My First Investment Property (Part 2)


Question: Why did I choose a west-facing patio unit?

Answer: Because I did not have a choice. All the good units were sold out. I ‘die-die’ wanted to buy something! (P.S. For readers not familiar with our Singlish language, ‘die-die’ means certainly or definitely)

JUST KIDDING! Being an investment professional, if that was the basis of my purchase, I would have failed in my fiduciary duty in doing sufficient due diligence to protect my own wealth! The reasons that I chose this unit were:

  1. The west-facing side of the unit was the PES (private enclose space) of the bedroom. Recall that units sold during those days have large patio spaces as PES were not counted as GFA back then and developers maximise their saleable areas by selling big PES spaces. Hence, the large PES acts as a buffer against the west sun and the room would not feel as warm as a unit hit with direct west sun
  2. The developer was kind enough to build a RC extension to the balcony of the unit directly above to shield the PES from litters and sun, hence, creating another buffer against the west sun.
  3. The generous PES would probably help to make this particular unit more ‘liveable’ and not so claustrophobic when compared to other 1-bedroom apartments around
  4. The internal layout of this unit was pretty efficient. Perfect rectangular shape, minimal space wastage to internal walkways and circulation area. This is particularly important for 1-bedrooms, where space is already a scarce commodity. You definitely want to make every square foot count!
  5. The unit was located at a corner of the development where nobody will walk past. Ample privacy for the unit.
  6. The elevated residential tower above the retail mall ensures that even a low floor unit gets to enjoy a good view and breeze. Hence, no reason to pay more and get a high floor unit for investment purpose.

So, the moral of the story: Every property development and house is different. It is important to understand the attribute of a particular unit to make an informed decision and judgement, instead of ‘generalising’ a unit. And along the way, you may find a good bargain!

Sounds good? But what about the price? That would have been the most critical factor in decision making. Due to the large PES and low level of the unit, the developer was marketing the unit at S$1,0xx psf. Not too bad price, I thought. Optically, it looks good as other typical units were selling at S$1,3xx psf. Downside risk seems mitigated, and upside can be significant. Potential capital appreciation could come from a close in price gap with the rest of 1-bedrooms in the development and general market uptrend. Rental yield was a good 4% to 4.5% per annum. Ok, decision made. Time to write a cheque.

But that’s not the end. How to finance the purchase?? Cash? CPF? Bank Loan? Buy 4D/Toto?

This article first featured on Singapore Property Kaki blog.

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