Not All Condos Are Equal: Old or New Properties?
In 2007, I had 2 buyers who came to me wanting to buy properties.
The first buyer, against my advice, bought an older condo at Holland Peak for $2.36m. It was built in 1994. He was attracted to the space of the 1819sf 4BR condo. It was then rented out at $4.5k.
He got tired of the low yield and subsequently in 2011, he sold it at a loss for $2.2m.
In the same year that the first buyer bought Holland Peak, the 2nd buyer took up my advice to buy the brand new about-to-TOP 4BR unit at Montview. He paid $2m for the 1744sf sub-sale unit. Upon T.O.P. not long after, the market rent was $6.5k. His family chose to stay there till 2011. It was then sold at $2.6m, making a tidy profit.
Both Holland Peak and Montview are FH properties. Both are in District 10. The former was built in 1994 and the latter 2008. Both ended up differently in terms of rental yields and capital gains.
What is the moral of the story? It is usually wiser to buy newer condos even if they are smaller and usually more expensive $psf.
It is not wrong to buy an older condo for own stay, if space is a must-have for you. But if you are looking at higher rental yields and potential capital gains, then opt for new condo.
Many buyers buy with a mindset of what they want and like instead of looking further ahead. They think they will stay there or keep the property forever with no intention of selling in future. The focus is on the entry point and forget about the exit strategy. That’s why many have regrets about their purchase years down the road.
There are many, many considerations when buying a property, be it for own stay or investment. Do contact me for a non-obligatory discussion to help you with making the right choice.
Danny Han has been a licensed real estate agent since 2005. He also had five years of experience as a financial consultant. The insights and knowledge he shares in his blogs are the results of years of experience in helping many of his clients in their Property Wealth Planning.
Prior to becoming a real estate agent, Danny was a full-time church pastor (don’t be shocked!) for 23 years. Even now, he is still actively involved in church work and preaches regularly. He has also made six mission trips to Myanmar to-date.
Danny is a foodie, so during his spare time he would go with his kakis to try different “CNG” (cheap and good) food. (Be sure to check out his Holland food blog in this site).
Do feel free to drop him a Whatsapp message for a non-obligatory discussion if you are planning to grow your property wealth.