In 2015, my partner and also I obtained the tricks to my HDB flat in Dawson Sky Terrace. We had actually gotten this level when we were at our initial jobs, as well as were eligible for a charitable number of real estate gives.
Now, this was an amazing HDB flat in an incredible area– yet it likewise set us back near $600,000, after finishing restorations.
Fast forward to 2020, we’ve paid up over half the cost. This is exactly how we did it.
First, I Obtained A Work Overseas In China
Numerous Singaporeans steer clear of the possibility of operating in China, but the nation truly supplies great deals of rewarding employment opportunities.
3 months after I accumulated the secrets, I obtained a quite incredible task posting to send me to Hangzhou for three years. More of the untold secrets are available at https://www.the-parckomo.com.sg
In total, I ‘d be obtaining a very generous $8,000 in revenue, plus my real estate and also relocation needs would be covered. This was greater than 30 percent boost over my previous duty.
It was a great deal. I jumped at the possibility. Residing in China was a great choice for me. In addition to providing my beneficial overseas experience, I also got to save a lot of money.
In Singapore, I invested approximately $2,000 a month on food, entertainment and transport. My home mortgage was additionally an additional $1,100.
In Hangzhou, I could get by on $500, with some effort. Now, I could raise my cost savings by $1,500, suggesting that I now can conserve some $6,300 a month. The savings could be used to offset part of the mortgage loan from Parc Komo price.
That said, I still had to pay my home mortgage so I.
Appealed to HDB to rent out my BTO
You usually can’t rent out your BTO flat during the five year MOP, but HDB will make an exception for you if you currently work overseas. We applied, and it got approved.
It was definitely sucky renting out the entire place before we properly got to stay in it, but my wife and I decided that it would take quite a lot of financial burden off our shoulders.
As for our tenants, we got a family friend who we could trust to rent the place for us for a total of $3,000.
This guy would be the master tenant, and he was free to sublet the entire place out and make some profit, but he ultimately would be responsible for any damage incurred. Yes, there was 100000% trust involved.
All things considered, $3,000 was more than enough to cover our mortgage, which was around $1,500. Added to the $6,300 I was saving, this came to around $7,800 a month in savings.
( In case you’re wondering, my
wife went to try to start a business in a developing country instead of
remaining in the country– hence the grant was approved )
The Math Looks Like This:
Savings from salary (excluding tax) 226,800
Rental Income 90,000
Costs from tenants messing up my place, minor repairs ~ 5000.
Let’s Talk About The Sacrifices Involved …
Now, you’re thinking: “WTF, of course if I was offered $8,000 to work overseas with accommodation paid for, I ‘d go too.”.
It didn’t turn out to be as straightforward or comfortable.
It meant a long-distance relationship, JUST after starting a new life together. My in-laws were furious I was spending so much time overseas.
Thankfully, my wife was extremely understanding, and also took the opportunity to explore a business of her own (awesome!) It could get trying as we met just once a month, but we stayed committed to each other.
After those three long years of returning home, our once new BTO wasn’t as fresh as it used to be. As you landlords might know, tenants leave marks and scratches all over the house, and some repairs have had to be made.
That feeling of being the first owner? We’ll never know what it’s like.
Singaporeans Should Be More Open-minded About Renting Out Their Flat.
In three years, I’ve paid up most of my home loan with the money I saved. Today, we’re still living in the HDB flat to fulfil the five-year MOP (because we didn’t live in the flat for three years; only the years you actually live in the flat count toward your MOP). One bedroom is still rented out for about $900 a month. Parc Komo is a beautiful freehold condo in the east of Singapore
In retrospect, one of my regrets is that I should have invested the money instead elsewhere (i.e stocks) given that the bank’s interest then was relatively low at below one per cent per annum (we used a bank loan and not an HDB loan for the flat; the HDB loan was more expensive at 2.6 per cent). That said, my wife has been in charge of the wealth accumulation, so we’re not doing too badly, either.
All in all, I ‘d still consider it a good financial move. Because we now have a daughter to support– getting the home loan out the way makes it a lot easier to breathe, it certainly helps.
Here’s what I think– Many Singaporeans face real difficulties paying their mortgage, or are caught in debt because this is an expensive place to live. But if you’re willing to tolerate some discomfort, there are workarounds.
I know that not everyone is able to earn $8,000 or work overseas. But here’s something most average Singaporeans can do: please considering renting out just ONE room– especially if you’re going through financial difficulty.