By Property Soul

30 June 2018 is a special date to me. It marks the 20th year of my relocation to Singapore.

On 30 June 1998, I boarded a flight departing for Singapore, with a luggage of personal belongings and banknotes equivalent to six hundred Singapore dollars.

When you are in your 20s, you don’t think too much because you have nothing much to lose.

In the midst of the Asian Financial Crisis, as a foreigner. I was lucky to find a job paying S$4,000 a month. Not a lot but enough to pay my rent, living expenses and student loan instalments, and some money to send back home.

It was completely dark outside when the flight touched down at Changi Airport.

I had visited Singapore a few times for business. I had been to a few places, namely Orchard, City Hall, Raffles Place, Bishan, East Coast Park, Sentosa and Night Safari.

The headhunter’s friend had a vacant room in an HDB flat in Woodlands. I didn’t know about Woodlands. But I could stay there tonight and the next few months with a reasonable rent.

In case of troubles, I had the number of two ex-colleagues whom I could call. And one good thing about Singapore is: You don’t have to be blood-related to anyone, and you can call any stranger in the street uncle or auntie without being odd.

Property lesson #1: Always have a Plan B.

On my third night in Singapore, I had high fever, a nasty cough and hives all over my body. For the following week, I had never been so sick in my life.

For weeks, the medicine kept me awake at night with racing heart beat. When I got a wink, I would wake up from nightmares in cold sweat, wondering where I was. I didn’t have to go on diet and lost 5 kilos in barely a month.

Every morning I found myself still alive and reported to work. I needed the paycheck at the end of the month. Six hundred dollars couldn’t last me for very long. I didn’t even have the money to buy a one-way ticket home.

The beginning was not smooth. Little did I expect that work and life in the following year was even tougher.

Before I left, my father told me “you can always come back home if you want to”. Because of what he said, throwing in the towel to go home penniless was not an option.

First lesson: Life is unpredictable. Have a backup plan for contingency. Think about an exit strategy before making a move.

Property lesson #2: Don’t buy from new launch. 

I was fortunate to be given permanent resident status when I took up employment in Singapore under approval-in-principle for Hong Kong immigrants in the 1990s.

I had a CPF account but I could only use it to pay for properties or children’s education – the only two ways to use money in the Ordinary Account at that time.

To buy an HDB flat, I had to wait for three years to apply for citizenship. Being a single, I could only buy after 35 which was too long a wait. The only option was to buy a private property.

In 2000, there were two new projects selling like hot cakes in the market: Queens and Tanglin View. The 38-storey Queens would be the highest condo in Singapore and the icon of Queenstown. It was near my workplace and I could imagine myself moving in two years later.

It was tempting to buy 5h3 915 sq ft 2-bedroom unit at S$841,000. But I would be financially stretched after the purchase. I didn’t want to be tied down by a mortgage and work 25 or 30 years for the bank.

I was grateful that I didn’t buy on impulse at the sales gallery. Before long, HDB announced a new 40-storey Queenstown HDB twin towers just opposite the condo. Prices also tumbled during the market downturn. I went for flat viewing and found the actual unit very different from what I once saw at the showflat.

I didn’t forget about Tanglin View. Four years later in 2004, I went back to pick up a fire sale unit at a big discount from their launch price in 2000.

There were at least two other new projects that I wanted to put down a deposit in year 2000. Looking back now, they could hardly pass my purchase criteria.

Second lesson: Unless you are in a market with no buyer, there is hardly any good deal from new launch projects. Buy resale units to guarantee what you see is what you get.

Property lesson #3: Don’t end up “subsidizing” your tenants. 

A year after I came to Singapore, I rented a private apartment with two flatmates. The last tenant was paying S$2,500 a month while we were renting at S$1,800, and S$1,600 or S$1,500 in subsequent contract renewals. The landlord’s rental return had fallen 28 to 40 percent in four years’ time.

The loan instalment was S$2,500, on top of the management fee, property tax and other repair costs. We were basically being “subsidized” by the landlord to stay there. After we moved out, the place was left vacant for a few years.

The landlord bought the place near the market peak at S$850,000 for its en bloc potential. It was finally sold in a collective sale for over a million. I don’t think he made much from the deal.

Third lesson: Rental return can fluctuate a lot in good and bad times. It is not worthwhile to speculate for collective sale, especially when prices are high and rental returns are low.

Property lesson #4: Fortune favours the prepared. 

The years 1998 and 1999 was the best time to find good deals in the non-landed private residential market. Prices had fallen 41.7 percent in 1998 Q4 (PPI 71.2) from the last peak in 1996 Q2 (PPI 122.2).

I didn’t know this when I arrived in Singapore in 1998. Nor did I have the money to buy at that time.

Buyers rushed into the market again in year 2000 during the dot-com boom. The PPI went up to 100.4 in 2000 Q2.

But the burst of the dot-com bubble was followed by US recession and outbreak of SARS. Prices were at their lowest in 2004 Q2 and Q4. PPI plunged to 79.6 which was a 20.7 percent decline from year 2000.

From 2001, for a few years’ time industry stakeholders would mention in newspaper articles that “the market has bottomed out” or “property recovery in sight”. However, it was not until 2005 Q3 that finally prices started to go up again.

When I first came to Singapore, on weekends I would take the MRT train to go to all the stations in the North-South and East-West lines. This was a great way to learn how to pronounce names of stations not in English and to find out what were outside each station.

Being once a foreigner helped me to pick the right rental properties and market them correctly from the point of view of expatriates.

By 2002, my salary was more than doubled. Four years gave me enough time to study the market and save for the downpayment.

On 16 October 2002, I bought a one-bedroom condo unit at Mandarin Gardens – realising my dream of owning my first private property by the age of 30.

Fourth lesson: When it’s time to buy, make sure you have done your homework and have the financial means to buy.

Property lesson #5: You can be a landlord and a tenant too. 

I resisted the temptation to move into my first property and rented it out at S$1,800 a month, using my CPF to pay for the mortgage.

After the outgoing expenses, the cashflow was enough to cover my room’s rent at S$550. I saved up the rest every month and was soon ready to buy my second property the following year in 2003 and the third one the third year.

People thought I was taking too much risk. That I would get burnt soon like many did from buying properties. That things were so bad and no one knows when the market will pick up again.

My new boyfriend (now my husband) couldn’t understand why other girls were at most buying a collection of LV and Gucci bags, this girl had to buy a portfolio of private homes.

Every time after I bought a new property, he would ask me how much I owed the bank, then go back to calculate his net worth again – just in case he had to help me out when I could not service my loans.

I continued buying until 2007 Q1. After the fifth property, I was not yet 35. Though I could forget about buying an HDB flat as a single.

In 2011, my third property was sold with the proceedings to pay off the mortgage of the fifth one which was our home. There was even some cash left after that. We have been loan-free since then.

Fifth lesson: It is not a must to buy your home before you buy an investment property. You cannot be too good doing anything the first time. Experiences in buying rental properties can help you buy a much better home and pay it off earlier.

Some people say I keep telling people not to buy properties in my blog. But they don’t know that I used to buy one property after the other for a number of years. Whenever I said I was actively looking for the next purchase, the room would be in complete silence. Nobody’s interested.

Being a contrarian means you would be in constant solitude. I left my hometown alone 20 years ago. I won’t feel uncomfortable doing anything alone. And I seldom bother about what other people think, except the ones I really care.

Allow me to quote from my book No B.S. Guide to Property Investment again:

“If you are doing what the average person is doing, your result will only be average. If you don’t want to end up a mediocre, you must have the courage to do something different.”

“Experienced investors don’t ask around for opinions and they don’t need reassurance from others. After all, they make money not from following the path of the crowd, but from deviating from the course of the crowd.”

“ To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest ultimate rewards.  – Lauren Templeton and Scott Phillips, Investing the Templeton Way

Mine was a first attempt to buy properties as an amateur in my younger days. There are bound to be mistakes and hardships in every journey. I am not an ambitious person though I have my dreams. And I am grateful for all the lessons and what I have today.

Now it’s your turn to share your property lessons.

This article was first published on propertysoul.com.