IT’S important to keep this in mind: It’s easy to get into properties, but very difficult and costly to get out.
Hence you must get it right the first time and every time. Try to meet as many of the following criteria as you possibly can.
Buy in high-growth areas
These places experience traffic congestion. In many cases, people are forced to relocate closer to their places of work to cut down on travelling time and travelling expenses.
Hence, the demand for such properties is high. Given the limited land supply in choice locations, there will always be upward pressure on prices for these properties.
Buy 10 to 20 per cent below market
You must make money going into properties. The way to do it is to master property negotiating skills and buy from motivated sellers at 10 to 20 per cent lower than the market.
This is especially important when you are buying with the intention to keep forever. If you are planning to sell some time in future, it is still important to buy below market as doing so will ensure that you have made money at the point of purchase.
Buy properties facing the right direction
In a hot tropical country that has 10 to 12 hours of sunshine every day, properties facing the setting sun tend to get very hot after 2pm.
Properties that directly face the setting sun are priced 10 to 20 per cent lower than those facing the morning sun.
Besides properties facing the east, you should also consider north- or south-facing properties as the potential heat impact would be minimal.
Buy properties facing greenery or water
These properties will command a slight premium over others. It is more soothing to face nature in the form of parks and lakes. You will find it windier and cooler too thanks to the open spaces.
Buy corner units if you have the budget
With corner units, you will have much more flexibility than with intermediate units.
For landed properties, you will have far more options with regard to renovations, rebuilding your house and so on.
Excerpted from Milan Doshi’s How You Can Become A Multi Millionaire Real Estate Investor, published by Achievers Resource Centre.
Source : Sunday Times - 18 Nov 2007
Showing posts with label Property Buying Strategies. Show all posts
Showing posts with label Property Buying Strategies. Show all posts
Monday, November 19, 2007
Thursday, April 12, 2007
Common questions on reverse mortgages
What is a reverse mortgage?
A reverse mortgage is a financial scheme that allows customers to borrow against the value of their property and receive a cash advance from the lender, either in a lump sum or a series of regular payouts.
The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure. Reverse mortgages help homeowners who are asset-rich but cash-poor to stay in their homes and still meet their financial obligations.
In Singapore, reverse mortgages are primarily targeted at senior citizens, providing them with an option to unlock the inherent value of their property through monetary payouts and enhance their retirement needs.
How is a reverse mortgage different from a traditional home loan?
In a traditional home loan, customers make monthly repayments to the lender. But in a reverse mortgage, customers receive monthly payouts from the lender. The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure.
Why was the concept of reverse mortgages introduced in Singapore?
The reverse mortgage scheme was one of the options mooted by the government to provide another option for the growing number of senior citizens in Singapore to derive some income from their homes to meet expenditure in old age, without having to move out of their homes.
According to a report prepared by the Committee on Ageing Issues, we will witness an unprecedented age shift between now and 2030. Singapore’s population is still relatively young today but this will change significantly over the next six to 24 years. The number of residents aged 65 years or older will increase from 8.4 per cent in 2005 to 18.7 per cent in 2030. In absolute terms, seniors will multiply threefold from the current 300,000 to 900,000 in 2030. By then, one out of every five residents will be a senior. A large proportion of these seniors is expected to be asset-rich but cash-poor.
One of the biggest worries in their retirement years will be financial security. Hence the government has since suggested that reverse mortgage is an additional option to help the elderly monetise, or unlock the value in their property, for a comfortable retirement in addition to various other solutions such as support from their children, downgrading their properties and even continuing with some form of employment.
When were reverse mortgages first made available in Singapore?
Reverse mortgages have been available in Singapore since 1994 when NTUC Income first introduced the scheme for private property owners. Beside NTUC Income, OCBC Bank is currently the only other financial institution to offer reverse mortgages for homeowners of private properties.
Shortly after HDB relaxed its regulations in March 2006 to allow elderly HDB home owners to take up reverse mortgages on commercial terms offered by banks and financial institutions in Singapore, NTUC Income launched reverse mortgages on HDB flats.
Is reverse mortgage a popular financing scheme in other countries?
Reverse mortgages are available in the US, Europe, Australia, New Zealand and Canada. The market for this product differs from region to region. For example, the market in the US is relatively regulated. In the UK, there is a wider range of such financing schemes available compared to the US and Australia. Reverse mortgages are fairly new in Australia.
How popular are reverse mortgages in Singapore currently and why?
The concept of reverse mortgages is a relatively new concept in Singapore. As more and more Singaporeans head towards retirement, reverse mortgages can be a viable option for them to look to when looking for solutions to supplement their income. With longer life expectancy, many senior citizens are concerned about the rising costs of living and reduced income streams during retirement. This is a reality which affects everyone whether he or she is a private property or HDB flat owner.
Currently, there are already various solutions that senior citizens can rely on. For those who did not plan early and want to supplement their income during their retirement, they now can consider a reverse mortgage as an additional option.
Who should take up a reverse mortgage?
Senior citizens who have fully or almost fully paid for their property and wish to supplement funds for their retirement needs can consider taking up a reverse mortgage.
Before taking up a reverse mortgage, there are other options available if customers are looking for additional cashflows. For example, customers can choose to rent a place after selling their property. The excess funds from the sale can be used to buy an annuity product to provide regular payouts. Another option is to lease out their property for rental income. Yet another alternative is to use their excess CPF funds to invest in an annuity product for regular payouts.
What are the different types of reverse mortgages currently available in Singapore?
In the US and UK, there are various types of reverse mortgage schemes that vary primarily in their payout limits, payout patterns, processing fees and approved properties. In Singapore, NTUC Income’s term-based reverse mortgage is available to both private and HDB home owners while OCBC is the only bank offering reverse mortgage for private properties that comes with two different loan options - term-based and annuity-linked - to address the different retirement preferences of senior citizens.
With the term-based option, customers will receive a monthly payout for up to 25 years or when they reach 90 years of age, whichever is earlier. However, for those who are concerned about outliving the payouts, there is the annuity-linked option. With the term-based plan, customers can expect to receive a higher monthly payout compared with the annuity-linked plan, although the latter has the added advantage of providing the customer with payouts for life.
Which scheme is better - the term-based plan or the annuity-linked plan?
This will depend on the customer’s needs. For the term plan, the monthly sum that the customer receives will be higher compared to the annuity-linked reverse mortgage. For the annuity-linked plan, the customer has the assurance that the monthly payout is for the rest of his or her life although the monthly payout is lower.
After working out the amounts with the financial institution, customers should discuss with their family members before deciding on which plan to take up.
What is the amount of monthly payouts that can be obtained between the different types of reverse mortgage scheme?
The monthly payouts under each scheme will depend on several factors including property value, loan tenure and whether the property has been pledged under the CPF Minimum Sum Scheme. Gregory Chan is head of Consumer Secured Lending, OCBC Bank.
This article is written for general information only. It is not intended to provide legal, financial or professional advice or to be relied or acted upon by any persons.
Source: The Business Times, 12 April 2007
A reverse mortgage is a financial scheme that allows customers to borrow against the value of their property and receive a cash advance from the lender, either in a lump sum or a series of regular payouts.
The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure. Reverse mortgages help homeowners who are asset-rich but cash-poor to stay in their homes and still meet their financial obligations.
In Singapore, reverse mortgages are primarily targeted at senior citizens, providing them with an option to unlock the inherent value of their property through monetary payouts and enhance their retirement needs.
How is a reverse mortgage different from a traditional home loan?
In a traditional home loan, customers make monthly repayments to the lender. But in a reverse mortgage, customers receive monthly payouts from the lender. The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure.
Why was the concept of reverse mortgages introduced in Singapore?
The reverse mortgage scheme was one of the options mooted by the government to provide another option for the growing number of senior citizens in Singapore to derive some income from their homes to meet expenditure in old age, without having to move out of their homes.
According to a report prepared by the Committee on Ageing Issues, we will witness an unprecedented age shift between now and 2030. Singapore’s population is still relatively young today but this will change significantly over the next six to 24 years. The number of residents aged 65 years or older will increase from 8.4 per cent in 2005 to 18.7 per cent in 2030. In absolute terms, seniors will multiply threefold from the current 300,000 to 900,000 in 2030. By then, one out of every five residents will be a senior. A large proportion of these seniors is expected to be asset-rich but cash-poor.
One of the biggest worries in their retirement years will be financial security. Hence the government has since suggested that reverse mortgage is an additional option to help the elderly monetise, or unlock the value in their property, for a comfortable retirement in addition to various other solutions such as support from their children, downgrading their properties and even continuing with some form of employment.
When were reverse mortgages first made available in Singapore?
Reverse mortgages have been available in Singapore since 1994 when NTUC Income first introduced the scheme for private property owners. Beside NTUC Income, OCBC Bank is currently the only other financial institution to offer reverse mortgages for homeowners of private properties.
Shortly after HDB relaxed its regulations in March 2006 to allow elderly HDB home owners to take up reverse mortgages on commercial terms offered by banks and financial institutions in Singapore, NTUC Income launched reverse mortgages on HDB flats.
Is reverse mortgage a popular financing scheme in other countries?
Reverse mortgages are available in the US, Europe, Australia, New Zealand and Canada. The market for this product differs from region to region. For example, the market in the US is relatively regulated. In the UK, there is a wider range of such financing schemes available compared to the US and Australia. Reverse mortgages are fairly new in Australia.
How popular are reverse mortgages in Singapore currently and why?
The concept of reverse mortgages is a relatively new concept in Singapore. As more and more Singaporeans head towards retirement, reverse mortgages can be a viable option for them to look to when looking for solutions to supplement their income. With longer life expectancy, many senior citizens are concerned about the rising costs of living and reduced income streams during retirement. This is a reality which affects everyone whether he or she is a private property or HDB flat owner.
Currently, there are already various solutions that senior citizens can rely on. For those who did not plan early and want to supplement their income during their retirement, they now can consider a reverse mortgage as an additional option.
Who should take up a reverse mortgage?
Senior citizens who have fully or almost fully paid for their property and wish to supplement funds for their retirement needs can consider taking up a reverse mortgage.
Before taking up a reverse mortgage, there are other options available if customers are looking for additional cashflows. For example, customers can choose to rent a place after selling their property. The excess funds from the sale can be used to buy an annuity product to provide regular payouts. Another option is to lease out their property for rental income. Yet another alternative is to use their excess CPF funds to invest in an annuity product for regular payouts.
What are the different types of reverse mortgages currently available in Singapore?
In the US and UK, there are various types of reverse mortgage schemes that vary primarily in their payout limits, payout patterns, processing fees and approved properties. In Singapore, NTUC Income’s term-based reverse mortgage is available to both private and HDB home owners while OCBC is the only bank offering reverse mortgage for private properties that comes with two different loan options - term-based and annuity-linked - to address the different retirement preferences of senior citizens.
With the term-based option, customers will receive a monthly payout for up to 25 years or when they reach 90 years of age, whichever is earlier. However, for those who are concerned about outliving the payouts, there is the annuity-linked option. With the term-based plan, customers can expect to receive a higher monthly payout compared with the annuity-linked plan, although the latter has the added advantage of providing the customer with payouts for life.
Which scheme is better - the term-based plan or the annuity-linked plan?
This will depend on the customer’s needs. For the term plan, the monthly sum that the customer receives will be higher compared to the annuity-linked reverse mortgage. For the annuity-linked plan, the customer has the assurance that the monthly payout is for the rest of his or her life although the monthly payout is lower.
After working out the amounts with the financial institution, customers should discuss with their family members before deciding on which plan to take up.
What is the amount of monthly payouts that can be obtained between the different types of reverse mortgage scheme?
The monthly payouts under each scheme will depend on several factors including property value, loan tenure and whether the property has been pledged under the CPF Minimum Sum Scheme. Gregory Chan is head of Consumer Secured Lending, OCBC Bank.
This article is written for general information only. It is not intended to provide legal, financial or professional advice or to be relied or acted upon by any persons.
Source: The Business Times, 12 April 2007
Friday, April 7, 2006
5 Powerful Property Buying Strategies
In a perfect world, it would be easy to always be objective and make rational decisions based on sound information. In reality, emotions and timing often have a big effect. Sometimes the best you can do is to set the stage so that you minimize the subjective influences.
Give yourself power and control. Don’t find yourself in the position of “having” to buy and doing so in haste.
1. Work out the finances first. Paying cash? Getting a mortgage? Find out what you can afford and check out all your various options.
Meet with whatever experts you need to in order to have all your facts - a lender, your tax advisor, etc. Knowing exactly what you want to spend and can spend will eliminate time spent looking at properties you can’t have.
Not only that, when you find the right property you can make a “clean” offer without a financing contingency. Sellers are more likely to respond favorably to clean offers.
2. Unless you really want to own two properties, sell first. Then buy. First of all, the property you want will probably not take a contingency offer. So unless you are prepared to own both (and you have to plan for a worst case scenario) you are wasting your time with the offer.
Second, if you are emotionally attached to what you want to buy you won’t be as objective on selling your home. You may take less than it’s worth so that you don’t lose the other home. There’s nothing wrong with that as long as you understand the financial implications.
3. Use a realtor who knows the market. That may sound too simple in this age of the internet, when buyers have access to the same data the agent has. The difference is the ability to interpret that data.
Full-time realtors do more than show homes and write contracts. They study market trends and observe area fluctuations. You are thinking about your needs now. But your agent is thinking about both now and in the future when you are ready to sell again and looking for your future resale opportunities.
In addition, the internet is an increasingly non-objective source of information. Many websites do not display all the properties that are for sale in a given area because of contractual conflicts. And most new communities are not listed at all in any search vehicle. A professional realtor should be able to show you all the homes that fit your needs.
4. Wait till your toes curl. In other words, don’t get pressured into making a decision. When you find the right home you will know it (your toes will curl or the little hairs on the back of your neck will stand up).
That doesn’t mean look at 200 homes before you make a decision. Sometimes it’s the first home you see. But don’t let an agent, a seller, or a spouse, push you into something you don’t feel good about.
5. You can’t have it all. Decide what is most important in your next home and put it into perspective. If it’s location, or price, or view, or square footage, or school districts, or amenities, or whatever.
Remember that some things can be changed. Floors, kitchens, landscaping, etc. are all changeable. So if they are not perfect, they can be. But location, view, amenities, etc. are there forever.
No matter what your budget, the good fairy of real estate did not go - poof! There it is. It simply doesn’t happen.
Everyone has to make compromises. So decide what truly matters to you and put that at the top of your list. Give in on what doesn’t matter as much.
Follow these guidelines and you’ll get the home you desire.
By Crissie Cudd
Give yourself power and control. Don’t find yourself in the position of “having” to buy and doing so in haste.
1. Work out the finances first. Paying cash? Getting a mortgage? Find out what you can afford and check out all your various options.
Meet with whatever experts you need to in order to have all your facts - a lender, your tax advisor, etc. Knowing exactly what you want to spend and can spend will eliminate time spent looking at properties you can’t have.
Not only that, when you find the right property you can make a “clean” offer without a financing contingency. Sellers are more likely to respond favorably to clean offers.
2. Unless you really want to own two properties, sell first. Then buy. First of all, the property you want will probably not take a contingency offer. So unless you are prepared to own both (and you have to plan for a worst case scenario) you are wasting your time with the offer.
Second, if you are emotionally attached to what you want to buy you won’t be as objective on selling your home. You may take less than it’s worth so that you don’t lose the other home. There’s nothing wrong with that as long as you understand the financial implications.
3. Use a realtor who knows the market. That may sound too simple in this age of the internet, when buyers have access to the same data the agent has. The difference is the ability to interpret that data.
Full-time realtors do more than show homes and write contracts. They study market trends and observe area fluctuations. You are thinking about your needs now. But your agent is thinking about both now and in the future when you are ready to sell again and looking for your future resale opportunities.
In addition, the internet is an increasingly non-objective source of information. Many websites do not display all the properties that are for sale in a given area because of contractual conflicts. And most new communities are not listed at all in any search vehicle. A professional realtor should be able to show you all the homes that fit your needs.
4. Wait till your toes curl. In other words, don’t get pressured into making a decision. When you find the right home you will know it (your toes will curl or the little hairs on the back of your neck will stand up).
That doesn’t mean look at 200 homes before you make a decision. Sometimes it’s the first home you see. But don’t let an agent, a seller, or a spouse, push you into something you don’t feel good about.
5. You can’t have it all. Decide what is most important in your next home and put it into perspective. If it’s location, or price, or view, or square footage, or school districts, or amenities, or whatever.
Remember that some things can be changed. Floors, kitchens, landscaping, etc. are all changeable. So if they are not perfect, they can be. But location, view, amenities, etc. are there forever.
No matter what your budget, the good fairy of real estate did not go - poof! There it is. It simply doesn’t happen.
Everyone has to make compromises. So decide what truly matters to you and put that at the top of your list. Give in on what doesn’t matter as much.
Follow these guidelines and you’ll get the home you desire.
By Crissie Cudd
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