HOME UPGRADERS
When you realize you've been in your first HDB apartment for over five years, time seems to fly by! With your MOP milestone approaching, it's definitely time to start considering your next steps.
Whether you're considering an upgrade from BTO to EC, a private condominium, or a landed house, let me show you how. You might have noticed on social media that you can upgrade without touching your savings, this is also true. But before we can arrive to this conclusion and figure out how to achieve it, we need to do proper financial assessments.
Many people believe that various types of property are out of their price range due to their current income, but they are unknowingly restricting themselves, because there are several methods to overcome any challenge. Do you want to lose an opportunity and be regretful when you look back on your lives in 5 to 10 years?
You will discover how to develop your money systematically utilizing the safety net strategy through this sharing.
What You Need
To Know
Countless HDB owners are concerned about upgrading their homes.
With a combined income exceeding $8,000 and owning your HDB for over five years, employing a comprehensive financial plan along with our straightforward yet efficient Home Progression Strategy could potentially enable you to...
1. Upgrade to a condo with no cash top up
2. Own 2 properties and create passive income
You can keep a good amount of money of up to $100,000, for unexpected expenses. Plus, you get to plan how you want to invest in property for the next 5 to 10 years! Additionally, it's worth noting that HDB owners who made their purchase before 2013, coupled with a household income of $8,000 or higher, are currently in a more favorable position to achieving their property goals.
Should I still upgrade if my
HDB is almost fully paid off?
If you're putting a large portion of your CPF savings into your HDB, you might actually be using up your wealth. A lot of HDB owners do this by using their CPF to pay off their HDB loans.
You might think it's a good idea to use CPF for your monthly payments to cut down on your monthly costs. But if you don't have a smart plan for using your CPF, it could affect your money situation in the next 5 to 10 years!
What does it mean?
Imagine you have $200,000 in CPF funds.
Every year, you earn CPF interest rate of 2.5%. One day, you decide to use this CPF fund of $200,000 to pay for your house.
Here's the catch:
-
Once you use your CPF fund of $200,000 to pay for your house, it will STOP earning interest.
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Not only that, but you'll have to pay back the $200,000 PLUS the interest you would have earned.
Considering a 2.5% CPF interest rate, in 20 years, that $200,000 would have grown to about $328,000.
So, by using it early, you're looking at a total interest loss of $128,000!
Case Study 01
A Man Aged 49, With An Income Of $8,000.
When the man, aged 49 with an income of slightly more than $8000 first approached me, his intention was to sell off his 35 years old 4-room HDB flat at Tampines and upgrade to a younger and bigger HDB in Sengkang to live closer to his family. He sees himself retiring in 3 to 5 years’ time. He wanted to eventually retire by either downgrading to a 3-room HDB as his last property move or renting out rooms to get rental income.
He had already fully paid his Tampines 4-room HDB more than 5 years ago, and did not want to burden himself with additional mortgage loan as he just bought a new car and is servicing his car loan. Even though Tampines is a prime location with mega malls, interchanges and amenities, he has seen his 4-room HDB flat prices fall throughout the years as the flat gets older.
He knew that he has to move on to a newer flat otherwise he will not have any profit. After doing in-depth financial calculations for himself, he was shocked to know that his CPF accrued interest is still growing yearly on a compounding basis even though he has fully paid off his HDB many years ago!
I shared with him the importance of changing to a right home, and how the right property can help him achieve his goals of early retirement instead of just being a hard saver. After our step-by-step home asset progression strategy, He is now a happy and proud Condo owner! Not only did David achieve his objective of staying close to his family members, but he also fulfilled his wish to give his mother, sisters and nieces an upgrade in lifestyle. And the best part is, with the reserved funds we have set aside for him, he does not need to top up any cash payments for his monthly mortgage instalments for the next 6.5 years even with his existing car loan!
Through the use of in-depth financial calculation and strategic planning, the man learned how to maximise the usage of CPF and INCREASE CASH returns from his property. Today, He is now looking at retiring eventually with a FULLY PAID HDB in years to come after cashing out from his condo!
Case Study 02
A Couple In Their Early 40s, With A Combined Income Of $11,000.
A couple, both early 40s with a combined income of $11,000, approached me to find out their options if they were to upgrade from their HDB Executive Apartment (EA) in Punggol. They wanted to know if they can upgrade to a condominium comfortably without any stress financially, and if they can eventually own a second investment property. They have been staying in their current HDB flat for 15 years, and still have an outstanding mortgage loan.
After doing their sums, both were shocked! They said that 5 years ago, they were thinking about upgrading to Condo but decided not to because they wanted to wait for the prices to increase before selling so that they can have better profits. Now, 5 years later, not only did their sale price dropped, their profit decreased by a lot too because of CPF accrued interest.
After understanding their home requirement needs, we went ahead to plan for them towards owning 2 properties safely, without any financial stress and still maintaining their current lifestyle.
Today, the couple are proud owners of 2 properties! They first upgraded to a 3-Bedroom New Condo for their own stay.
3 months later, Faith and Jimmy got their second 1-Bedroom Condo for Investment. Furthermore, they now have a proper asset progression plan to grow their wealth in a safe yet effective manner.
What YouWill Receive
01
A calculation method to recognise your financial standing.
02
A 4-step process for in-depth financial calculations including additional costs like legal fees, cash outlay, stamp duty, etc
03
3 ways to analyse the available options in the property market and determine the best choice that is suitable for you
04
A simple yet effective CPF Usage plan - with 4 precise steps to accumulate wealth earlier
05
A far-sighted “roadmap” that will allow you to retire comfortably
