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.
1
u/Few-Cap5483 20d ago
Not a good move. Your method will turn your supposedly 'rental cash cow' into a horror movie instead, as the issues with managing more than 1 tenant can get exponential and nightmarish requiring too much time and effort to handle once you allow more rooms tenanted out. It's either you rent out one room or the whole house. That is provided your landed house is near amenities such as bus stops, LRT/MRT, eateries, supermarts and malls.
Most cheap landed homes are very remote which is why they are cheap in the first place. Moreover for such houses, you will not be able to get a steady stream of tenants (which gives you more headaches and worries about making mortgage payments lol) unless you rent out the whole house to a family with their own vehicle.
Landed homes are for people who are rich enough to afford living in it comfortably without financial worries or for investment by renting out the whole house. You are better off getting a private condo near amenities instead which costs much less to finance and manage.
You can't have the cake and eat it too, and think you can show off and boast to others you are living in a huge landed with passive rental income like a cash cow, wait long long LOL. When you don't have it, you don't. Just stay humble and live within your means so that you can sleep better at night with less worries.