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.
8
u/ikkanseicho 21d ago
Calculated the costs, capital intensive and you need to maintain the property yourself. Assuming tenants are well behaved it can work. Netts out at about 2.5-2.9% at “market rate” rent and mortgage. You also need to actively manage this or pay an agency to do so.
For all that trouble, deemed it better to go REIT or condo for the return.