I've written about HDB 99 year LEASE a couple of times.
https://earlyretirementsg.weebly.com/blog/the-99yr-hdb-lease-time-bomb
https://earlyretirementsg.weebly.com/blog/what-it-really-means-when-you-buy-your-hdb
https://earlyretirementsg.weebly.com/blog/why-is-it-so-hard-to-understand-99-year-lease
https://earlyretirementsg.weebly.com/blog/are-99-year-properties-good-investments
Note: LEASE is in caps... cos... LEASE is LEASE. You don't own it. Tell yourself whatever you want.
Anyway, I've accepted that I don't own my HDB.
And I'm ok with that.
For the past 2.5 years when I've been out of the country, I've been renting.
I don't know how much the rental was in Paris, cos the company handled it.
But in US, the apartment cost me US$1,830 every month.
I signed a 99 year lease contract with HDB to rent this place at Dawson for S$45x,000. I forgot the exact price I had to pay for the BTO.
This works out to be around S$400 per month using straight line depreciation.
(Not counting bank loan and interest.)
Current price for a similar unit in the block I stay is around S$820,000.
So even if I take over someone's remaining 93 year lease from within the same block, it works out to be under S$750 per month.
*Notice how I phrased it ;)
For a first world country, we are paying some really cheap rentals.
Sure, it's not a condo, but it's not shabby either. Most of us have a park/playground near where we stay, we have coffeeshops nearby, easy access to food and amenities.
This low rent is of course only available cos we're paying bulk prices for a long term contract.
Current market rent for an HDB is maybe S$1,500 per month. Which is starting to be pretty expensive.
The thing is, we/I always have a choice.
I can move to a freehold property, and yet I choose not to.
There are some cheaper freehold properties in some ulu places. Not great location but it's still freehold.
I like the idea of "fully paying" my rent for the rest of my life. So that I don't have to worry about having a roof over my head.
Yes, from an investing point of view, it's not the brightest idea.
But from a stress and mental point of view, I feel it's the direction for us.
My wife can leave her job anytime she wants cos there's no loan.
I don't want to have a situation where we're sitting on a loan and my wife isn't free to move as and when she wishes, and if markets turn bad, I end up with a situation where I have a loan and my investments aren't doing well enough to easily pay off the loan.
Wrote about this here.
https://earlyretirementsg.weebly.com/blog/defending-your-position
The thing is... well... I've come to be more ok with not owning my HDB and that it's just a long term lease. Rental at S$500 per month, or S$700 per month. That's already a steal.
Furthermore, I could easily transfer the remaining lease of my current place to someone else and take over the lease of a place on the east side and nearer to our parents and we would likely get a bigger HDB and even get some money back.
Bulk purchase of long term rent really isn't that bad if you think about it from an expense point of view.
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https://earlyretirementsg.weebly.com/blog/the-99yr-hdb-lease-time-bomb
https://earlyretirementsg.weebly.com/blog/what-it-really-means-when-you-buy-your-hdb
https://earlyretirementsg.weebly.com/blog/why-is-it-so-hard-to-understand-99-year-lease
https://earlyretirementsg.weebly.com/blog/are-99-year-properties-good-investments
Note: LEASE is in caps... cos... LEASE is LEASE. You don't own it. Tell yourself whatever you want.
Anyway, I've accepted that I don't own my HDB.
And I'm ok with that.
For the past 2.5 years when I've been out of the country, I've been renting.
I don't know how much the rental was in Paris, cos the company handled it.
But in US, the apartment cost me US$1,830 every month.
I signed a 99 year lease contract with HDB to rent this place at Dawson for S$45x,000. I forgot the exact price I had to pay for the BTO.
This works out to be around S$400 per month using straight line depreciation.
(Not counting bank loan and interest.)
Current price for a similar unit in the block I stay is around S$820,000.
So even if I take over someone's remaining 93 year lease from within the same block, it works out to be under S$750 per month.
*Notice how I phrased it ;)
For a first world country, we are paying some really cheap rentals.
Sure, it's not a condo, but it's not shabby either. Most of us have a park/playground near where we stay, we have coffeeshops nearby, easy access to food and amenities.
This low rent is of course only available cos we're paying bulk prices for a long term contract.
Current market rent for an HDB is maybe S$1,500 per month. Which is starting to be pretty expensive.
The thing is, we/I always have a choice.
I can move to a freehold property, and yet I choose not to.
There are some cheaper freehold properties in some ulu places. Not great location but it's still freehold.
I like the idea of "fully paying" my rent for the rest of my life. So that I don't have to worry about having a roof over my head.
Yes, from an investing point of view, it's not the brightest idea.
But from a stress and mental point of view, I feel it's the direction for us.
My wife can leave her job anytime she wants cos there's no loan.
I don't want to have a situation where we're sitting on a loan and my wife isn't free to move as and when she wishes, and if markets turn bad, I end up with a situation where I have a loan and my investments aren't doing well enough to easily pay off the loan.
Wrote about this here.
https://earlyretirementsg.weebly.com/blog/defending-your-position
The thing is... well... I've come to be more ok with not owning my HDB and that it's just a long term lease. Rental at S$500 per month, or S$700 per month. That's already a steal.
Furthermore, I could easily transfer the remaining lease of my current place to someone else and take over the lease of a place on the east side and nearer to our parents and we would likely get a bigger HDB and even get some money back.
Bulk purchase of long term rent really isn't that bad if you think about it from an expense point of view.
<<PREVIOUS POST // NEXT POST>>
Did you like this post? If so, could you "belanjah" me 1/4 cup of my morning coffee pls.
You may also consider subscribing to receive the articles in your email, link in the column on the right.
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