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Singapore Property hearsay 1

I was curious about the passive income generation capabilities of properties in Singapore.

I should be. Everyone tells me if you have the money you should get one now.

It’s investing in a comfortable future.

So I got a chance to talk to a friends mother who happens to sell landed properties.

And you will be able to see how clueless i am.

I don’t even know landed properties can only be purchased by Singaporeans.

This effectively leaves condominiums to foreign speculators.

The curious factor was that in a URA report, it was indicated that the average rental yields is around 3.8%.

That looks kind of low so it’s good to sound out some real figures but the figures are also making me suspect whether every property of that category is around that range.

Private landed terrace house with a market value of 2 million rents around 4k++. Works out to be 50k per year and a yield on asset of 2.5%.

A freehold Kovan condo valued at 1 million rents for out to be 36k a year and a yield in asset of 3.6%

Executive condominiums rents for 3k per month and HDB 2.6k

Looks to me that the HDB is the value out of the whole lot.

But what matters in the end is how much leverage you can go up by because that is the multiplier.

Given the current rates, I believe after leverage at different level the leverage yield will be between 7-9%

Wonder if it’s better leveraging up LTA 10 year bond at 3.8% yield by 50%?


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Thursday 7th of March 2013

Just wondering, how do you actually invest using leverage in a corporate bond in a sensible way? Ie probably not thru brokers as they charge high interest rates...


Thursday 7th of March 2013

hi YC, were you subjected to high interest rates previously? I kinda know that if you are a accredited investor or a priority/preferred banking customer you may have access to OTC bonds that enables you to leverage


Friday 1st of March 2013

While technically only Sporeans can own landed property, foreigners can as well, if they get the green light from the govt. It is easy to get the govt to say yes. Asking them is just a formality.


Tuesday 26th of February 2013


While the good times are still around, i.e. positive yield of rental over purchase price, the tax increase is about another expense, which is most likely to be factored into any rental review.

All boils to demand & supply, which I believe is healthy at this moment. However, comes 2014-2015, that will be a different story as many TOP will take place.

Time will tell this newbie what a cycle feels and looks like.


Tuesday 26th of February 2013

wow, Snoopy, you really follow the rental scene well. I hope so because if not many Singaporeans will cry with their property


Monday 25th of February 2013

Given the government's policy to reduce influx of foreigners,the pool of tenants for rented properties will be cut going forward.


Monday 25th of February 2013

On renting out a house, certain wear & tear are expected. Naturally, if you had a tenant from hell than a higher depreciation is expected.

My previous tenant is a Ah Tiong with blue IC, a senior research fellow @ a local uni with a PhD in Chemistry. I had initial refused to, except for this qualifications and place of employment. Boy was I wrong. So bad that several prospective new tenants actually walked away from the unit viewing, whose cleanliness & hygiene standard are as bad as those from his native kampung. An example, the dust on the fan grill is as thick as the Caribbean dude's hair curl. Yes, I deducted from the deposit, hired a cleaning company to do a once over before handing over to the new tenant and family.

FTs & FS (Foreign students) will form the large bulk of this rent market. It is only who will be providing this service and at what price (hence, the yield).

Yields from rental are taxed as income. There is a property tax which is about 20X more than owner occupied for a 3 room HDB. A lot of $$$ for garment and it's expensive bicycle and atas avant garde designer fire station & NPP (Tg Pagar)


Monday 25th of February 2013

hi SnOOpy168, that is rather unfortunate but thanks for sharing with my friends here. How do you see this recent tax increase about 12-20% affecting rents?

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