If you are new in Singapore, you will agree with me that it’s not easy to decipher between various types of properties. This guide is meant to help you jumpstart your house search if you are planning t buy or rent in Singapore. By the end of this, you will be able to navigate the process with less confusion.
You might have come across the initials HDB which stand for Housing Development Board. This is a short-hand to describe any Singapore government housing. The flats are the most popular with more than 80% of the Singaporeans living in HDB housing. These government flats are not available for foreigners to purchase but they can rent under strict conditions.
These properties share both private and public housing characteristics. It comprises of executive condominiums, ECs.
Executive condominiums are public-private properties. They share lots of similarities with private condominiums but with an edge of being HDB-issued. These houses come with a 5-years minimum occupation period before one is granted the right to sell it on an open market to PRs and Singapore citizens. For one to sell executive condominium to foreigners, it must be after completion of 10-years of construction.
In Singapore private residential properties are subdivided into two main categories: landed properties and apartment/ condominiums. Condominiums and apartment are the most popular private properties in Singapore. These are a more luxurious version of HDB flats. If you are an expatriate and want to buy a property in Singapore, private condos are the way to go as they do not have restrictions like in HDB flats and executive condo.
Singapore condos are one of the most popular private estates in the word. Compared to HDB flats, private condos are recognized by their provision of shared facilities such as tens courts, gym, private swimming pools and private security guards. Condos in Singapore come in the form of penthouse units, studio units, and individual and multiple-room units. (Reference: newfuturabycdl.sg)
Apartments in Singapore are similar to condos. However, they are part smaller with a less generous provision of communal and recreational facilities.
If an apartment or a condo does not have a lift, they are called a walk-up. They are low built to make it convenient to reach one’s unit.
Landed properties required high maintenance but ate unrivaled regarding size and privacy. The landed housing can be categorized into:
This is not a house by itself, rather a part of a different house. The house can also be attached t some other units.
Bungalows (detached houses)
This is one of the largest estates under the category if landed housing. A bungalow is detached adding privacy and exclusivity.
These are properties which are part of a row of similar houses joined together by a common boundary. While they are joined, each terrace property is on its own, walls and roof.
These are a hybrid housing designed to combine privacy and maximize space for landed properties. They have condo-style facilities.
There are two main categories of home interest rates; floating interest rates and fixed interest rates. Fixed rates mean the rate remains the same over the duration of the loan term. The fixed rate is higher than variable rates as bank take on the risk of inflation.
Fixed Rate Mortgages
These types of loan plan have a period of up to 5 years to clear. Depending on the plan you choose, you will incur a 1% plus rate. Payment is made monthly regardless of the interest rates fluctuation. Fixed rate mortgage offers predictability and stability especially in a country such as Singapore where the inflation rate is projected early and in most time, constant.
SOR Pegged Mortgages
SOR abbreviation stands for Swap Offer Rate.
To spare you the jargons of the whole meaning, SOR is a UD dollar funding where there is swapping of Singapore dollar funds for US dollar at a specific cost for a certain tenor, usually 1/3/6/12 months. The mortgage benefits from advantages given by the US Federal Reserve at a rate of between 0 and 0.25%. The only disadvantage of this type of mortgage is that the funds are in foreign currency and can influence the SOR rate.
Sibor Pegged Mortgages
SIBOR is an abbreviation for Singapore Interbank Borrowing Offer Rate. This is a transparent borrowing rate that gives inform the consumer what the interbank market interest rate us and the cost of borrowing. The SIBOR is publicly available on the web, Business Times and Teletext. Sibor rates are regarding 1/3/6/12 months. The longer the tenor, the higher the interest rates.
Combination of Sibor and SOR mortgages
The mortgage offers a unique proposition of using both SOR and Sibor mortgages. Some banks will switch between the two while they take advantage value of the mortgages plus a certain spread of your mortgage plan.
HDB loan mortgages
The loan is offered to HDB properties only. The current HDB mortgage rate stands at 2.6%, higher than plans provided by banks in Singapore. However, HDB mortgage offers a higher financing quantum compared to banks.
Interest only mortgages
This mortgage service the only interest on the mortgage. It is not allowed for residential properties. The financing of this type of loan s higher than standard mortgage plan. It is also available for commercial and International property loans
Board Rate mortgages
The mortgage is a bank own internal interest rate mechanism. Compared to SOR and Sibor, there is less transparency on how the bank arrived at the mortgage rate and pricing of your mortgage. Considering the insufficient mortgages transparency, some Singapore banks no longer offer Board Rate. Other have adopted standard universal Board rate system to improve transparency. In the recent past, the board rate mortgage packages have stabilized and may offer consumer with a value proposition for consideration.
If you plan to take a loan in Singapore, it’s advised that you compare all the rates using home loan interest calculator. Put the principal into consideration plus the monthly installment and see how much in total you will pay at varying loan terms. You can use the calculator only if you know the current rate offered on a different type of loans.
It’s the very first week of the month and time to cash these checks. It is not always simple, but I love owning leasings; specifically now when leas are through the roofing system. The difficulty now is discovering property to purchase. If you were fortunate enough to get a couple of homes the last couple of years you are most likely doing effectively, but perhaps you might be doing even much better! Here are 4 methods to do even much better on your rental portfolio.
Think about leasing additional area independently. There is a remarkable quantity of benefit in this. Garages right away enter your mind, but I have also leased storage sheds individually and have become aware of people leasing areas of the lot for horse boarding or extra storage.
I have a property now that I lease the garage out independently. It is a 2 car garage that I lease for $200 a month. This one method increases my earnings by 10% and there is little to no costs with the garage lease, so it in fact increases earnings by more than that!
Lease additional products
I have become aware of rental homeowner renting products such as TVs, computer systems, or furniture to increase earnings. I have refrained from doing that, but I have leased washer/dryers individually. Washers and clothes dryers have the tendency to break down so I will never ever include them with my rentals. If I purchase a property with a washer/dryer or I get one from an occupant that has vacated, I will usually either use it to the occupant free of charge or lease it to them. Clearly, leasing the washer and clothes dryer will increase the month-to-month capital, but you will be accountable if something fails. It might increase your headache, but it will also increase your revenues. If the occupant does not wish to lease them from you, you can use it to them free of charge or you will wish to eliminate them. The last thing you want is the obligation of guaranteeing the washer and clothes dryer works with no earnings for the extra trouble.
Charge occupants for utilities
For some factor this was a difficult one for me to do. I was taught early on that I, as the proprietor, must spend for the water. The argument is that water is the one energy company that can lien your house for non-payment. Although that holds true, it still makes since to have the occupant pay water. The worst case is the renter does not pay and you need to.
In my market, it is becoming more appropriate to ask the renter to pay all utilities, so why not provide what they anticipate? The 2 advantages are boost in capital for you and they will use less. I simply spoke with Travis in my workplace about this. He has a tri-plex that had very high water expenses. He was having problem figuring it out and was paying that costs every month as the property owner. This was cutting into his revenues by more than $300 a month!! The service for him was to pay a company $2,500 to put in a system to separately meter each of the 3 systems. Within one month, he found that a person system was accountable for the majority of the water use and found that they were growing cannabis. Those occupants were asked to leave and were changed with a better renter conserving Travis over $150 a month. His next action will be to start sending out billings to each occupant for their water use, which will increase his income by another $150.
This one may sound apparent but is typically neglected. Turnovers can be very pricey. In truth, it is not unusual for one turnover to destroy your earnings on a system for 2 or more years. The cause consists of loss lease, marketing for a brand-new occupant, repair work, and more. Lowering turnover can be made complex. Here are simply a couple of concepts to assist.
This is the single best way to keep your turnovers low. It is exceptionally essential to obtain quality renters, and the only way to do that is to evaluate them effectively. Certainly credit and criminal checks are important, but it is also a great idea to interview your possibility about why they are moving and why they wish to lease from you, call referrals, guarantee they can manage the lease and energy payments, have a steady drama free way of life, look after their things (appearance in their car when you meet them), and have an emergency situation contact that will help them if they enter financial difficulty.
Smaller sized lease boosts
In a hot rental market like we remain in, it is challenging to stay up to date with the speed where leas are increasing. Many times lease in the area is increasing much faster than I can raise the lease, which is a very favorable thing. The factor this takes place for me is that I do not wish to increase lease more than a renter can pay for. My experience is that if the renter cannot pay for the lease boost, they will not inform you. They will try to make it work and will ultimately fall back, developing an expensive turnover. It is better, in my viewpoint, to deal with your renter with affordable boosts and keep them pleased and paying their lease every month.
I simply had my upkeep group head out to a rental to unblock a shower drain. I got a costs for the service for $125. On the billing it pointed out that he found hair in the drain. Why is it my obligation to clear a drain that the renter obstructed? Well the response is … it’s not. My lease specifies that I am not accountable for any clogged up drain, so when I got the billing I developed a billing that I sent out to the renter with a copy of the lease and a copy of the billing I got for the upkeep call. I simply got the $125 check in the mail today. Now the renter is conditioned to take much better care of the system because I am not spending for problems they develop.
The other aspect of upkeep that has worked well for me is to look after products that I are accountable for immediately. I do not postpone at all. When I get an upkeep call, I will get my group on it immediately. The renter will usually speak with the person set up to repair the issue the exact same day. This has truly assisted me keep renters. I have had renters inform me a number of times how much they value that. It is not unusual for an occupant to ask me to lease them another place when they choose to move, and it is also not unusual for me to hear that an occupant remained longer than they desired just because I looked after them.
As I discussed, purchasing leasings is challenging today, so this is the best time to deal with increasing earnings on your existing portfolio. This will help you tremendously down the roadway as you do find extra homes.