Me & My Money Series (Sunday Times)

From one of the article I read in valuebuddies which was originally sourced from another website:

:A great rule of thumb for buying a house (the biggest single investment most of us will ever make), from fellow Fool Buck Hartzell back in 2005: "If a home is selling for 150 times the monthly rent (or less), it's generally a good deal. If it's selling for more than 200 times the monthly rent of a comparable property, you're better off renting."

(The 100 Things I've Learned in Investing
, http://www.fool.com/investing/general/20...sting.aspx)

His property is exactly 200 times the monthly rent, though i think the monthly payment on his housing loan is low due to our low i/r environment

(19-08-2012, 11:56 AM)CY09 Wrote: From one of the article I read in valuebuddies which was originally sourced from another website:

:A great rule of thumb for buying a house (the biggest single investment most of us will ever make), from fellow Fool Buck Hartzell back in 2005: "If a home is selling for 150 times the monthly rent (or less), it's generally a good deal. If it's selling for more than 200 times the monthly rent of a comparable property, you're better off renting."

(The 100 Things I've Learned in Investing
, http://www.fool.com/investing/general/20...sting.aspx)

His property is exactly 200 times the monthly rent, though i think the monthly payment on his housing loan is low due to our low i/r environment

Think it's a dead link (or some problem on my side?). May I know if the writer was referring to purchasing a property for staying in, or an investment ppty?

(19-08-2012, 11:49 AM)Muck Wrote: Very risky financial behaviour... Dumping all liquidity into a property during the height of a boom. I wouldn't trust one cent to such so called financial planners. Then again, perhaps he doesn't think it risky for after all, knowing his parents would prob bail him out if he gets in trouble. That's the 'advantage' to young kids with rich financial backing - they can take the risks for potential upside, with little personal downside since they'll get bailed out. Moral hazard haha.

Yes everything being equal, it is natural tendency to trust someone who has worked all his way up rather someone born with a silver spoon in his mouth.

(19-08-2012, 12:14 PM)Muck Wrote:

(19-08-2012, 11:56 AM)CY09 Wrote: From one of the article I read in valuebuddies which was originally sourced from another website:

:A great rule of thumb for buying a house (the biggest single investment most of us will ever make), from fellow Fool Buck Hartzell back in 2005: "If a home is selling for 150 times the monthly rent (or less), it's generally a good deal. If it's selling for more than 200 times the monthly rent of a comparable property, you're better off renting."

(The 100 Things I've Learned in Investing
, http://www.fool.com/investing/general/20...sting.aspx)

His property is exactly 200 times the monthly rent, though i think the monthly payment on his housing loan is low due to our low i/r environment

Think it's a dead link (or some problem on my side?). May I know if the writer was referring to purchasing a property for staying in, or an investment ppty?

This is the link, http://www.fool.com/investing/general/20...sting.aspx

I am not sure about if it is for stay or investment, but my feel is that its for both

(19-08-2012, 11:56 AM)CY09 Wrote: :A great rule of thumb for buying a house (the biggest single investment most of us will ever make), from fellow Fool Buck Hartzell back in 2005: "If a home is selling for 150 times the monthly rent (or less), it's generally a good deal. If it's selling for more than 200 times the monthly rent of a comparable property, you're better off renting."

Rather unlikely to get 8% yield I think, much less a higher amount.

Thanks CY09 for the link. Have read the original article - it's a good read. I personally think the author was referring to buying a ppty to stay in, and was directing it in particular to first-time home-buyers.

(19-08-2012, 04:01 PM)Muck Wrote: Thanks CY09 for the link. Have read the original article - it's a good read. I personally think the author was referring to buying a ppty to stay in, and was directing it in particular to first-time home-buyers.

Possibly.

I was thinking for Sg properties we could peg it to 30-35% of avg household income instead of rentals. This is because for many of our HDB flats,there is an income ceiling for the various types of housing flats which means its easier for us to determine if the property price within that specific class is of fair value or not by comparing against the current household income.

For example 3 room flats (non mature), income must not exceed 5k, assuming 35% goes to payment of flat, we could determine the value of a 3 rm flat is worth $262.5k to 350k (150-200 times)

wow so the prevalent 3 room flat price is expensive haha. die this time come age 35 what should we do.

(19-08-2012, 04:31 PM)Drizzt Wrote: wow so the prevalent 3 room flat price is expensive haha. die this time come age 35 what should we do.

For someone like you who does such detailed analysis for your stocks, that shouldn't be a problem... You ought to be able to afford something a lot more expensive...

If all else fails, execute Plan B... ie. go get married, then you have more $$$ (especially more certainty in the CPFs) in the equation...

(19-08-2012, 06:13 PM)KopiKat Wrote:

(19-08-2012, 04:31 PM)Drizzt Wrote: wow so the prevalent 3 room flat price is expensive haha. die this time come age 35 what should we do.

For someone like you who does such detailed analysis for your stocks, that shouldn't be a problem... You ought to be able to afford something a lot more expensive...

If all else fails, execute Plan B... ie. go get married, then you have more $$$ (especially more certainty in the CPFs) in the equation...

-.-"