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High-Flyer Young Couple

Couple aiming to achieve their target net worth upon ​retirement and secure their desired semi-detached house before reaching 45 ​years old and to fully pay down their landed property before 65 years old.

Client Profile: High-Flyer Young Couple

Estimated Net Worth: $6.5M semi-detached house (excluding capital ​growth and inflation).

Profession: Medical Doctor (Husband) and Healthcare Business (Wife)
Age: Mid-thirties as of 2024
Family: Couple with one toddler and one new born as of 2024
Net Worth: Renting a 1-bedroom condo, no property ownership

Target Net Worth (Real Estate) upon Retirement:
Fully paid semi-detached house in the East Coast area

Immediate Needs:

  • 3-bedroom condo in the East Coast area
  • Preferably a 2-story penthouse within the Telok Kurau enclave
  • Open to either freehold or newer leasehold

Budget:
$2M, with sufficient cash and CPF monies for a 25% down payment and ​buyer stamp duty estimated at $600k.

Concerns & Challenges:

  • Preference for renovated units but couldn’t find something they both like
  • Worry about excessive void spaces in penthouses, despite lower $PSF

Solution Implemented (After Audit):

  • Purchased a brand new freehold 3-bedroom condo with a private lift in their ​desired location for under $2M with modern design (2018)
  • Continue renting and move in after TOP

Advantages:
As the new condo is on progressive payment basis, the monthly interest ​payable is much lesser compared with a resale property where the full brunt ​and effect of interest payable is felt. This is a hedging method i.e. the interest ​saved in monthly mortgage instalment can be used to offset part of the rent ​they are paying.

Shortfall from Target Net Worth:

  • Target Property Cost: $6.5M for a decent semi-detached house in the East Coast ​area
  • Required Down Payment and Stamp Duty: $1.8M in cash and CPF monies
  • Shortfall: $1.8M – $600k = $1.2M


Future Solutions:

  • Sell the 3-bedroom condo in 5 years’ time to purchase an intermediate terrace ​under the husband’s name
  • Wife will invest in a highly rentable new launch property in a good location to ​achieve better capital growth
  • Forced savings over 5-8 years through rental income and CPF/cash savings
  • Sell both properties to purchase their semi-detached home

By following this strategy, the couple aims to achieve their target net worth upon ​retirement and secure their desired semi-detached house before reaching 45 ​years old and to fully pay down their landed property before 65 years old.

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