Doing Your Homework
2017-10-03

Congratulations! You’re about to enter one of life’s greatest adventures: Marriage. Mr Jimmy Beh, Director of First Home Advisors, shares on what happens next.

Decisions, decisions, decisions

As you and your spouse-to-be embark on this new chapter of your life, one of the most exciting things that the both of you will do together is this wonderful thing called decisionmaking. Big things, little things, everything.

Sometimes, the both of you will agree; Many times, the both of you will disagree, and other times, the both of you will have to find a middle ground, agreeing to disagree.

Buying a home, in Singapore especially, will be one of the first big decisions the both of you will have to make as a couple as the both of you progress in the marriage preparation and planning process.

Your first home is one of the biggest purchases you will ever make, easily involving hundreds of thousands of dollars. For those who can afford it, this amount may even stretch into the millions.

It would be safe to say that you will need all the information you can get your hands on to help you make an informed decision before committing to any property.

Getting more bang for your buck

Property prices in Singapore have outperformed many other investment options, as you can see from the chart below. Out of 10 investment choices listed, the 3 options that provided the highest returns are property investments.

Your property prices will most likely appreciate over a 10-year period, however, not all property types will appreciate more than 100% and certainly not all property types will make money when you sell them.

Figure 1.1 shows you a collection of properties, and how much they have increased in value over a period of 10 years. The best performing investment is the Executive Condominium property type, yielding a staggering 435% Return of Equity.

You might be asking, “Does that mean that all Executive Condominiums will make money?”

From my experience, most will, although it depends on the project and the unit you buy.

What’s the big deal?

What I am trying to get across through all these facts and figures is this: Buying your first home is more than just getting a place to relax and chill in, it is an investment in your future and quite possibly the future of your children.

Here are some questions that I help couples answer as they go about buying their first home:

• Which type of property best suits your current needs?
• How do you prevent overstretching your budget when buying your first home?
• How much of a loan should you or can you get for your first home loan?
• Based on your current combined income, what type of property can you consider?
• Should you go straight to BTO, Resale HDB, Executive Condo or Private?
• Which are the growth areas in Singapore that will give you the best in appreciation of your property value?
• How can you leverage on the low interest rate for your home purchase?
• How can your property help you unlock cash flow when you need it?

Lastly, congratulations on taking this bold step of commitment to each other and deciding to be married for better or for worse, in sickness and in health, through the good times and the bad. I wish you both a blissful marriage, with many wonderful days and memories to keep.

Mr Jimmy Beh is the director of First Home Advisors, a company that provides free advice to couples looking to buy their first home. For free advice & consultation, call Jimmy at 91869222 or email him at [email protected].