A condo, short for condominium, is a private residence split into various units that share facilities like pools and gyms.
As a Singaporean, making a plan to invest in a condo is a smart move. But learning the tips to guide you is the smarter move that will make your money grow faster. After all, the aim of investing is to attain financial freedom. Like in all fields, a lack of knowledge could turn out to be your primary hurdle and not what exactly to invest in. How do you determine that a particular condo should be worth this or that?
This and many such related questions can only be answered by an expert who has traveled that road not once, not twice, but many times. Like in other investments, you are going to accept some risks before you purchase a condo. The elephant in the room is not the assumptions, but how realistic the assumptions are.
These tips should guide you:
The Annual Rent
Most importantly, you have to calculate what you are going to get back as returns. Is it worth investing in? After the expenditures, what do you get in return? There are expenditures like real estate taxes, insurance, and maintenance. There are other occasional expenses like advertising, legal fees if you have to evict a non-cooperative tenant and repairs if there is damage to the property. After doing all these, what do you get in return? It is no use pouring all your money into a condo that will not attract tenants, or that will attract only the low-rent tenants.
The Condition of the Condo
You should take your time to inspect the property. If it is in bad shape, it means you will have to spend a chunk on maintenance and repair. This will eat into your income.
Is the condo located in an area where rental properties are in demand? For instance, you may have to go for a condo near a college, university or the beach frequented by long-term revelers. That way, you are assured of tenants. The area should also be accessible and with a good reputation. Certain regions of Singapore have over time earned excellent or bad names, depending on the incidents that are reported to happen in them. Its respective locations are what make Belgravia Green and Treasure at Tampines such attractive propositions.
Tenants want to stay in a secure area where they can be or feel safe. A condo with all the essential facilities but in the wrong location may not be a wise investment in the long run. It is a good investment if you get a condo in the right place and with the essential amenities. One such condo is the Juniper Hill Condo.
It is better and easier to bargain for a high rent when the condo is in high demand. If you have figured out that a particular area will have a high demand for rental properties early next year, that’s the time to advertise and now is the time to buy the condo in readiness for that time. Keeping track of economic upturns will also indicate the best timing.
While the security of the area is essential, tenants will want to know how secure the condo itself is. Ultimately, it is the place they will call home. So to attract tenants fast enough, make sure the condo you are to purchase has security guards that operate round the clock, aided by CCTV and video surveillance. The parking areas should be gated, the exterior doors lockable and always locked, the hallways and parking areas always lit, etc.
Once you have invested in a condo, do not bury your head in the sand. Be on the watch out for the latest news. If you hear of a massive retrenchment across the economy or a closure of a factory that employs many of your tenants, you should quickly lower rents. This way, you will at least avert the prospect of having to maintain vacant rooms.