Liquidate or not???

[tangoandrew]

...seeking your views as at the crossroad of a decision...whether t o sell off my hdb unit or not?

bkgrd info:
...54 y.o...3 local univ(2013) kids + 1 poly/jc (next yr)...
...stay pte apt...250k 15 yr-loan...using cpf for mthly repayment...aim to retire at 62 as the 3 kids would be abt 3/4 years in their job already...
...5-R hdb, rental 2.5k...
...zero stocks/shares...have been lurking in forum(s) but no spare cash to invest in shares...

1) thinking of selling the hdb @ 680k/700k...but once sold, no more chance of hdb, unless eventually sell pte apt...
2) then investing 280k/300k in dividend stocks @ 6% to get 1.4k/1.5k p.m...
3) not clearing 250k loan as low interest, also apt has mortgage insurance cover...
4) remainder 400k....not sure how best to use it??? what would you do?

instead of selling the hdb is to keep it & use it for rental income...
...i feel that housing has gone up too much & very little upside left...if i continue to keep the hdb, i am heavy in property & no asset diversification at all...this is the reason why i am keen to sell off the hdb...and to allocate some funds into stocks...

like to hear your views....

[pianist]

actually the govt should put a stop to arrangement like your - staying in private and milking rental from public housing thus depriving many others of affordable housing.

[Bibi]

Liquidate all your assets, move to Malaysia and live like a king.

[thefarside]

Hi, an obvious solution to me is for you to move back to your HDB and rent out your condominium?

Your effective "cost of occupancy" is actually quite high. One of the proven wealth generating method of your generation is to upgrade the property and ride the growth up (which is what happened in your case) but at the end you will have to get off the train (i.e. sell the private property) and return to public housing via the resale route unless you have significant cash reserves outside of the wealth that you have built in your property holdings.

You have done quite well to have both a pte property and a paid-up flat but as you can see its quite resource intensive and leaves you with little cash outside the pot. Presumably the condo can fetch a higher rental and given that the loan is only 250k, is likely to generate enough carry to match the net HDB rental income now (plus anger-ridden forum people won't call you a dracula).

Another option is if you really think that your asset base has too much property you should reduce selling the condominium, and moving back into smaller public housing (downgrade the HDB size), not the other way round. You will free up much more capital that you can use for whatever other cashflow generating asset. For your age capital preservation is key and I think the other route (i.e. stay HDB and rent out private) is better as cash here could be quite easily "lost" in bad investments, or bad markets when you have to liquidate against the trend to meet unforeseen needs.

Obviously there is a chance that the Singapore dollar will go to hell sometime down the road but if that happens it won't help you even if you have the current house?

Another thing is I hope you have some additional cash outside of your house to meet sudden medical needs. Things like this can end up forcing you to liquidate your property when you don't want or cause significant "tax" on your children. Btw congrats on having 4 children - they are a great blessing and I want it too but after two I am just so tired!

[sgd]

if it was me I will sell hdb & pte everything be in 100% cash then find a place to rent now there's many places to rent.

if you want play safe sell the pte apt but keep your hdb, if you have no experience in stocks don't risk put money into bank earn varnilla 0% interest and live happily ever after.

[tangoandrew]

hi thefarside,

tks for your helpful reply....

...reason in keeping pte apt is..
..it is the old big apt 1700 sf...enuf space/room for 5 in the family...even though "cost of occupancy" is higher....additional plus is, it some en-bloc potential...also believes in keeping the bigger property for as long as possible...

...liquidating the hdb...though it frees up less cash...is more comfortable to me...as cash at hand can easily be gone in a short time...part of the 400k can be for standby/emergencies, etc...

...my planning is to be self-sufficient after retirement and then the kids have to strike out of their own...not much left for each one even with the pte apt....

...4 kids is heavy...sacrifice overseas holidays....but to each his own...there is no right or wrong in such decisions...

---

sorry if my post offends any of you....which i was wary of, when deciding whether to post or not...

...but because i genuinely need to seek diff pov/advice, that's why i have decided to post it anyway..
...if you can see 4 kids...what i have is nothing much....but as any responsible parent, i am just doing my utmost to optimize my funds and then to help my kids in some ways....

[KopiKat]

...seeking your views as at the crossroad of a decision...whether t o sell off my hdb unit or not?

bkgrd info:
...54 y.o...3 local univ(2013) kids + 1 poly/jc (next yr)...
...stay pte apt...250k 15 yr-loan...using cpf for mthly repayment...aim to retire at 62 as the 3 kids would be abt 3/4 years in their job already...
...5-R hdb, rental 2.5k...
...zero stocks/shares...have been lurking in forum(s) but no spare cash to invest in shares...

1) thinking of selling the hdb @ 680k/700k...but once sold, no more chance of hdb, unless eventually sell pte apt...
2) then investing 280k/300k in dividend stocks @ 6% to get 1.4k/1.5k p.m...
3) not clearing 250k loan as low interest, also apt has mortgage insurance cover...
4) remainder 400k....not sure how best to use it??? what would you do?

instead of selling the hdb is to keep it & use it for rental income...
...i feel that housing has gone up too much & very little upside left...if i continue to keep the hdb, i am heavy in property & no asset diversification at all...this is the reason why i am keen to sell off the hdb...and to allocate some funds into stocks...

like to hear your views....

From the points highlighted in red, it'd appear that you may not be very experienced in stocks investing? If so, it may not be very wise to start with such amounts.

Why not continue to stick to your point highlighted in blue ie. collect rentals from HDB flat and use that to start on stocks investing? Each year, you'll have ~$30k from rental and if you add a bit more from your savings / bonus from your working income, that should add up a tidy sum to start off with stocks. Multiply that over 5 to 8 years towards your retirement target age, you should be able to build up a sizeable nest egg, assuming you'd done ok in investing. Work out on a spread sheet and simulate / project...

Good Luck!

[cfa]

hi thefarside,

tks for your helpful reply....

...reason in keeping pte apt is..
..it is the old big apt 1700 sf...enuf space/room for 5 in the family...even though "cost of occupancy" is higher....additional plus is, it some en-bloc potential...also believes in keeping the bigger property for as long as possible...

...liquidating the hdb...though it frees up less cash...is more comfortable to me...as cash at hand can easily be gone in a short time...part of the 400k can be for standby/emergencies, etc...

...my planning is to be self-sufficient after retirement and then the kids have to strike out of their own...not much left for each one even with the pte apt....

...4 kids is heavy...sacrifice overseas holidays....but to each his own...there is no right or wrong in such decisions...

---

sorry if my post offends any of you....which i was wary of, when deciding whether to post or not...

...but because i genuinely need to seek diff pov/advice, that's why i have decided to post it anyway..
...if you can see 4 kids...what i have is nothing much....but as any responsible parent, i am just doing my utmost to optimize my funds and then to help my kids in some ways....

You have one priceless asset , Your family ! Cheers.

[thefarside]

I can understand your reason for wanting to keep the larger house for the space. Whatever decision you end up taking will have to consider your full financial circumstances not just what you write here. If you continue working it should be ok and you can make a decision by 62 I suppose. Less important to sell now. Also if the HDB market is 20% lower when you sell - so what. The absolute difference is not massive, at least not compared to your private property.

(as an aside, if your development is very large, the odds of an enbloc over the next few years is very low as developers have to buy, re-develop and sell within five years, with huge exposure to a market still open to further to policy actions plus its very hard to get consensus across a large number of households, whatever the market prices may imply)

[Temperament]

At the end of your days on Earth frail, feeble and useless - your wealth, intelligence or anything you have is no meaning anymore to you. Only your relationship with your next of kins (minders) counts. Don't believe? Go and google Stanley Ho on wheelchair then you may understand what i say.