Although Singapore is known for its high standard of living internationally, especially the price tag attached to property in general, it is still very possible to buy a property and be a home owner before you turn 30. You don’t need to have a very rich dad to achieve this but you certainly need a consistent income from your day job (or business) and a decent amount of discipline.
Think about your 5 year plan
- Are you a career-minded person? Do you plan to focus on building up your career and climb up the corporate ladder?
If your answer is yes, you would not be surprised if most of your time is spent in the office and without knowing that your cash sitting in your savings account and CPF could be better utilized.
- Are you starting a family in 5 years?
Quickly get married and buy new HDB flats (BTO) when you are still eligible. That CPF housing grant can cut a good few grands off the purchase price (or down payment) when you need them the most. Start by reading the 4 most common mistakes Singaporean make when buying their first home.
Boost your credit rating
- Do you really need a car? Luxury apparel?
Getting a car loan of 5 year repayment period severely damage your affordability for purchase of property. Furthermore, with Total Debt Servicing Ratio introduced, you only have 60% of your gross monthly income to play with, would you bet on revenue generating asset (property) or expenses only asset (car)?
- Are you paying off your credit card bills on time?
Credit card is best used when you can pay them off entirely without incurring any late charges or interest fees. Otherwise, you will take years to pay off your balance due to the huge sum of compounding interest.
Save, save, save
- If you save at least 50% of your net income every month, you can be assured of to save $100k cash by 30 years old (starting from 25 years old).
- It is reasonable to give yourself and loved ones a little treat once in a while, but do not be extravagant. In order to maintain your expenses as your income increases, an easy way is to lock them in deposit, bonds or other risk-free financial instrument.
Talk to professionals
- Bankers – get in-principle approval by giving them a call. Some banks even allow you to submit a request online for them to get back.
- Real estate agents – get insight on current undervalued properties in his/her exclusive network as most distressed sale won’t even make it to public listing portal.
Joint ownership with your buddy
- In Singapore, unmarried singles are allowed to co-purchase a private property in Singapore together with another 3 unrelated persons (maximum). Do note that you are only allowed to use your CPF for property purchase once as a single. Unless you get married, you will not be able to use any funds from CPF account for the next purchase.
- By using tenancy-in-common as the ownership scheme, co-owners are not required to have equal share and the rule of survivorship does not apply. This makes the sale of any partial share of the property simple and straightforward. Hence, you do not really need to find another person with similar cash or CPF savings as you, the legal contract will take care of that.
Do your homework, a lot of them
- Identify which stage of buying are you at now to align yourself in the right direction.Understand the element of LUCK in real estate investment; leverage, undervalued, create value and key locations. Start to speak to friends who are of similar age on how did they manage to buy a house. You will then realize some good ways to adopt and some negative experience to be mindful of.
It is not that difficult right? I hope you are seeing some lights at the end of the tunnel after reading this. Whether or not if you have start the quest on buying your first property, always remember to keep your ultimate goal in mind and never stop to find better solutions to achieve your goals. Regardless how the media or your friends are creating inconsistent sentiment about the property market, it is now the time for you to search for your own answers. Start now, ensure discipline, keep calm and buy a property!