Investing in Investment Property

Like most people interested in investing in residential properties, my wife and I did this back in 1997 (before the Asian Financial Crisis). On 19 July 1997, we exercised an option to purchase a unit in Trellis Towers directly from the developer, City Developments Limited.

This is a freehold property. Details:

Purchase price $1,121,580 (after developer discount 7%) Area of units 1,163 square feet Cost per sq ft = $964

At that time, the rule on purchasing a private property was:

The loan was taken from Credit POSB (before the merger of POSBank and DBS Bank on 16 November 1998). From then on the loan was transferred to DBS Bank.

Interest rate on loan ranged from 4.75% to 3.5% p.a. on daily rest basis.

We redeemed the mortgage (loan) on 15 June 2004, some seven years later.

Our starting point was that we had dual income. We would redeem part of the mortgage whenever we had bonuses from employment or had build up substantial sum in our CPF Ordinary Accounts. The rental income of this unit was used to repay the mortgage too.

From 1997 to 2000, the property was under development. We took over the property on 24 February 2000. It was rented from 22 August 2000 till March 2009.

Items

20% deposit in cash 2.5% on purchase price for stamp duty

Lump sum from CPF Rest of purchase price in bank loan Total Property Stamp Duty $224,316

$326,264 $28,250

$571,000

$1,121,580 $28,250