Time and time again, we have been hearing from property agents that buying Singapore properties allows you to earn rental returns and capital appreciation.
Let's take this example, pay $1,000,000 for a condo unit, rent it out for 3.5k per month. Make a downpayment of $300,000 to get good returns. The maths will work out as follows.
Revenue
$3,500 x 12= $42,000
Cost
Interest on $700,000 (60% leverage) at 4.2% interest = $29,400
Rental Commission to agent= $3,500
Property Tax on 40k annual value = $4,000
Returns
$5,000 on $300,000 downpayment. Annual returns of 1.6% per annum
Capital Gains= Property Appreciation of 50% and above.
Good Financial Advice?
In my opinion, property agents using the above as financial advice are not giving the optimal solution.
Look overseas and we have REITs that give 8%-10% returns and have potentially higher capital appreciation.
What are these REITs?
LINK Reit is pherhaps the
...
