Let's begin on Part 2. MY OWN STORY.
When I got married 4 years ago, I desperately wanted a house of my own. At that point, condominium was out of the picture. I didn't do any calculations and it was not even a consideration. I wanted it quick, so BTO was out. I eventually settled for a resale HDB which was 30+ years old. It was near my parents and my spouse's parent, and also near the supermarket, food centres, and train station. It was ideal for me, or so I thought.
Like many others, I opted for THE safer option. Buy a HDB, renovate it to my taste, and I will be contented. But 4 years down now, am I?
After dabbling in real estate and actually paying for my own housing, I realized I would have done things differently if I had gathered more well informed real estate knowledge. At that point, I wasn’t a property agent, so I engaged one with the standard assumption that engaging a property agent is really just for them to help with the necessary transactions. But now, I only wish that I had discussed more with the agent and the agent would have analyzed and shared more with me.
1) TAKING IN BUYER'S AGE AND FINANCIAL ABILITY
I was in my very early thirties when I purchased my HDB. If someone had pointed out that since my husband and I were still relatively young, a younger HDB or a private property would have been something that could be considered since we were in the prime years of our working life, and that the chances of us upgrading or switching property were higher than say, someone nearing retirement age.
With still so many good years of working life ahead, we most likely are able to afford the monthly installment. And since the chances of us upgrading are higher, a younger HDB or private property will most likely greatly increase the chances of us profiting more during the event of a sale.
2) SUGGESTING DIFFERENT OPTIONS
If financially we could not afford a private property, or if we are just so in love with a particular resale HDB, yes, by all means, we could purchase it.
But can we purchase it together but list one person as an occupier so that after 5 years, when the MOP is over, the person who is listed as an occupier can consider to purchase another property but not subject to ABSD (Additional Buyer’s Stamp Duty)?
ABSD= A tax that property buyers have to pay when they buy a property
The answer is YES. But unfortunately, the option was not presented to me.
3) DOING CALCULATIONS
“Would you be intending to sell your HDB and upgrade after a certain years?”If this question was posted to me, I would have answered "YES". Upgrading to a bigger HDB or investing in private property have always been my goal. But if I had known after the calculations that the amount of accrued interest of using my CPF after 5 years will eat up most of my cash proceeds since the capital appreciation for a "aging HDB" will also be minimal, I would have thought twice on my purchase.
HOW IT AFFECTS ME NOW?
Certainly it is not over. I can start over once my MOP is up. But did I waste 5 years and some money (renovating cost)? Perhaps. Make no mistake, I love my current house. But after doing my calculations, if I sell it, I definitely do not love what proceeds I will get back or if there's any left.
I hope that my own experience will be able to assist you in some way. If you're working with someone right now on your property purchasing journey, and you feel that they are not asking enough questions or sharing more than you would like, please ask them, as I sincerely believe that everyone should be equipped with sufficient information when it comes to, especially, what may be one of your biggest purchases in life.
