Upgrading to a Condo is not Always Feasible
I had a chat recently with a friend who has indicated she wants to upgrade to a private condo.
She is a 57-year-old single mother with a university-bound daughter. Currently owned a colossal jumbo flat that is worth about $750k.
I did some calculations to see the amount of sales proceeds she will get from the flat. Besides, I also assessed her financial resources and checked on her maximum loan amount. Our conclusion is that upgrading to a condo is not the best thing for her to do. It would be too stretching for her.
Why is upgrading to a private property not always feasible for everyone.
Age is one big factor.
At age 57, to take up a housing loan with only 8-year loan tenure will mean high monthly mortgage payment. Loan amount will also be limited.
At age 57, in most cases, it is not the time to build your property portfolio or to upgrade…unless you have a lot of cash in your piggy bank.
At that age, it should be harvest time, not sowing time. Age 28 to 45 is the best time for property wealth creation; 45 to 70 for property wealth accumulation; thereafter possibly property wealth distribution.
There is a season for everything.
If my friend were 20 years younger, based on the same monthly income of $5,500, she would be able to borrow up to $706,000. But at her current age she is only eligible for $276,000. That is a huge difference.
Property wealth creation should start young.
Associate Deputy Group Director
OrangeTee & Tie Pte Ltd
Danny has been a licensed real estate agent since 2005 and has helped many in Property Wealth Planning.
Do drop him a Whatsapp message or send him an email for a discussion if you are planning to grow your property wealth.