It is probably the trend that property is a good inflation hedge, since it will definitely end up higher in value compare to stocks, which can just die off under mismanagement.
It got me thinking while I was studying for my exams.
A 5 room HDB flat that you bought in 1999 for $267k. Now can sell for $550k.
Duration = 13 years
Appreciation = 106 %
Annualized returns = (1+1.06)1/13 = 5.7 % per annum
If you are not renting it, is 5.7% a good return? I think you have to rent because if you don’t rent it doesn’t show the full potential of HDB.
If you rent at least 2 of your room for $1000 per month, your 13 year return is $156k. or 58.42% returns from rental.
Total returns = 106% + 58.42% = 164.4%
Annualized returns = (1+1.64….