It's something new right?
Yes, as a real estate consultant, I am sharing stories of failed case studies of my own so you don't have to go through it. Or even if you did, let's start changing it together NOW. It's always better late than never.
There are MANY successful case studies encouraging people to replicate their formula, taking a leap of faith to financial freedom through property investing. Even with the most convincing data, statistics, and calculation, I used to have the same thinking as most people.
1) They have the money, but I have no money to upgrade or buy
2) If it's so easy, everyone will be a millionaire
3) I'm doing just fine, so there is no need to take such a risk
4) If I invest, what if the new property loses value?
5) With such high loan and monthly instalments, what if I lose my job?
With the same thinking, I had missed out on good opportunities and options, and, similarly, even when I purchased my first resale HDB (sharing more on my next post). My parents certainly missed out on a few good opportunities. And so did my grandparents.
Even my dog is depressed.
CASE STUDY 1 (PARENTS STORY)
My parents had a BTO Pasir Ris HDB EA in the 80s. So after selling it off in the 90s, they made some profit and was looking for a new property.
We went to see many condominiums and as much as we wanted to upgrade, my parents decided that the price tag of $580K - $600K was too much for them to afford . They could afford it but it would have been tight, and they were afraid of the monthly installments. Same thinking above came into mind.
Let's disclose the condo mentioned and look at some scenarios:
Missed Housing: Eastpoint Green in Simei
1) Selling the property now, 20 years later (Eastpoint Green)
Purchase Year: 1998
Avg. Price per PSF: $512
Selling Year: 2022
Avg. Price per PSF: $926
Capital Gain: Approx 80%
2) Selling the property in 2008, 10 years later (Eastpoint Green)
Purchase Year: 1998
Avg. Price per PSF: $512
Selling Year: 2008
Avg. Price per PSF: $617
Capital Gain: Approx 20%
That's 10 - 20 years ago, you may say. All properties would have gained value after 20 years.
Yes, that's correct. So let's talk about the current property they have now.
Current Housing: Resale 5 Room Tampines HDB
1) Selling the property now, 20 years later
Purchase Year: 1998
Purchase Price: $390,000
Selling Year: 2022
Selling Price: $565,000 (based on recent sale transaction in HDB website)
Capital Gain: Approx 45%
2) Selling the property in 2008, 10 years later
Purchase Year: 1998
Avg. Price per PSF: $390,000
Selling Year: 2008
Avg. Price per PSF: $350,000
Capital Gain: Negative 10%
**Firstly, all the above data is from government websites. Not plucked from any coconut or durian tree. You can easily search and verify them.
Sometimes, my parents and I do talk about it. And even now, the conversation will be something like this:
Me: "You see, if only you guys purchased the condo back then, you guys can sell and take the money to travel. I don’t have to worry about supporting you guys also haha"
Dad: "Aiya, who knows what will happen? At that time, we scared what"
To be honest, that's the case I believe for most families. So, if it comes down to you, what will you do? Understandably, it is super intimidating when it comes to making property purchases. But if you are equipped with good and sufficient information on real estate, I believe you will find the confidence and trust to take the leap of faith.
That concludes my first case study and thank you so much for taking the time to read!!
Upcoming will be my own case study. Why I regretted my purchase. Not completely, but I will DEFINITELY do things differently.