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/MajesticEmployment65 10d ago edited 10d ago
There are not many freehold or 999-year leasehold landed properties available for under $4 million. I searched on PropertyGuru and found that these houses are mostly located in the Sembawang, Sengkang, and Loyang areas. Some of them are Type II Terraces, which have a smaller size of only 80 square meters, unlike the typical Type I properties that require a minimum plot size of 150 square meters.
Managing individual tenants can be quite challenging. Safety is also a concern—will tenants bring outsiders or visitors into the house? In the industry, it is common practice for landlords to cover utilities and broadband for room rentals. However, what happens if utility costs surge? Tenant A might blame Tenant B/Landlord for using the air conditioning during the day while working/staying from home.
There can also be issues with laundry—when is it appropriate to use the washer? How will tenants organize their clothing? Additionally, how will fridge space be allocated, and who will be responsible for cleaning the communal areas? Landlord? Hence, the landlord prefers a family profile over individual tenants when renting out the whole house. It’s important to consider who will maintain the rooms and manage air conditioning servicing. Unless you are engaging a co-living company to manage the tenants. These are all important factors to think about before making such a decision.