one might fit better than the other. For example, if you have elderly and young children living in the unit, you would prefer a single-storey house with no stairs. In that case, a condominium unit will be a better choice as the possibility of getting a single-level 4-bedroom unit is easier than getting a single-level 4-bedroom landed property.

The Big Choice: Big New Condo or Old Landed Property?_Home Quarters SG_KC Ng Keng Chong

Children would also affect the ultimate buying decision. For buyers who prefer to have their children interact with their neighbours’ in a secure compound, a condominium unit would be a better choice. Some of my clients even have Whatsapp groups where they will plan kids’ play activities together in the condominium. But if members of the family would prefer to have their own space, a landed property will probably be better suited as they tend to have bigger rooms.

In addition, if you do own pets, they will definitely appreciate the yard that landed properties have to offer. They can roam around with lots of space. A big plus is that bringing your dog out to walk is as simple as walking out the front door as parks are generally nearby to landed property estates too. 


Considering flexibility in housing modifications

Is having a customized layout plan drawn to suit your preferences important to you? Do you want the facade of the house that you are living in to be more creative?

In the case, it would be better to buy a landed property. In general, landed property owners have more flexibility in alterations as long as they are within the rules of the Building Construction Authority (BCA). For condominiums, most of the management committees require the building to look uniform externally. Sometimes, even the colour of your blinds installed will have to be approved by the managing agent!

Maintenance Fee

The maintenance of the unit is another key consideration that you have to keep in mind. For a condominium, you have to pay a monthly maintenance fee and a common fund to maintain the common area and facilities of even if you do not use the facilities. However, if there are problems relating to the common area and facilities, the cost will be spread out across of the owners in the condominium. This means your share will be lower.

For landed property owners, although there is no need to pay a monthly maintenance charge, you have to pay any costs in full. This includes periodic pest control, lift maintenance, gate maintenance, pool cleaning and roof-related issues in addition to the internal leakages, electrical and plumbing works.


Studying price movements of these property types

Lastly, we will be looking at price movements of the condominium and landed property. You should also think about which is a better investment if you plan to sell it after.

Of course, there is no crystal ball to predict what will be the prices in the future. However, we do have historic data extrapolated from 2000 to 2019.

Looking at the per square foot price of the average landed property, there is an increase a total of 132%. Whereas for the average condominium, it increased relatively lesser at 103% over the 20-year period. On an average yearly growth rate, the landed property segment increased 6.59% while the condominium segment increased 5.14%.

On hindsight, the landed segment performed better. Taking a closer look at the graph in recent times, from 2016 onwards, prices remain relatively stable, increasing steadily over time for both segments.

Do note that the restriction placed on landed property market, the segment is reserved only for Singapore Citizens. If permanent residents are looking to own a unit, they will need to seek the approval of the Singapore Land Authority Land Dealings Approval Unit (LDAU), making it more exclusive to own a unit as opposed to the condominium property market that is open to all to buy including foreigners.


Contact Us

So after considering these, you might be wondering which to use out of the many units out there? You want to beat the average price increase in the market when it comes to the time to sell?

If you have questions or if you are thinking about properly showcasing your house for sale, whatsapp message or call KC from Home Quarters and begin finding your new home today: +65 8809 2889! Or drop us an email, commenting on our YouTube or contacting us through our Facebook and Instagram pages! If you would like to schedule a virtual viewing, that is also possible – you can read all about what you need to look out for during a property virtual viewing here before COVID-19 end.

That’s it for this article! Stay safe everybody, and remember, call Home Quarters and start packing!

3 Tips To Selling Your Housing Unit In Record Time!

Tips To Sell Off Your Unit Quickly

#1 Appraise the demand for the unit before selling your housing unit

So, you want to sell your housing unit quickly. Firstly, we have to assess the demand for the unit that is being sold. We can approximate the demand of a unit through its past transactions.

If the unit is a HDB flat, we start by looking at the “resale flat price”. We check how many units and price of each unit are being sold in the last 6-month and 12-month period in the HDB town or even down to the street level.

3 Tips To Selling Your Housing Unit In Record Time!_Home Quarters SG_KC Ng Keng Chong

HDB Resale Flat Price Source: HDB


For private residential units, we look at Urban Redevelopment Authority (URA)’s Private Residential Property Transactions where you can search by the appropriate project name. Primarily, this is used for condominiums and apartments. We can also search by property type and postal district. This is used for landed properties or cluster housing.

3 Tips To Selling Your Housing Unit In Record Time!_Home Quarters SG_KC Ng Keng Chong

Private Residential Property Transactions Source:URA

Next, we also look at the resale data. We see how many units of the particular type of house that you are selling. That will give you a gauge if there are buyers interested to buy the unit that you are selling.

If there are multiple transactions in the condominium or HDB estate, it is a good indication that there would be strong demand for the unit that you are selling. However, it could also mean that there are not many units available for sale in the area. To check if this is true, we move on to our second tip.


#2 Evaluate your competition

Check if there are many of your neighbours that are putting up their unit for sale. If there are, and your research also shows low demand of the unit from past transactions, it would mean that the actual demand for your particular type of unit is low.

So, where and how do we check if your neighbours are selling their unit? Generally, you can do this by going to popular multiple listing portals and select filters based on your unit type, your area or your condominium. Of course, do keep in mind that there might be a few repeated advertisements of the same unit.

If there are many similar units that are up for sale, we will classify the level of competition as “high”. Buyers have more choices if they are looking in the area, and in order to stand out, you need to have a unique selling point that can entice the buyer to choose your unit over the rest. In order to perform better than the competition and sell the unit, marketing is key.


#3 A Strong Marketing Matrix For Your Unit

At Home Quarters, we emphasize on customized marketing strategies that will showcase your unit to the right audience. In this aspect, there is no one-size-fits-all solution.

We would position the unique selling point of the unit and re-package the advantages to the potential buyers in the area. In this way, we can reach buyers that are looking for the unit perfect for their needs. For example, if the family-friendly unit is close to good schools, and are looking for a unit in the East, we would be activating our precise digital audience targeting methods.

It is not about just producing an amazing video, but the ability to promote this particular video featuring your unit, to the correct audience that will get the house sold! Of course, there are other factors that will affect how fast a unit get sold. This includes price, lease tenure, and layout. We would work out these details on a case by case basis.


Contact Us

If you have questions or if you are thinking about properly showcasing your house for sale, whatsapp message or call KC from Home Quarters and begin finding your new home today: +65 8809 2889! Or drop us an email, commenting on our YouTube or contacting us through our Facebook and Instagram pages!

If you would like to schedule a virtual viewing, that is also possible – you can read all about what you need to look out for during a property virtual viewing here before COVID-19 end.

Reach out to us any way you like and we love to help you out and answer any questions you have to sell your house so that you can move on to the next big thing in life.

That’s it for this article! Stay safe everybody, and remember, call Home Quarters and start packing!