A long time reader wishes to purchase a condo that is valued at $1.65 million.
Currently, the family is staying at a 5-Room HDB valued at around $500,000 that is fully paid-up. This HDB can potentially rent for a gross rental income of $2,500 a month.
He considered 3 options.
Option 1:
Sell current HDBUse the sales proceed + CPF + cash to buy the condoDo not leverage up
Option 2:
Sell current HDBUse the sales proceed + CPF to purchaseAlso loan $300,000
Option 3:
Keep HDBUse CPF + some cash to buy a condoAlso Loan $900,000This will incur an additional ABSD of $198,000 since this is the second property they would own.
Other assets the family own include:
CPF OA: $900,000Cash: $500,000Stocks and Bond: $1,500,000
So he asked for my second opinion. I can’t give much advice since I am not his planner. But I think I...