Understanding your property’s potential and knowing when to seize opportunities is key, says leading realtor Agent Sha
How do you make a profit from selling your five-room HDB flat and purchasing a deluxe condominium unit when the latter is three times higher in value? Married couple Mr. and Mrs. Karim shows how this is entirely possible even in today’s economic downturn due to the Covid-19 pandemic.
Mr. and Mrs. Karim had been living in a 5-room HDB flat in Woodlands for 18 years. But despite having paid fully for it, their flat would only give them a nett cash proceed of $23,000. To make matters worse, this would only dwindle further if the couple continued living there.
The couple realised that a change was in order, especially with retirement on the horizon. They wanted to make no mistake in their next property choice and make up for the losses incurred in the last 18 years of owning an almost unprofitable HDB flat.
Mr. and Mrs. Karim made their desires known to Agent Sha, Senior Associate Marketing Director of PropNex and an asset progression realtor. The couple’s objectives were clear: To make as much capital appreciation as possible during the next 16 years while they had an active income and enjoy worry-free retirement.
By analysing facts and data, Agent Sha recommended that the couple choose a property that was of higher value than their Woodlands flat. The property had to be ideal for own stay and yet could be resold for greater profits in future. A new launch, rather than a resale unit, would also help the Karims achieve capital appreciation and accumulate more profits before retirement.
With a budget of $1.5 million, Mr. and Mrs. Karim set out on their search for the dream home: A three-bedroom unit with a yard and a utility room. A financial payment plan tweaked to suit the couple’s income and situation allowed them to comfortably afford the downpayment without touching their savings. They could also repay the monthly instalments for the next nine years without any additional cash top-ups.
Even with such narrowed requirements, the couple had over 16 developments to choose from. Of these, only three came up to be undervalued developments worth considering. One development in particular stood out from the rest: A three-bedroom deluxe unit at Florence Residences that was ideal as both a home and an investment for the couple.
Agent Sha shared how he arrived at his findings: “Various metrics like the developer’s breakeven price, the developer’s current profit margin on individual unit types, resale and new launch volume, transacted prices within the district, and future possible selling price projection to current buying power were taken into factor.”
Florence Residences also has the additional advantage of being in close proximity to Hougang MRT station, which would run on the Cross Island Line by 2029. The empty land plots surrounding this MRT station and Hougang Mall further suggest possible rejuvenation in the area that may boost the couple’s gains in the years to come.
In August 2019, Mr. and Mrs. Karim purchased their dream home: A $1.45 million high-floor unit at Florence Residences. Today, a similar unit one storey below the couple is priced at $1.57 million. This means the couple are currently sitting on a healthy gain of $122,000 in under one year since booking the unit.
The Karims are not the only ones who invested in a profitable property despite challenging circumstances. Five of Agent Sha’s clients who bought properties slightly before, during and after the Covid-19 circuit breaker are currently sitting on gains ranging from $60,000 in two months to $230,000 in six months.
Agent Sha said: “In every situation, there are opportunities. These gains came as a result of dissecting facts and figures, and fully understanding each property’s potential. Numbers never lie and based on past trends, high profits have been mostly achieved when the transaction volume is lower and supply of newer units is higher. Do not shy away from discovering your unknown opportunities in any seemingly dire situation.”
(Syndicated press content)
