Many people believe that the best way to prepare for retirement is to consider investing in property and in many cases this can be the truth. Many Singaporeans have the dream of being able to collect money by doing nothing aside from owning property and many countries around the world have been using this type of investing to their benefit. In the past, investing in property was something that was only available to the rich, but today you can also take advantage of it with a reasonable sum of money.
Think About Property Loans
One of the most important things to remember is that unless you have hundreds of thousands of dollars sitting in a savings account, it’s likely that you’re going to have to apply for and be approved for a property loan. In today’s day and age to be approved for a property loan it’s calculated based on the amount of money that you accrue monthly and your outstanding debts. This can include unsecured loans, credit card debt, and car loans. The total amount of debt that you have can’t be more than 60% of your income, for example, a $10,000/month income can only have $6000 in debt.
Minimum Occupant Period
When you decide that you want to invest in real estate and potentially rent it out to residents of Singapore, it’s essential that you take the Minimum Occupant Period into account. This is something that a variety of countries have recently implemented to better regulate people that are interested in investing in properties. With the minimum occupant period you won’t be able to sell your property for at least 5 years, meaning that it has to either remain as a personal dwelling or a rental for that period of time.
Finding the Right Tenants
One of the largest concerns that most landlords have with any property is making sure that they find the right tenants for their space, unless you decide that you want to live in the property which wouldn’t make it much of an investment. Remember to take the time to research the area for where you want to buy the property to make sure that the demand for rental properties exceeds the supply. This is a major concern in Singapore because there are a variety of properties available with less people looking for space. Without tenants you are responsible for covering all of the monthly bills that are associated with your investment.
Getting the Right Value
Above all, it’s important that you consider the amount of money that you’re going to get for your property. It’s quite often that landlords find their properties are undervalued and although this can be beneficial for tenants, it can be incredibly detrimental for your finances. Whether you are establishing a monthly rent amount or if you’re figuring out how much you want to sell your property for, make sure that you aren’t undersold. It’s often that owners lose 50% of the value of their property by selling at the wrong time.