{"id":6554,"date":"2016-07-23T18:06:20","date_gmt":"2016-07-23T10:06:20","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=6554"},"modified":"2022-07-01T04:03:09","modified_gmt":"2022-06-30T20:03:09","slug":"hard-truths-landlords-singapore","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/hard-truths-landlords-singapore\/","title":{"rendered":"4 hard truths for a new landlord in Singapore"},"content":{"rendered":"
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At some point, Singaporeans got the idea that the whole “landlord” thing is easy. All you need to do is buy a house, rent it out, and eventually sell it. That’s like saying all a heart surgeon has to do is open your chest, massage your heart, and sew it back. It sounds way easier on paper than it actually is. If you’re about to join the whole property scene, take a minute to digest some hard truths:<\/span><\/p>\n

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  1. \n

    Unless you are super rich, vacancies hurt way more than you imagine<\/b><\/b><\/h3>\n<\/li>\n<\/ol>\n

    You’ve heard the usual babble about holding power, so you (hopefully) know the grief behind vacancies.<\/span> In order to prepare you psychologically, let’s give you a real world example of what happens when your property goes vacant.<\/span><\/p>\n

    \"Having
    Having a unit vacant for more than 2 months can significantly affect cash flows for a new landlord<\/figcaption><\/figure>\n

    Let’s say you buy a property to rent out, and the loan is $960,000. Assuming an interest rate of 1.8 percent per annum over 25 years, one month’s repayment is around $3,977.<\/p>\n

    (<\/span>And if you\u2019re in the fourth year or so, the rate will probably be over two percent, making the monthly repayment anywhere between $4,200 to $4,500<\/span><\/i>).<\/span><\/p>\n

    Now, a vacancy can happen for a huge number of reasons: the tenant got retrenched and is going back home, or if they’ve been here long enough to buy their own flat, and so on. That poses the risk that your property is vacant for a month or two, and you will have to bear that mortgage without the rental income.<\/p>\n

    Have you given a thought – <\/span>real careful thought<\/span><\/i> – to what it takes to make up that amount? Here’s what often happens:<\/span><\/p>\n