How Can You Buy a Second Property?
In the not-so-desirable property market outlook today, smart investors see it as a golden opportunity to purchase a second property in Singapore due to the falling prices.
There are a few ways where an avid investor can purchase a second property.
Gearing up (Refinancing)
Gearing up refers to the taking on of an equity term loan that is, in turn, used to invest in another piece of property. Such a method is applicable to owners of private property who intend to keep their current home and do not possess the extra funds needed to purchase another piece of property.
The money cashed out from the bank as the equity term loan can in turn be used to purchase a second property. Again, do take note that this can only be made possible if you possess a private property.
Using your CPF
Contrary to popular belief, most people think that they cannot use their CPF. As long as you meet the minimum requirements set for the minimum sum needed in your CPF account, you can in fact use it to finance your second property.
Leveraging on your existing property
This refers to selling off your current property and make use of the proceeds from the sale to upgrade to a private property. Rather than purchasing a jointly owned property, it is recommended that each spouse purchases one property, one for own use and the other for investment.
The property used for investment can be rented out for positive income flow every month that can significantly reduce any cash top ups required.
Of course, before taking any of the steps above, it is important that you assess your current financial abilities first to avoid busting your wallet and making the wrong decisions.
Don’t hesitate if you wish to contact me so that we can go through your current situation and I can provide you with advice that will best suit you.
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