Recently, Channelnewsasia covered a topic asking whether Singapore’s private housing market is in a bubble. In it, a certain property firm’s “expert” was interviewed. One fact which made me interested is how annual rental yields of Condominiums in Singapore are now between 2.8% – 3.2%.
Having been in the real estate and investing on my own, my perception is that these figures do not reflect the reality for investors buying a private property to rent out for investment purposes. In my opinion, it seems 3 significant expenses may have been forgotten/ignored by property investors when computing the rental yield:
1. Property Tax
This is the biggest factor which many seem to have forgotten. In Singapore, the property tax is determined by the annual value of your property and for properties renting out, it is based on the annual rental income of the rented property. The base tax rate is 10% …