Credit Rating Of Yourself

Ever wondered by the credit card you applied for got rejected?

Have you been paying your bank loans and credit card bills late and then asking for waiver?

All these lack of discipline attitude not only make you lose money upfront but also a great opportunity cost as you cannot buy some instruments that will appreciate just because bank refused to give you a decent loan. This is actually our own doing.


major loan

Cash-strapped Singaporean execs struggle to make ends meet each month

Indeed, in our current cost of living in Singapore, it is tough to make ends meet with only $3,500 income. However, insurance should be not be used as an excuse as it is not a spending but a prevention against greater lost. You may choose not to spend on insurance but save the amount instead. Many will end up paying more for medical should the need arise. Hence, spend prudently or take up additional income paying work.

Almost 1 in 2 execs have zero savings.

Even high-earning execs are having difficulty making ends meet in Singapore. A report released by Jobstreet revealed that 46% of Singaporeans holding executive positions claim that their salary do not leave them with any savings after spending on essentials.

A staggering 45% also claimed that they were tied down by loans originating from property, car and credit card, and 25% of respondents revealed that insurance is their biggest monthly financial commitment.

Against this backdrop, it was unsurprising that only 5% of respondents mentioned that they have enough money to spend.

When polled on how respondents would cope with the situation, 42% of the respondents preferred to cut down on their spending and 27% of the respondents preferred to pitch for a new job with a higher salary. The remaining percentage of respondents would either get a part time job or make investments for side income.

The survey covered Singaporean candidates holding executive positions across various industries.35% of the candidates surveyed have basic salaries ranging from $2,500 to $3,500 per month.

– See more at:

Capitalising on REITs Instead Of Buying Physical Properties

Most of the REITs are giving quarterly dividend and their returns can average from 3% to 9 % per annum depending on the stocks you acquired. As compared to physical properties, you can count your blessings if you are getting 5% rental yield and no tenant problem or late rent payment. Check out for more information.


Buying REITs has often been seen as an alternative to buying physical properties. Which is better for investments? What is the difference between the 2? This article explores the differences between buying REITs and actually owning the physical properties.

bedok point fct

While REITS have the similar exposure to real estate market, they are somewhat different when considered from a investment portfolio point of view. First, we will look at the advantages of REITs versus physical properties.

Advantages of Investing In REITs

High Liquidity

One of the main advantages of REITs is that entry and exit is relatively easy since they are traded just like stocks on the stock exchange. On the other hand, properties may take a while to find a buyer at the right price and transaction process generally takes a few months.

Invest with Minimum Capital Outlay

The minimum cost of most property investments is substantial, for example a $500,000 property with 80% loan to valuation will require $100,000 down payment not including other extra costs such as legal fees, stamp duty etc. For REITs, the minimum outlay is 1,000 shares and some REITs may cost less than $1,000, for example Starhill Global costs $800+ at current prices.

Management Team Handles Tenants and Maintenance

One of the most troublesome aspects of managing physical properties is dealing with tenants and maintenance of the property. There are many stories of bad tenants, tenants who don’t pay rent, damage your property etc., bad tenants can cause a lot of problems. It is also important to maintain the properties such as the roof, plumbing, painting etc. since the properties age over time.

Diversification into Office, Retail, Industrial, Healthcare

While it is easy to buy residential properties, investing in commercial properties take a lot of more knowledge and experience. Investing generally in office, strata retail and industrial properties are common for a commercial property investor, but buying actual retail malls will be very tough due to the high costs. REITs not only allow investors to take part in the largest shopping malls, but also hospitals, prestigious office buildings and more.

Disadvantages of REITs

Volatility of REIT Price

Since REITs are traded on the stock exchange, the stock price of the REIT is subject to market volatility like any other stocks. Physical property valuations are generally more stable and unlikely to experience wild swings on a daily basis.

Management Fees

While you save a lot of hassle with REITs, the management team does charge a handsome management fees which reduce your returns. Management fees are paid not only on the basis of asset valuation, but also each time a property is acquired or divested by the REIT.

Lower Leverage

In general most REITs have a leverage cap of 35% without a credit rating and up to 60% with a credit rating. Physical properties on the other hand can easily get 60% to 80% loan to valuation ratio. hence the returns can be much higher.

REITs Are a Good Addition to Any Portfolio

The combination of management fees and lower leverage means that returns from REITs are unlikely to beat returns from property investments. However, the high leverage in property investments also means it is more risky as a bad property investment can seriously damage a person’s financial wealth. All in all, REITs provide an easy, low risk manner to gain exposure to diversified portfolio of properties.

Developers giving away discounts in a desperate attempt to sell their properties

This information sounds like a package but is it really worthy to buy now when the price of property had dropped? But has the real price dropped compared to those property of the similar class?
Developers have started cutting prices and giving away discounts in hopes of reversing the bad luck that has been gripping Singapore’s property market. According to CIMB, both CapLand and Wheelock re-launched their projects, Sky Habitat and Panorama, respectively at 10-15% discounts.

Other incentives were also offered, with Keppel Land giving out Chinese New Year discounts and United Engineers offering special discounts on cars with purchases of certain units. New projects were also launched at lower prices, with City Dev and Hong Realty launching Coco Palms at S$980psf, 10-20% lower than the planned S$1,100-S$1,200psf.

Buyers are supportive at more reasonable prices 

Buyers responded positively to the price cuts. Sky Vue, with its more competitive pricing, achieved a much healthier take-up rate, compared to its more expensive adjacent development, Sky Habitat.

We also saw buyers reacting positively to price cuts, with Sky Habitat clearing more than 100 units since the re-launch. This reinforces our survey results that suggest weak demand is driven more by expectations rather than affordability.

Surprise Surprise Fire Sale

Just last Sunday, this data was featured on SPH Sunday Times. I was bewildered and took a check on some the property resale prices. I was astonished to see the drop in price. Some of the policies must be working successfully in curbing the over inflated property prices.
Do share the validity of these prices and confirm that they are true when printed. These values are worth tugging open our purse strings.

GUILLEMARD SUITES – price range – $1,200 – $1,728 psf / $1,429 psf

La Brisa – price range – $1,528 – $1,528 psf / $1,528 psf

Casa Fortuna – price range – $1,149 – $1,710 psf / $1,387 psf

Le Regal – price range – $1,015 – $1,345 psf / $1,081 psf

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An Example of Bad Property Advice- By Gerald Tay

I can’t help it. I read some bad advice recently and have to say something. I’ll try to keep it positive, but my tongue is already bleeding from biting it. In Singapore, inflation is on the rise, but this one thing is still offered for free – advice. It’s really funny to observe people taking it so lightly. But only the advice that makes you profit in reality (i.e. real profit not imaginary) is good, otherwise it’s useless or even disastrous.

Most people don’t know the difference between advice from rich people and advice from sales people. Most get their financial advice from the latter — people who profit even if you lose. In this post, I explore why one recently written article by ‘experts’ (sales people in disguise) will prove disastrous for both average investors and home buyers. Your task is to look for any hidden agenda.

An example of bad property advice

The article, Why 2014 is going to be the best year in buying property, appeared in Yahoo Singapore News on 16th April, 2014.The article aims to sell readers three ‘benefits’ of buying a suburban condo today:

1. Because You Can Afford a Better First Home Than You Realize

BAD ADVICE:The monthly salary needed to get the most out of your property purchase is $10,000 to $12,000. I know, it’s not the easiest number to reach. But if you and your spouse can climb your way to this number, you’ll be in a prime position to afford a fantastic first home.”

BAD ADVICE: “According to ERA key spokesman Eugene Lim, depending on whether your income is fixed and your finances are well within the Total Debt Servicing Ration (TDSR) framework, you should be able to afford properties priced between $600,000 and $1.2 million.”

REALITY CHECK: Having a combined income of $10,000 to $12,000 for married couples does not justify a worthwhile reason to own an expensive suburban condominium as their first home. The purchase is more conspicuous spending than financial prudence.

Most married couples I know simply live from pay-check to pay-check servicing expensive home and car loans to keep up with society’s expectations. If one spouse loses his/her job, their financial position gets tougher with kids along the way.

Suburban condos that are priced lower than $1 million today are very small units, either the 1-bedders or 2-bedders, spaces that may be too small for a married couple who wants to start a family. Today’s $1.2 million condos do not get you much space either, only larger mortgage payments. Even at a low 1.5% interest rate for a 30-year loan tenure on a 20% down-payment, a couple would have to fork out $3,300 every month. With interest rates at 3.5%, the mortgage payments jump to $4,300 every month.

REALITY CHECK: Total Debt Servicing Ratio (TDSR) guidelines are meant to serve the business interests of a lending bank to a borrower. They are not meant to serve as financially prudent advice for buyers.

Most couples with a combined income of $10,000 to $12,000 would do a lot better financially buying less expensive re-sale HDB flats instead. They could use that savings to acquire financial freedom instead of paying through their noses for a cage in the sky.

2. Because Falling Prices Make the Additional Buyer’s Stamp Duty (ABSD) Less Scary


BAD ADVICE: “What a 7% property drop would save you on ABSD – As you can see, falling property prices take the “bite” out of ABSD when it comes to purchasing a second or third property. You’ll even be able to save money, as the example above shows.”

BAD ADVICE: “If property prices drop by 7% to 10% over the course of 2014, which everyone expects will happen – the pain of ABSD actually gets nullified.

REALITY CHECK: I have received many emails from readers telling me they have gotten a great price on a property. One particular lady approached me excitedly about discounted developer prices for a project called Sky Habitat in Bishan recently.

“How good is the price?” I asked. “During launch, developer is selling units at $1,600 to $1,800 psf. And now they are selling only at $1,300 psf. What do you think? Is it a good buy?”

“How would I know?” I replied. “All you have given me is the price.”

“Yes!” she squealed. “Now my husband and I can afford it.”

Only cheap people buy on price.  Just because something is cheap or cheaper doesn’t mean it’s worth the cost. One of my most basic money principles: I buy value. I will pay more for value. If I don’t like the price, I simply pass. If the seller wants to sell, he will come back with a better price. I let him tell me what he will accept. I know some people love to haggle; personally, I don’t. If a person wants to sell, they will sell. If I feel what I am buying is of value, I’ll pay the price. Value rather than price has made me rich.

Whether you pay ABSD or not constitutes a small part of what’s important in the scheme of things. Looking at the overall picture of what really constitutes a quality investment is a better gauge than simply looking at savings and price alone.

REALITY CHECK: Banks do not lend money to borrowers because they’ve bought the property at discounted prices or cheaper than their neighbour.

Banks lend solely based on the ability of the borrower to repay the loan. They don’t care if you bought the property with great savings by buying at discounted prices, cheaper or less expensive than your neighbour. The bank’s only concern is, “Is the borrower able to service his/her loan on time?”

3. Because You’ll Be Able to Purchase Additional Properties with Little or No Financing

BAD ADVICE:But there’s another way to purchase property in this buyer’s market – buying property from new launches through the progressive payment scheme.”

BAD ADVICE: “In most new launches, units priced below $1 million are usually purchased quickly. That’s because payment for new developments is made progressively, allowing buyers who aren’t severely affected by tighter loan rules to buy smaller units with cash instead of financing larger units.”

REALITY CHECK: If a buyer decides to buy a smaller unit because he/she is severely affected by tighter loan rules, it simply shows he/she may already be overstretching on finances, never mind a smaller unit.

This is the equivalent of saying, “If I cannot afford a Ferrari, I will throw my money modifying a cheap Toyota Vios to look and sound like one.”

“If I cannot afford a second property in Singapore, I’ll just throw my money into a cheap overseas property I’ve never seen before.”

Many ‘experts’ have given advice that suggests buying with no or little money down is more important than buying a quality investment property. In your overall investment analysis, how you finance the property isn’t as important as buying one that will be a sound, long-term investment, i.e. quality properties that have positive cash-flow. Even if it’s 100% financed, a bad property is a bad property!

When you look at the noise out there, you will come across suggestions on what you should do, and have to determine the legitimacy of every idea presented to you. It’s often not easy to differentiate between good advice and a bad advice, so take care before you act on it.