Rentals in Singapore

[NYY1]

For those who are interested, here are some return figures. property = SRX CCR Index, Stocks = S&P 500, Return are per annum (also, there is no adjustment for currency).

A) Buy in Oct 1998, low for properties, to Current: Property up 6.1%, Stocks up 7.3%. Hello Mr. Opportunity Cost!

With a 75% loan, I estimate the property would have returned ~9.x%. However, the CCR property index itself is up ~4.2x over this period (i.e. 6.1% for 24 years). I am not sure if many properties actually purchased in 1998 went up this much; my guess is that the index is biased upward by the inclusion of newer properties over time.

Anyways, pretty good for the property.

B) Buy in December 1999 to 2013: Property up 5.8%, Stocks up 3.6%.

With a loan, obviously a big win for property. This period likely includes a) unfavourable starting point for stocks (right before peak of tech bubble) and b) a good period for real estate here (period of higher population growth and immigrant inflows).

C) Buy in December 2008 to Current: Property up 6.1%, Stocks up 13.2%.

With a 75% loan, property could be up ~11%. Pretty good for both.

D) Buy in January 2013 to Current (last decade): Property up 2.5%, Stocks up 12.6%

Not much to say here. Starting point for property was unfortunately at a high (opposite of situation B) above). With a 75% loan, property could be up ~6.x%.

--> Obviously, there are other reasons to buy or rent, and the current market shows that if renting then the increase in rent can be substantial.

Moreover, what's done is done; what the next 5-10 years holds is probably more relevant for some. As some said, timing is everything.

Impressively thorough - if anything my takeaway is that without the benefit of hindsight a lot of luck goes into making the "right" decision.

I think there is some luck in that policy changes can swing things one way or the other (and while some of these are known/accepted in hindsight, I'm not sure that was the case ahead of time). Provided the status quo continues, which itself is an assumption, if I can spin the wheel 1,000 times, I think I know what is the better strategy on average over extended periods of time. But we spin the wheel once and over any shorter horizon it can go in either direction and make one feel stupid if we are only evaluating calculations.

Hence, often the "right" decision is likely a combination of all the other factors mentioned before.

[the observer]

For those who are interested, here are some return figures. property = SRX CCR Index, Stocks = S&P 500, Return are per annum (also, there is no adjustment for currency).

A) Buy in Oct 1998, low for properties, to Current: Property up 6.1%, Stocks up 7.3%. Hello Mr. Opportunity Cost!

With a 75% loan, I estimate the property would have returned ~9.x%. However, the CCR property index itself is up ~4.2x over this period (i.e. 6.1% for 24 years). I am not sure if many properties actually purchased in 1998 went up this much; my guess is that the index is biased upward by the inclusion of newer properties over time.

Anyways, pretty good for the property.

B) Buy in December 1999 to 2013: Property up 5.8%, Stocks up 3.6%.

With a loan, obviously a big win for property. This period likely includes a) unfavourable starting point for stocks (right before peak of tech bubble) and b) a good period for real estate here (period of higher population growth and immigrant inflows).

C) Buy in December 2008 to Current: Property up 6.1%, Stocks up 13.2%.

With a 75% loan, property could be up ~11%. Pretty good for both.

D) Buy in January 2013 to Current (last decade): Property up 2.5%, Stocks up 12.6%

Not much to say here. Starting point for property was unfortunately at a high (opposite of situation B) above). With a 75% loan, property could be up ~6.x%.

--> Obviously, there are other reasons to buy or rent, and the current market shows that if renting then the increase in rent can be substantial.

Moreover, what's done is done; what the next 5-10 years holds is probably more relevant for some. As some said, timing is everything.

Have you factored in the costs for

A. Stock participant who has rental costs
Vs
B. Leveraged home owner who has mortgage and maintenance cost.

I would assume B is less than A

[NYY1]

Have you factored in the costs for

A. Stock participant who has rental costs
Vs
B. Leveraged home owner who has mortgage and maintenance cost.

I would assume B is less than A

I have not. If we look at rent vs. mortgage interest + maintenance fees + property taxes, I think B was lower when mortgages rates were 1% - 2%. It is getting closer now and somewhat depends on all of the property's characteristics (location, tenure, etc).

Over time, B) is almost certainly going to be lower, as rent will go up with inflation/wages and this is one of the advantages I've previously listed to owning.

So the net position should probably include all of that but roughly speaking if the returns are higher from A), you can use some of the money to cover the difference. It also comes back to what is the value of being able to move around (optimize location) and/or consume something new/different vs. being stuck in one place for extended periods of time?

[Lisafuller]

For those who are interested, here are some return figures. property = SRX CCR Index, Stocks = S&P 500, Return are per annum (also, there is no adjustment for currency).

A) Buy in Oct 1998, low for properties, to Current: Property up 6.1%, Stocks up 7.3%. Hello Mr. Opportunity Cost!

With a 75% loan, I estimate the property would have returned ~9.x%. However, the CCR property index itself is up ~4.2x over this period (i.e. 6.1% for 24 years). I am not sure if many properties actually purchased in 1998 went up this much; my guess is that the index is biased upward by the inclusion of newer properties over time.

Anyways, pretty good for the property.

B) Buy in December 1999 to 2013: Property up 5.8%, Stocks up 3.6%.

With a loan, obviously a big win for property. This period likely includes a) unfavourable starting point for stocks (right before peak of tech bubble) and b) a good period for real estate here (period of higher population growth and immigrant inflows).

C) Buy in December 2008 to Current: Property up 6.1%, Stocks up 13.2%.

With a 75% loan, property could be up ~11%. Pretty good for both.

D) Buy in January 2013 to Current (last decade): Property up 2.5%, Stocks up 12.6%

Not much to say here. Starting point for property was unfortunately at a high (opposite of situation B) above). With a 75% loan, property could be up ~6.x%.

--> Obviously, there are other reasons to buy or rent, and the current market shows that if renting then the increase in rent can be substantial.

Moreover, what's done is done; what the next 5-10 years holds is probably more relevant for some. As some said, timing is everything.

Impressively thorough - if anything my takeaway is that without the benefit of hindsight a lot of luck goes into making the "right" decision.

I think there is some luck in that policy changes can swing things one way or the other (and while some of these are known/accepted in hindsight, I'm not sure that was the case ahead of time). Provided the status quo continues, which itself is an assumption, if I can spin the wheel 1,000 times, I think I know what is the better strategy on average over extended periods of time. But we spin the wheel once and over any shorter horizon it can go in either direction and make one feel stupid if we are only evaluating calculations.

Hence, often the "right" decision is likely a combination of all the other factors mentioned before.

Completely agree.

[Lisafuller]

For those who are interested, here are some return figures. property = SRX CCR Index, Stocks = S&P 500, Return are per annum (also, there is no adjustment for currency).

A) Buy in Oct 1998, low for properties, to Current: Property up 6.1%, Stocks up 7.3%. Hello Mr. Opportunity Cost!

With a 75% loan, I estimate the property would have returned ~9.x%. However, the CCR property index itself is up ~4.2x over this period (i.e. 6.1% for 24 years). I am not sure if many properties actually purchased in 1998 went up this much; my guess is that the index is biased upward by the inclusion of newer properties over time.

Anyways, pretty good for the property.

B) Buy in December 1999 to 2013: Property up 5.8%, Stocks up 3.6%.

With a loan, obviously a big win for property. This period likely includes a) unfavourable starting point for stocks (right before peak of tech bubble) and b) a good period for real estate here (period of higher population growth and immigrant inflows).

C) Buy in December 2008 to Current: Property up 6.1%, Stocks up 13.2%.

With a 75% loan, property could be up ~11%. Pretty good for both.

D) Buy in January 2013 to Current (last decade): Property up 2.5%, Stocks up 12.6%

Not much to say here. Starting point for property was unfortunately at a high (opposite of situation B) above). With a 75% loan, property could be up ~6.x%.

--> Obviously, there are other reasons to buy or rent, and the current market shows that if renting then the increase in rent can be substantial.

Moreover, what's done is done; what the next 5-10 years holds is probably more relevant for some. As some said, timing is everything.

Have you factored in the costs for

A. Stock participant who has rental costs
Vs
B. Leveraged home owner who has mortgage and maintenance cost.

I would assume B is less than A

Unless the home in question in B is far more expensive than the one being rented in A, I'd say you're right.

[Lisafuller]

Have you factored in the costs for

A. Stock participant who has rental costs
Vs
B. Leveraged home owner who has mortgage and maintenance cost.

I would assume B is less than A

I have not. If we look at rent vs. mortgage interest + maintenance fees + property taxes, I think B was lower when mortgages rates were 1% - 2%. It is getting closer now and somewhat depends on all of the property's characteristics (location, tenure, etc).

Over time, B) is almost certainly going to be lower, as rent will go up with inflation/wages and this is one of the advantages I've previously listed to owning.

So the net position should probably include all of that but roughly speaking if the returns are higher from A), you can use some of the money to cover the difference. It also comes back to what is the value of being able to move around (optimize location) and/or consume something new/different vs. being stuck in one place for extended periods of time?

Yup, with rental prices on the up and up B is almost always going to be lower.

[the observer]

Have you factored in the costs for

A. Stock participant who has rental costs
Vs
B. Leveraged home owner who has mortgage and maintenance cost.

I would assume B is less than A

I have not. If we look at rent vs. mortgage interest + maintenance fees + property taxes, I think B was lower when mortgages rates were 1% - 2%. It is getting closer now and somewhat depends on all of the property's characteristics (location, tenure, etc).

Over time, B) is almost certainly going to be lower, as rent will go up with inflation/wages and this is one of the advantages I've previously listed to owning.

So the net position should probably include all of that but roughly speaking if the returns are higher from A), you can use some of the money to cover the difference. It also comes back to what is the value of being able to move around (optimize location) and/or consume something new/different vs. being stuck in one place for extended periods of time?

So long as you note that for middle income folks, with 250k investable pot, either in housing or rental.

Before factoring the gains…
Let’s talk about costs.

Rental at 36k per annum is 14% of the pot itself. ($1 million dollar condos used to rent out at 3k for the last decade or so.)

2% mortgage average the past decade associated with 15k in interest, and maybe 3k in maintenance costs.
There’s yield in the property itself, ie can rent out spare rooms etc if unused.

Long story short, buying stocks has been great if you timed it well. Though it still feels like housing had less of the stress and similar gains. A lazier approach.

[LHTay]

My one is up at the end of June and will result in a 70-100% rise. I will probably move of possible just because I can't stomach living in the same place for so much more.


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hi, do you mind sharing some advice on how are you going to search for your next rental unit? my lease is ending around end of March, and the LL has just contacted to check if I would be extending and has quoted me 50% rent increase despite I've been here for 2 years and keeping the unit well taken care of >.<

i used propertyG*** for rental searching previously, but I'd also like to check if there are other options available (which is also safe).

any reply/feedback is much appreciated. thanks much!

[jwoods1864]

My one is up at the end of June and will result in a 70-100% rise. I will probably move of possible just because I can't stomach living in the same place for so much more.


Sent from my iPhone using Tapatalk

hi, do you mind sharing some advice on how are you going to search for your next rental unit? my lease is ending around end of March, and the LL has just contacted to check if I would be extending and has quoted me 50% rent increase despite I've been here for 2 years and keeping the unit well taken care of >.<

i used propertyG*** for rental searching previously, but I'd also like to check if there are other options available (which is also safe).

any reply/feedback is much appreciated. thanks much!

I have not started looking yet because mine is up at the end of June and I am about to start a new job. However, I will commence my search in mid February.

I am with my partner and we are actually considering getting a 2 bed condo as her brother and his partner lives in Singapore. This would reduce the rent.

In general, I advise using Google to find the rental apps and then download them all. REDACTED

The best advice is to start early. In your situation, I would suggest a deadline for your answer to the landlord. Thereby giving you time to search for alternatives. Maybe try saying the 31st of January?


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[PNGMK]

My one is up at the end of June and will result in a 70-100% rise. I will probably move of possible just because I can't stomach living in the same place for so much more.


Sent from my iPhone using Tapatalk

hi, do you mind sharing some advice on how are you going to search for your next rental unit? my lease is ending around end of March, and the LL has just contacted to check if I would be extending and has quoted me 50% rent increase despite I've been here for 2 years and keeping the unit well taken care of >.<

i used propertyG*** for rental searching previously, but I'd also like to check if there are other options available (which is also safe).

any reply/feedback is much appreciated. thanks much!

That's a pretty standard rent hike and cheap given the cost of finance now. The SOR has actually quadrupled in the last year.

[jwoods1864]

My one is up at the end of June and will result in a 70-100% rise. I will probably move of possible just because I can't stomach living in the same place for so much more.


Sent from my iPhone using Tapatalk

hi, do you mind sharing some advice on how are you going to search for your next rental unit? my lease is ending around end of March, and the LL has just contacted to check if I would be extending and has quoted me 50% rent increase despite I've been here for 2 years and keeping the unit well taken care of >.<

i used propertyG*** for rental searching previously, but I'd also like to check if there are other options available (which is also safe).

any reply/feedback is much appreciated. thanks much!

That's a pretty standard rent hike and cheap given the cost of finance now. The SOR has actually quadrupled in the last year.

My 100% increase won't be pleasant lol. What do you think is a fair deadline in general for giving landlords a decision?


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[PNGMK]

JWoods - SOR actually dropped a bit in Dec. I'd argue around that and a potential recession coming in 2023.

[jwoods1864]

JWoods - SOR actually dropped a bit in Dec. I'd argue around that and a potential recession coming in 2023.

SOR means? Schedule of Rates?


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[PNGMK]

Singapore Overnight Rate - what banks use to set their lending rates with.