Five Things You Need To Know When Buying A Home
Probably the most expensive purchase one can experience in a lifetime. Buying a home requires commitment and brings about a new phase in life. Today let’s take a look at the Top 5 Factors Homebuyers should look out for.
1. Affordability
Cash flow is important. Understanding your total income and affordability can be simply done with the Total Debt Servicing Ratio (TDSR) or the Mortgage Servicing Ratio (MSR). This will determine the loan amount that you will be eligible for.
2. Space
Whether you are single or married with children, planning for the future is important. Instead of looking at your current needs, plan how you might benefit by having an extra bedroom or an extra bathroom.
3. Expenses
Beyond the price tag of a home, you should consider the variable cost involved when buying and maintaining your home. Stamp duty, a requirement for every property purchase, conveyancing lawyer fees, insurance and renovation fees are some of the expenses you will have to bear before getting settled into your new home. Other costs involved will include movers and furnishing. Last but not least, whether you are looking at an executive condominium or a private property there will be maintenance fees involved such as conservancy charges to upkeep the estate.
4. Location
The old saying goes, nothing beats a good location. Living in a convenient place will definitely improve your lifestyle. Researchers have found out that if you live within a 30-minute travel time from your workplace, you will have a better work-life balance. Some might even correlate a good location with better capital gains. However, this is not necessarily true.
5. Capital Gains
Real estate in Singapore has been known for its steady growth in capital gain. Higher capital appreciation has been correlated to proximity to MRT stations, schools and other amenities. However, this may not always be the case as some case studies have proven otherwise.
Comparing two condominiums, Condo A with immediate proximity to an MRT station, and Condo B with an additional 10 minute walking distance to the MRT station. You might expect that Condo A, with immediate proximity to the MRT to have greater capital appreciation than the latter. However, as Condo B was offered to buyers at a lower entry price, Condo B owners enjoyed greater capital gains than Condo A. What does this tell us?
This does not mean that you should not establish some foresight when investing in a development with growing potential. As much as we love to speculate, it is probably in your best interest to seek opinions from experts in the region.
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