Monday, 30 November 2015

Goodbye SGE and Welcome SKX

Today, I say goodbye to my 10-year old car with the licence plate SGE. That was almost 10 years ago car. It is sad to part with it since it has served me well for the past 10 years. It has not broken down once. I think it is due to the regular car servicing and maintenance with C&C. The only thing that I have replaced is the timing belt and one time tyre change. Amazing that I have clocked 180,000 km with this car and yet when my colleagues sat in my car, they always said that it is a waste to scrap it.

Yes, there are some problems though as it ages:
  1. The horn is spoilt. Actually, the connectors are worn out and will connect automatically when the car is parked under the hot sun. I had to remove the fuse to conserve battery.
  2. The leather at the driver's seat has cracked at the side but no issue.
  3. The radiator is leaking. I have to top up the water to the reserve tank every 2 to 3 days.
  4. The engine brackets are corroded and the engine is supported by the mounting. No issue but it may vibrate a bit.
  5. The suspension on the front tyre has issue and will vibrate and create some noises when the road is uneven.
I think the wear and tear is not too bad as compared to other cars. I must say that I was thinking of renewing my COE for another 5 years while waiting for the COE and car prices to drop further. However, I think I will lose my scrap value and need to replace the 5 items should I choose to renew my COE. After much consideration, I decided to purchase a new car.

I made my decision quite timely when LTA said that the COE quota for Nov to Jan will reduce because fewer cars were being scrapped. I chanced upon this and quickly made a purchase and locked in the COE. After two rounds of COE biddings, the prices of cars started to increase by $2K. Luckily I managed to save this $2K.

Tuesday, 17 November 2015

How to invest in property in Singapore?

How to invest in property in Singapore? Many people will ask themselves as the property price has skyrocketed over the past years. They are waiting for the price to come down but still every year it keeps increasing and you will never know the right price even when it comes down.

If you are a salaried couple who earn say a combined income of $10K and above, I think you should go and buy a HDB. Don't buy a DBSS as it is overpriced unless you really, really want to buy one. For information, DBSS has been discontinued already as it is not that value for money. Buy a 4-room or 5-room or even an executive unit that falls within your means and budget. Buy a new one and not a resale as it is cheaper to buy new one with the grants given by the government.

A typical 4-room flat at Bukit Batok for example, starts at $272K before grants. After grants, it is about $217K. The flat can be easily paid off within 10 years. After the flat has been paid off after 10 years, the couple can consider to buy a private property. Once the loan has been paid off, the couple can borrow 80% of the private property price from the bank. Consider a condominium with a price-tag of $1 million, the couple needs to come out with only $200K plus to purchase the private property. Of course, the couple will need to check with the bank whether they can borrow the 80% of the property price. My advice is to go to the bank to ask for loan in principle before signing on the dotted line for the property.

The private property if newly launched will take about 2 years to complete. So, still have time to save up for the renovation of the unit.

Since you are staying at the HDB flat, you don't need to worry about the completion of the property or TOP date. After the TOP, you will need to do defect rectification and then renovation. This will take about 2 to 3 months. After the renovation, you can start to move in and in parallel when the renovation starts, you can look for tenants for your HDB flat. A typical 4-room flat rental is around $2.5K for the whole unit. The monthly instalment for the condominium loan is about $2.2K. The maintenance fee is about $250 per month. So the rental for the flat can almost cover the instalment plus the maintenance fee. Assuming the couple rents out the flat for the next 15 years and also saving to pay off the loan, I think the outstanding loan can be paid off within 15 years. Then on the 16th year onwards, the rental will be a passive income for the couple.