As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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Thursday, 13 September 2018

HDB 4 Room Rental Soften???

Uncle8888 recently bumped into his long time no see neighbor who is living a few floors below him. 

After some chatting; he came to know that his neighbour has been living at her mother's place and rented out the entire 4 room flat.

That day; she came back to her unit to settle down her new tenant. 

Uncle8888 asked her about the rental rate. She said that the current rental is $2,000. The previous rental was $2,800. 

Down by 29%!


  1. Is there any difference in holding stocks especially Reits.

    i think it is best U choose what U like best.

    But U have to try both to really know which U like best.

    In most cases, nothing can beat U experience the practical yourself.

    Talk Male Chicken or high brow theory can only mean talk only

  2. Heheh, I would say $2.8K is abnormally good if it was last 2 years ;)

    Just like dividend investing, should always build up cash reserves during good times to handle the inevitable lean times :)

    My mickey mouse condo rental has dropped 25% from the heydays in 2013! At least still covers the expenses + imputed effort (we put it at $50/hr/pax) but headaches are extra! LOL!

    Renting out physical property is more like business ... got advertising, marketing, selling, pacifying customers, dealing with difficult customers, ongoing expenses, taxes...

    Being a mini-bank oops I mean shareholder means trying to manage from 30,000 feet. When the weather is good & the winds are right, just sit back & collect. But during bad times either jump ship or can scold management during AGMs! LOL!

  3. From 2013 peak, it is correct, rental has dropped from 25 to 30 %.

    What about expenses for maintenance of property's utilities, appliances, etc...

    So if invested in Reits, is there any thing difference?

    How much drop in dividend?

    How much drop in capital invested?

    How much drop in Riet's asset value?

    1. The Moral of the story is we need more than one source of "passive" income as rental and dividend can drop drastically without any advance warning.

    2. Dividend and/or rental income marginally exceeds expenses may not be fully FI yet.

  4. Actually, i think it is better off holding the correct Reits than properties.

    Unless U have too much money and just want to have some diversification for safety purpose.

    YOC should be better.

    Besides U will enjoy more rebates and ang pows form Big Brother.

  5. Think this neighbour doesn't to bother her HDB flat is leasing or ownership. Monetise it for next 10 to 30 years. Her pocket full of money liao. Those who cpcb are those can't monetise it. That is the real reason!

  6. That may be the reason but i think the No. reason is all HDBs belong to us or only the Elites?

    Or at least the commons want a little, a litter more.

  7. Net rental income after 10% tax is about $1,800 for my neighbor so it should be enough to live simply on $1,800 in addition to any other sources of retirement income.

    To receive this level of dividend income of $22K per year; she will require capital injection of more than $430K at 5% yield.

    How many of us have an additional capital injection of $430K?

  8. Hee hee Uncle8888

    Got quite a few costs need to set aside :)

    Pty tax, if you're not staying in it, is up to 10X normal pty tax.

    In S'pore, normally the landlord pays the conservancy fees ... so another expense to consider. And no more GST rebates for rented out flat haha!

    Rental income is considered as "earned income" and thus subject to income tax. If no other active income, then still OK unless your rental income is very high. Luckily now can just claim 15% of your gross rental as deductible for expenses.

    For your neighbor case, if she doesn't have any other income, then probably don't need to pay any income tax. (85% of $22K is below $20K)

    But should set aside 10% of rental as buffer for maintenance / repairs / replacements. This one can be the wildcard or joker .... depends on your luck with tenant sometimes.

  9. Exactly!

    If invest in Reits rather then rental properties where got so many Qiu Baey?

    Further more easily net 5 or 6 % ROI per annum.


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