Answering your frequently asked questions about investing in property

1. WHAT’S THE DEAL
WITH PROPERTY
INVESTMENT
Answering The Frequently Asked
Questions About Investing In Property

2. The average person in
Singapore, even if they
aren’t savvy investors,
are very attracted to the
idea of owning property.
Many see it as an asset
that grows in value over
the long-term and a
secure, safe, and reliable
investment vehicle.

3. The problem is a lot of
people don’t really
understand how the
property market works,
where to invest and the
best time to invest. So
many rush in without
thinking things through
or working their numbers
correctly.

4. With property being so
expensive in Singapore,
this represents a
significant investment
risk that most people just
don’t get.

5. So to help us out, we
asked Tan Yang Po,
someone who is very
familiar with property
investment having
transacted and
developed millions of
dollars worth in property
locally and around the
world, to answer some of
our burning questions.

6. 1. Why invest in property?
There are many reasons
why property is a good
investment. With the
global economic
uncertainty looming, we
are expected to go into a
period of high inflation.

7. Higher inflation means
the same dollar we
have right now, won’t
be able to buy as much
in future. It’s not that
prices rise over time,
it’s that our dollar is
worth less.
1. Why invest in property?

8. Inflation also means
the cost of materials in
property will also
increase, resulting in
an increase in property
prices. So if you own
property, its value will
increase with inflation.
That’s why it’s a good
hedge against it.
1. Why invest in property?

9. Another reason why
property is a great
investment is leverage.
That means you can use
a less money to make
more.
1. Why invest in property?

10. 2. What investment strategy should I use?
A lot of people only know
how to make money from
property through buying,
selling and renting. If we
only rely on property
cycles to time the market
and buy low and sell
high, we can only buy 3-4
properties in our lifetime.

11. However, if one learns
how to use the right
strategy, we can
potentially buy more
property, even without
selling our property. One
good example is capital
refinancing.
2. What investment strategy should I use?

12. Let’s say your property
price increases from $1
mil to $1.25 mil. At the
current value, you could
increase your loan from
$800k to $1mil,
assuming you take out
an 80% loan.
2. What investment strategy should I use?

13. In essence, you could
go to the bank and ask
to cash out the
difference of $200k
without even selling
the property. This is
known as cash-out
equity.
2. What investment strategy should I use?

14. Please bear in mind
though, every strategy
that has an upside return
will have a certain degree
of downside risk.
2. What investment strategy should I use?

15. To protect yourself and
your investment, you
need to fully understand
this strategy and know
what properties can
suitably use the cash-out
equity strategy before
you jump right in.
2. What investment strategy should I use?
(Continuation On Part 2)

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198611
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