Rising interest rate.....property owner headache????

lifeafter41 · Sep 19, 2015

A friend of mine kpkb on the recent interest rate rise. Told me his bank, not local, increase his rate to almost 2.4%. His is the type that is pegged to sibor. It's his third property though. Told me the loan he took is 1..5kkfor a 1800sqft place. Second property still has about 600k loan. First property fully paid. Both husband and wife are professional. Income estimated at 200k/year. Excluding rental income. Both property are rented out.

Previously rate was 1% or less, now has risen to 2.4. That's almost like borrowing 3kk at 1%.
Anyway, not sure if his finance is very stretch, but he seems very stressed. Could be the recent stock market downturn has also impacted on his finance. Double blow and he is hoping the market turn around soon.

I hope he is not trading on margin though.
Maybe can suggest to him to offload one property, not need so stress.....

virus · Sep 19, 2015

no need to guess who he voted for...... tell him dont complain, he deserve the high interest rates he voted for.

po2wq · Sep 19, 2015

1 word - greed ...

MovieStar · Sep 19, 2015

u always have many stories to share.

ok, he deserves it.

bakkuttay · Sep 19, 2015

Who did they vote for??

laksaboy · Sep 19, 2015

There's nothing wrong with owning property... it's only those who borrow heavily to SPECULATE on property who will get burnt. :cool:

yahoo55 · Sep 19, 2015

lifeafter41 said:
A friend of mine kpkb on the recent interest rate rise. Told me his bank, not local, increase his rate to almost 2.4%. His is the type that is pegged to sibor. It's his third property though. Told me the loan he took is 1..5kkfor a 1800sqft place. Second property still has about 600k loan. First property fully paid. Both husband and wife are professional. Income estimated at 200k/year. Excluding rental income. Both property are rented out.

Previously rate was 1% or less, now has risen to 2.4. That's almost like borrowing 3kk at 1%.
Anyway, not sure if his finance is very stretch, but he seems very stressed. Could be the recent stock market downturn has also impacted on his finance. Double blow and he is hoping the market turn around soon.

I hope he is not trading on margin though.
Maybe can suggest to him to offload one property, not need so stress.....

[video=youtube;ShGdgykCDiI]https://www.youtube.com/watch?v=ShGdgykCDiI&feature=player_detailpage[/video]

Wunderfool · Sep 19, 2015

lifeafter41 said:
A friend of mine kpkb on the recent interest rate rise. Told me his bank, not local, increase his rate to almost 2.4%. His is the type that is pegged to sibor. It's his third property though. Told me the loan he took is 1..5kkfor a 1800sqft place. Second property still has about 600k loan. First property fully paid. Both husband and wife are professional. Income estimated at 200k/year. Excluding rental income. Both property are rented out.

Previously rate was 1% or less, now has risen to 2.4. That's almost like borrowing 3kk at 1%.
Anyway, not sure if his finance is very stretch, but he seems very stressed. Could be the recent stock market downturn has also impacted on his finance. Double blow and he is hoping the market turn around soon.

I hope he is not trading on margin though.
Maybe can suggest to him to offload one property, not need so stress.....

If he could offload one property, he should be able to manage his finances better. The problem is whether he could get a better price for his property during this time.

lifeafter41 · Sep 20, 2015

Wunderfool said:
If he could offload one property, he should be able to manage his finances better. The problem is whether he could get a better price for his property during this time.

Yes, he told me his installment has increase by 1k. From 6.8k to 7.8k. Rental income barely covers the loan initially, now with the increase he has to come out of pocket.

Suggest about off loading, but told me his condo is those at the outskirts area. Borrow max loan, with minimum dp. And if sell now, most likely at loss as market not really moving. He told me, sell also kena burn, don't sell, worry about more rate increase. If increase rate increase to 3 %, another 1k increase.

lifeafter41 · Sep 20, 2015

MovieStar said:
u always have many stories to share.

ok, he deserves it.

Yes, interestingly they are looking for a listening ear.
Maybe because they find that I am not as well off as them, so they are ok. Many of them already stayed in condos, with another 1 or 2 private properties earning rental income. Happily married with yearly holiday at least once a year or even two.

It's good to know that they are doing well and glad for them too

eatshitndie · Sep 20, 2015

lifeafter41 said:
Yes, interestingly they are looking for a listening ear.
Maybe because they find that I am not as well off as them, so they are ok. Many of them already stayed in condos, with another 1 or 2 private properties earning rental income. Happily married with yearly holiday at least once a year or even two.

It's good to know that they are doing well and glad for them too

and they will still kpkb over pennies lost despite living the good life in paradise. sinkies' copyrighted trademark.

dancingshoes · Sep 20, 2015

seems that there are many rich sinkies around, able to own 3 properties with one fully paid is not trivial task.

erection2015 · Sep 20, 2015

be careful....don't envy these guys too much. Some of them don't own the properties...instead the properties own them. They have to work and worry like shit to pay their mortgages and now they may find tenants hard to come by.

dancingshoes said:
seems that there are many rich sinkies around, able to own 3 properties with one fully paid is not trivial task.

dancingshoes · Sep 20, 2015

erection2015 said:
be careful....don't envy these guys too much. Some of them don't own the properties...instead the properties own them. They have to work and worry like shit to pay their mortgages and now they may find tenants hard to come by.

i like your wisdom on owning properties, over-commiting and end up paying more for mortgage loan.

lifeafter41 · Sep 20, 2015

dancingshoes said:
seems that there are many rich sinkies around, able to own 3 properties with one fully paid is not trivial task.

Yes, unless one receive an inheritance of property or is a successful business man, to be able to own a condo is quite a task in singapore, after all, 75% of the population stays in hdb.
To own 2 is definitely not easy, but 3, frankly sometimes I am also quite amaze at this friend of mine to be able to do it.

Always wondering where he gets his monies from? :biggrin:

Cerebral · Sep 20, 2015

lifeafter41 said:
Yes, he told me his installment has increase by 1k. From 6.8k to 7.8k. Rental income barely covers the loan initially, now with the increase he has to come out of pocket.

Suggest about off loading, but told me his condo is those at the outskirts area. Borrow max loan, with minimum dp. And if sell now, most likely at loss as market not really moving. He told me, sell also kena burn, don't sell, worry about more rate increase. If increase rate increase to 3 %, another 1k increase.

Strange that 2 professionals are not aware of the possible interest rate hike. The writing has been on the wall for so long and they still decide to over extend themselves....tsk tsk

Cerebral · Sep 20, 2015

lifeafter41 said:
Yes, unless one receive an inheritance of property or is a successful business man, to be able to own a condo is quite a task in singapore, after all, 75% of the population stays in hdb.
To own 2 is definitely not easy, but 3, frankly sometimes I am also quite amaze at this friend of mine to be able to do it.

Always wondering where he gets his monies from?

They are thrifty and just pay minimum downpayment. First property bought when they just got married. 2nd and 3rd downpayment probably around 200k for new one or 100k for resale. Considering they earn 17k a month, it is not difficult

rotiprata · Sep 20, 2015

....Rising interest rate.....property owner headache????

lifeafter41 said:
A friend of mine kpkb on the recent interest rate rise. Told me his bank, not local, increase his rate to almost 2.4%. His is the type that is pegged to sibor. It's his third property though.....
....

your fren has both vision and greed!!! .... how i wish i am in his shoes.. :biggrin:

po2wq · Sep 20, 2015

Cerebral said:
... Considering they earn 17k a month, it is not difficult

moni is never enuff ... ze mor moni u make, ze mor u spend ...

2 cars, kidz kiasu expenses, eating out, maids ... not 4getting compulsory donations 2 ah loon ...

lifeafter41 · Sep 20, 2015

Cerebral said:
They are thrifty and just pay minimum downpayment. First property bought when they just got married. 2nd and 3rd downpayment probably around 200k for new one or 100k for resale. Considering they earn 17k a month, it is not difficult

Matrimonial home from hdb then upgrade to condo, that was many years ago.
2nd property,he was saying bought for if I recall correctly, 1kk, down payment of 250k. Now loan still has about 600k. Monthly payment coming to 4k. Rental just enough to cover loan and condo maintenance.
3rd property, bought for about 1.9kk, minimum down payment of 380k. Loan at 1.5kk, 20 years, monthly payment now 7.8k. Rental is about 6000. Now have to come out of pocket of almost 2200 for interest increase and condo maintenance. If rate increase some more, property number 2 might also be negative cash flow.
Yes you are correct, they are thrifty that they do not anyhow spend. Though they do own 2 cars. Both being professional
Both in late 40s, with 3 children.

Rising interest rate.....property owner headache????

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