Is Holding on to your HDB a good decision?

What should you do?

Choice # 1 : Do nothing

1. CPF 2.5% per annum

The longer your CPF used in the property, the more accrued interest you have to pay back from selling the house. Compound interest effects. That means you have less cash to take back. 

Do you know?

Some people cannot sell their house due to negative sale proceed.

2. Depreciation of property value

3. Inflation. Your property should be an hedge against inflation.

4. You have not put your money into good use

Many wise people already make rounds of profit in every 3-5 years. Plus, some pay the same monthly instalment and get to live in a new property.

5. Attitude

You simply "bo chap" giving your family a better living and planning your retirement.

Choice # 2 : Keep my HDB and buy another property

1. Additional stamp duty

BSD 3% + ABSD 12% = total 15% goes to the government. How many property can make more than a profit of 15%? Is it worth it?

2. Restriction of max loan-to-value (LTV)

If you have not cleared your first loan in the first property, you can only borrow max 45% for 2nd property.

3. Restriction of CPF usage

If you use CPF for your 2nd property, you have to put aside half of the minimum retirement sum. For e.g. Turning 55 after 1 jan 2020, Retirement sum is $181k. Must put aside $90,500 !!

4. I have no above financial issue and able to buy the second property.

Congrats you are one of the few who have this type of financial power. However, you have simply ignore the fact mentioned earlier about holding on to HDB as a bad asset. Why not get a second better investment?

5. I got Sentimental value

Your sentimental value or a better future for your family and planning your retirement?

Which is more important?

Choice # 3 : Sell my HDB and buy the next better property
Which? How? 

Resale Vs New Launch

Why buy new launch?

1. Protected Entry Point

2. Lower Breakeven Point

3. First mover advantage

Choice # 4 : Sell one and Buy two property
Congrats! You will achieve your financial goal faster.
Engage Jackson HP: 8118 9640 for a financial calculation.

Frequently Asked Question

Q1: I need the money from my existing house to buy the next property. At the same time, I need a place to stay. How?
A1: After selling the house, rent a place. Take advantage of the soft rental market. ($2k x 12 = $24k a year is less than +$100k profit made in the next property)
Q2: I don't want to pay higher monthly instalment for my next property. Possible?
A2: Many people have the misconception that a more expensive property will need to take a bigger loan that results in higher monthly instalment.
It all boils down to the financial calculation. You may not need to take a bigger loan if you have enough CPF and cash portion from property sale proceed and CPF OA.
Even if you need to take a higher loan, there are ways to lower the monthly instalment such as renting out or do loan tenure stretching.
Q3: I scare I lose my job and can't pay monthly instalment for my next loan. How?
A3: Private property allows you to cash out with term loan compared to HDB. Plus, set aside at least 6 months of instalment for rainy day.
Q4: I don't want to touch my cash saving for the next property purchase. Possible?
A4: It is possible. Engage Jackson for a proper financial calculation with solution.
Q5: I own a HDB. Can I afford to upgrade to condo?
A5: There are many ways to afford a condo without any stress. Engage Jackson for solution.

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