I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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Wednesday, 22 June 2016

Passive Income From Rental

 
Highest yield now is 3.7%!
 
 
 
 

Posted by Createwealth8888 at 08:01
Labels:

11 comments:

  1. Singapore Man of Leisure22 June 2016 at 09:53:00 GMT+8

    Less than CPF SA 4% :(

    ReplyDelete
    Replies
    1. Createwealth888822 June 2016 at 10:16:00 GMT+8

      Other than the two CPF Jokers at the last election campaign; not sure how many really hate CPF interest rate?

      Delete
    2. Singapore Man of Leisure22 June 2016 at 11:16:00 GMT+8

      I'll never vote for people whose math is worse than me!

      Delete
  2. Createwealth888822 June 2016 at 15:24:00 GMT+8

    What so bad about collecting rental, any other pain points other than tenants calling in the night to get the landlord come down to fix the jam toilet bowl or leaking tap and faulty air con?

    ReplyDelete
  3. RayNg22 June 2016 at 15:26:00 GMT+8

    Wrong timing lah...

    High housing price with low rental ... 2 negatives acting each other, the outcome is low yield.

    However, some of them still smiling as they bought at much lower price and still enjoy > 5.5% yield + paper capital gain.

    ReplyDelete
  4. Siew Mun22 June 2016 at 16:50:00 GMT+8

    Look around you lah. Developer keep building and HDB Gahment keep building. Singapore got so many people to keep buying condos and flats meh? Foreign talents are trickling into Singapore. It's a matter of supply and demand. Amidst of TDSR, ABSC and etc measure.

    ReplyDelete
  5. RayNg22 June 2016 at 16:55:00 GMT+8

    Agreed that current property yield is not attractive.

    However,

    Property investment is using leverage to grows wealth.

    Some of us may be lucky and has the opportunity to loan up to 90% of loan when the property price is bearish.

    If the investment (rental income) is positive, the rental will service the loan without any cash injection.

    for example, bought Bayshore 2rm for $350K, and sold 16 year later for $680K. Capital gain is $330 with initial cap of $35K (940%).




    ReplyDelete
  6. Createwealth888822 June 2016 at 17:11:00 GMT+8

    The power of leverage when it is correct for those who are brave.

    Koon’s Investment Lesson #6: Margin Finance

    In all business schools, MBA students are told that they would be considered inefficient if they trade with only their own capital. They must borrow money from banks to leverage their profit. As long as they can make more than the interest they have to pay, they should not be afraid to borrow. Also they must remember that 90% of the graduates failed in their first attempt in doing business if they did not partner someone with experience.
    Similar to doing business, in share investing, unless you have a minimum of one year experience, you must not borrowing money to buy shares.

    In Malaysia all the banks have a branch to promote share investment. They are currently offering margin finance at about 5% per year interest rate. You can borrow up to a maximum of 50% of the total collateral value of your holdings. For example, if you have say Rm 100,000, you can buy up to a maximum of Rm 200,000 worth of shares.

    As you know, all share prices often fluctuate up or down. To avoid margin call you should not buy up to its maximum permitted limit.

    If your selected shares continue to go up in price, you can borrow more money to buy some more shares because your collateral value has increased.

    However, for some unforeseen reasons, your shares might drop more than you expected and you would have a margin call. You are given 3 day to top up with cash or shares. Do not top up with cash. If you do, you are retaining some not so good shares. The best thing to do is to sell some of the not so good shares to meet the margin call.

    I know some investors prefer to sell the good shares and retain the bad ones. They do not like to recognize their mistakes and take the losses. They prefer to sell the good one.

    In any case, you will not lose money even if you have to sell some shares to meet margin call because your average cost of your holdings should be lower than the price you are forced to sell. For example, if you have been following my advice in buying Latitude which had gone up from Rm1.00 to above Rm 8.00 within 24 months, your average cost would be about Rm 4.00. When the price drops suddenly for some unforeseen reasons and if you are required to sell, the price should be higher than your actual cost.

    ReplyDelete
    Replies
    1. SMK22 June 2016 at 17:41:00 GMT+8

      good comment. i remember trying to warn a finance blogger who was using his margin account to buy high dividend stocks.

      http://www.sreitinvestmentblog.sg/2015/05/decision-to-take-more-risks.html

      Delete
  7. SMK22 June 2016 at 17:41:00 GMT+8

    what was the previous highest yield?

    ReplyDelete
  8. Rolf Suey23 June 2016 at 01:32:00 GMT+8

    I use to think real estate investment is very good n get u "rich". it is NOT true.

    I will write in my next article fallacy of getting rich from real estate!

    There r exceptions though that real estate investment is good as follows:

    HDB! imagine u r renting out HDB the rental yield is high! I had been getting 7-8% for many years now already! Manageable headache from tenants, but this also depends on how smart u choosing tenants. Yes, crisis is coming yield of my HDB will drop but I already did a worst case scenario, it will still be 4-5% minimum excl. my minor refurbishment fees!

    So this is called good debt! And of course the intangible values of a real estate if u n ur family is enjoying the house, the environment, the parks nearby, n so happy in the house, this is also can be called good investment "not always money!"

    Another factor is only good when u understand cycles buy n flip during 2009-2013 period, but flip must be fast n this is one of the life time bcos of fed lowering to zero percent. Or u r an idiot but still flip at the right time also can be rich.
    This is called leverage at the right time.

    Other than that, it's just a matter of if u r more apt in real estate or investment in stocks!

    Many people do not understand real estate. They always use Sg as a benchmark or HDB in 1980s compare to now in $ value. The only reason why real estate increase is only because of inflation and because since 1971 currency printing crazy.

    u need to see the price of real estate in terms of gold value, then u can see there is actually no appreciation in terms of gold $.

    Also u need to see ratio, price of real estate to household income. The ratio of private housing vs median household income is too large... it is unhealthy in Sg. A burst is inevitable!!!

    Long story cut short, I will have an article "the fallacy of how to be rich - from real estate investment upcoming!" hehe

    ReplyDelete

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