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 this age, 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.

This season of life should be harvest time, not sowing time. Age 28 to 45 is the best time for property wealth creation; 45 to 60 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 as young as possible.

Age versus Loan Amount (based on $5,500 monthly income)


To illustrate the importance of starting young, take a look at the table above.

Assuming someone with a monthly gross income of $5,500. If he or she has no other loan commitments, the maximum amount of loans eligible are shown in this table.

Since the maximum loan tenure is 30 years or up to the age of 65, age 35 is the critical age. After 35, the maximum loan tenure starts to diminish from 30 years, and the amount of loan also reduces in tandem. 

Comparing a 40-year-old and a 55-year-old, the eligible loan amount is about halved.  As such it is important to start as young as you are able to.

If you are thinking about embarking on the journey of Property Wealth Planning, you can contact me for a non-obligatory discussion.

danny han pwp

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.

Before becoming a real estate agent, Danny was a full-time church pastor (don’t be shocked!) for 23 years. He is still actively involved in church work and preaches regularly, and he has also made six mission trips to Myanmar to date.

During this pandemic, Danny discovered a new love for hiking. He has covered most of the nature trails in Singapore, including some off the beaten track. 

Besides being an avid hiker, Danny is a passionate foodie. His motto is “walk to eat”. During his spare time, he would go with his wife to try different “CNG” (cheap and good) food. (Be sure to check out his Holland food blog on this site). 

Do feel free to drop him a Whatsapp message for a non-obligatory discussion if you plan to grow your property wealth.

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