Estimated Net Worth: $3M freehold 3-bedroom apartment (excluding capital growth and inflation).
Profession: Psychologist (husband) and Management level (wife)
Age: Mid Forties as of 2024
Family: Couple with two boys (2024)
Net Worth: Renting an old apartment at Newton from relative with low rent, no property ownership
Target Net Worth (Real Estate) upon Retirement:
Fully paid down 3-bedroom condo along Bt. TImah.
Immediate Needs:
- Invest in private property with capital growth and minimal risk
- Prefer something brand new with about 10 years holding period
- Continue to rent due to proximity to ACS Barker
Budget:
$1.2M (late 2000), with sufficient cash and CPF monies for a 25% down payment and buyer stamp duty estimated at $360k.
Concerns & Challenges:
- Prefer something brand new to avoid incurring renovation cost due to tight budget
- Open to leasehold because they don’t intend to hold more than 15 years
- Wanted something near parent’s house in Bishan
Solution Implemented (By Themselves):
- Purchased a brand new 3-bedroom condo in Bishan area for under $1.1M (2009)
- Selected best stack facing Bishan Park
- Rent out upon TOP
Shortfall from Target Net Worth:
- Target Property Cost: minimally $3.5M for a freehold 3-bedroom condo along Bt. Timah
- Required Down Payment and Stamp Duty: $1.05M in cash and CPF monies
- Shortfall: $1.05M – $360k = $690k
Future Solutions (After Audit):
- Sell the 3-bedroom condo in 10-12 years’ time to purchase a 3-bedroom condo along Bt. Timah
- Forced savings over 10-12 years through rental income and CPF/cash savings
By following this strategy, the couple aims to achieve their target net worth upon retirement. They plan to secure a 3-bedroom condo between the ages of 45 and 48, with the goal of fully paying off the property before they turn 65.
In 2022, they sold their condo for over $2 million after a holding period of approximately 13 years. This sale resulted in a profit of more than $1.7 million from capital appreciation and rental income, after deducting the outstanding loan.
Subsequently on the same year (2022), they purchased a 1,500 sqft, 3-bedroom freehold apartment near ACS Barker for $3 million. They took out a loan of less than $500,000 and aim to fully repay it before they turn 55. They will achieve their objective sooner than expected and have since moved in at 2023.
