Remember what is an assets? Assets are thing you bought that bring in money. Yes, you can collect rental from the condo but does it bring in money? In this post, I will not be saying how much you will be selling your condo in the future. Why? Because you will never know. DO NOT ASSUME that you can sell HIGHER.
I putting three loan value $600000, $800000, $1000000 and a fixed interest of 3.5%. If you are loaning $600000, you are paying $2694.26. Say maintenance cost is $300, the minimum rental you must collect is $3000. For $800,000, the minimun rental is $3900 and for $1000,000 the minimum rental is $4800. In order for your condo to be qualified as asset, you must charge higher than the minimum rental cost.
There are a lot of thing to consider if you intend to rent you condo.
Firstly, you have to find people who are willing to pay the minimum rental that you set. This may be difficult when economy is no good.
Secondly, people who rent your house may one day move out again. You have to factor in the lost in rental for certain month.
Lastly people who rent your house may accidentally damage some parts of your house. You must factor in the repair cost.
So do you think is a good assets?
4 comments:
sorry so you trying to say we should not buy a Condo?
Hi Pukimon,
Have to do your own calculation. Buy only when you can afford. I am targetting to buy one in five years time.
Regards
Freedom Achiever
You can know if buying condo is a good asset. Get the details from the post here
New Ponggol Condominiums
You need to hedge your investments. Since a year real estate market is very stable.
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