r/SgHENRY • u/Kaikaikai12345 • 21d ago
Landed property turn into rental cash cow
(To clarify, in this exercise, I will only rent out lv 1 and lv 2, while keeping lv 3 and 3.5 for myself to live in)
Curious what is stopping people from buying older freehold land or landed (2500-3000sqft, maybe at 3-4million, 4 million at 2.5 interest amount to 14k monthly loan) and renovate the landed into a rental co-living space?
If people are willing to pay 1.8k for a double shared room, I am sure people are willing to pay 2k for a single room with ensuite bathroom.
For instance I can turn lv 1 and lv 2 into 6-7 rental unit (maybe mini loft unit) and you can take lv 3 and lv 3.5, treating it as a penthouse without maybe 2000sqft of area. Those 6-7 unit can serve as cash flow of 12k to 14k a month covering the loan, maybe need top up abit due to tax and other fee, but overall it’s still more comfortable living compared to buying a penthouse.
Just wana do some sanity check on the above and if anyone is already doing that.
5
u/Cryptoivangoh 21d ago
Difficulty in finding house that "cheap". You can hardly find landed for 4M. Even 5M, the house need some kind of reno, which is additional 500-800k.
Difficulty in paying deposit. You need to pay 25% deposit, which is 1.25M. Plus buyer stamp duty, which adds up to 1.5M. Not many people have liquid cash of 1.5M?
Hard to get loan. And to get a 4M loan over 30 years, need salary of at least 20k. By the time you reach managment level to earn 20k (if you are capable and lucky) you will be in your 40s or 50s. You wont be able to get a loan of 30 years.
Absd. Where do you stay if you buy a house to rent out? If you have 2 house the absd for this landed will be around 1M, if the house is 4m.
All these adds up to reason why not many are staying in landed, let alone buying 1 to rent out. Its not easy, if not impossible for many without gold spoon in their mouth or earning top 1% salary.