I Love Singapore Airlines.

TTI loves Singapore Airlines.

I really do. Not the shares. The company.

Tidbit of fact: Since 2010, me and my entire family have NEVER flown on ANY other airline, except SQ.

As the pandemic rages on past the 2nd year, we all know times have been real tough for SQ. Things might have gotten slightly better now, compared to the start of the pandemic, because of the reopening, VTLs etc, but obviously, the company is nowhere near being out of the woods yet.

YTD, SQ’s share price is actually doing pretty ok! That’s a surprise to me, I just checked. I guess cos it was coming off a very low base:

But if we zoom further out to compare against pre-pandemic times:

Ouch.

Not good man.

Almost -30% after 5 years…

I don’t really track SQ’s financials or their share price, but I think they had big write downs due to their oil hedging strategies, then they decided to discard that, and oil prices shot up. So their timing is as sucky as it gets.

I have never invested in Singapore Airlines’ shares, and don’t intend to.

So why am I a fan of SQ?

Cos of this: Eyjafjallajökull

No, that’s not a typo.


ok, STORYTIME:

In 2010, 11 freaking years ago, TTI was a young newbie, and as a young newbie, I resolved to travel the world to meet up with highly successful individuals in my industry, to seek inspiration and learn from what they’ve done. Hopefully, I can then adapt some parts of what they’ve done, and end up making my own journey more exciting.

(reference what I wrote about Li Ka Shing’s teachings in my earlier post: https://thumbtackinvestor.wordpress.com/2021/09/12/happy-mid-autumn-festival-to-the-investingnote-team-ttis-top-5-generals-list-updated/)

In general though, when you are a young newbie, money is always a problem when u try to travel.

I always tell my friends that there’s no perfect time to travel. You just got to make the effort to do it.

When you are young, you have time and energy, but no money.

When you are middle aged, you have money and energy, but no time.

When you are old, you have money and time, but no energy.

That’s the conundrum I face! Tell me this isn’t true for most folks, right?

Unless of course, you marry Kim Lim, then you can travel anytime, anywhere you want.

So 1 way I got around this, was to attend certain “world conferences”. There are a few of these in my industry. Well, they still cost a lot of money to attend, but cos I was a “promising young dr”, many distributors were willing to sponsor me to attend these conferences. The rationale is that I attend these conferences, learn the new tech and know-how, and come back and buy their expensive equipment or materials to apply what I’ve learnt, and they get to profit from knocking me off with crazy expensive prices for decades and decades to come.

Better yet, some would even lock you in and make you commit to conduct certain lectures to share what you’ve learnt, and that’d kinda generate a whole new pool of clients for these distributors. Kinda like a MLM scheme. (OK, not that bad, there’s no actual commitment to buy from them)

But I was a young, poor guy, and beggars can’t be choosey, so I’d accept whatever offers were given to me then. Like I said, when you are young, you have time and energy, but no money. So I figured out a way to solve the money part.

These conferences are great, cos since you gotta pay a hefty fee of thousands of dollars to attend, they literally give you great food in between every presentation/talk/training session. It was in some of these random makan periods, when I made friends with fellow drs from all over the world.

TTI is the yandao, more tanned guy on the right. Faces blocked out, so you’d have to just take my word for it.

Now, since these conferences were attended by literally thousands of folks ALL OVER THE WORLD… it does clog up the airports and all the infrastructure when everybody arrives at the same time. So flight tickets are generally cheaper if you fly in say, a week earlier than the crowd. So I try to negotiate with the folks sponsoring me to get me earlier flights, so that I have more time to do my own travelling before the conference starts. It’d be cheaper for them, and I settle my own extra accommodation costs anyway.

Win-win situation.

In this way, I get to sneak in leisure time and I get to meet certain esteemed individuals as well.

In 2010, I went on a trip to Geneva, Switzerland. It was on this trip that I arranged to meet a certain famous and successful guy within my industry. Obviously I can’t mention names, cos I don’t have permission to, and I don’t even wanna reveal my own identity either.

TTI is the, again, yandao guy on the right with the dark olive coat, whereas said uber rich and successful ang moh guy is the guy in the dark coat.

The Swiss are kinda formal like that.

Anyway, take note of the very beautiful, nice blue skies at the backdrop. More on that later.

So… said dude, let’s just call him RSD (rich successful dude), hosted me and my wife to fancy meals, drove us around sight seeing, shared with us his stories over many wines and even showed us some of the art collections in public museums that he personally donated. (Yeah, my wife came along as she was en route to the US then, but that US trip ended up not materializing… more on this later too)

I even bought 1 of the books that he wrote years ago, and tbh, it was a tad too expensive for me then, and I didn’t really read a single page. (I flipped through it looking at pictures on the flight and deliberately made some dog ears, so that the book wouldn’t look untouched… lol)

But I knew it’d break the ice, and when you write a book years ago, it’d mean a lot if some random young chinese dude from half the globe away, appeared in your life with a copy of it asking you to autograph it, ain’t it? So I bought it, brought it along, and got him to autograph it.

That really did the trick cos RSD was sooooooo excited to see a copy of his book in my hands. Old man was practically hyperventilating. That broke the ice and we were all best buds from then. LOL.

I’m telling u, TTI is a bit street smart like that sometimes.

1 particular anecdote that stuck in my brain all this while, was when he drove us through the old town. Geneva is divided into the “new town” and “old town”. I really loved the old town part. So……. historic.

Anyway, RSD pointed to a series of apartments as we drove slowly through, which was literally just beside the museum to which he donated his art collection to, and told us that he owned this entire series of apartments.

Well, I dunno if I’m doing it justice by describing it as a “series of apartments”, but it’s basically like a long long long row of many many blocks of low rise apartments. I don’t have a pic as we were just driving past without stopping.

I asked him how did he do it, since I knew he wasn’t doing anything property related. He told me that very early on in his career, a fellow university mate approached him to ask for funding for his property venture. Now, he didn’t know that university mate very well, but he knew he was a smart lad, kinda the type of guy who’d succeed in anything he does, u just know it in your bones. So he agreed, and basically threw money at whatever project the dude went into, without really understanding the details. RSD was basically a sleeping partner. This university mate then went on to snowball and compound his investment many many many times over. Each time, RSD was offered the profits from a successful venture, he just declined and opted to reinvest in the said university mate’s next venture.

He said there hasn’t been a single venture that didn’t make a ton of money for him.

His partner was already retired then when I visited in 2010, hence, RSD couldn’t reinvest any further, and just sat on the massive amount of property assets from the venture and collected rent. (Residential rent in Switzerland isn’t very high I think, but man, if you see that row of apartments……)

Anyway, I’m digressing a bit from this very exciting story. What has all this gotta do with Singapore Airlines, you say?

Well… in 2010, an Icelandic volcano known as Eyjafjallajökull, erupted. It was huge news then. The ash cloud from that volcanic eruption eventually travelled down to Europe, and disrupted air travel across Europe. It was absolute chaos.

Here, go read about it: https://en.wikipedia.org/wiki/2010_eruptions_of_Eyjafjallaj%C3%B6kull

No shit, this is what it looked like:

The eruption of Eyjafjallajokull
Volcanic Eruption in Iceland - The Top 10 Everything of 2010 - TIME

So back in 2010, when Mr Eyjafjallajökull decided to blow his top, I was happily attending the said major conference in Geneva, Switzerland. Ah… now you’re starting to connect the dots….

Anyway, as the story goes, Iceland’s famous volcano decided to erupt near to the last day of the 2 week conference. I remember it very clearly, because the last speaker was very ironically, from Iceland, and he was joking about how the volcano erupted so that we are all stranded here and will have no choice but to sit in and continue listening to his presentation. (The last speaker always has the toughest job because people tend to either want to fly home early to avoid the crowd, or if leisure travel plans are made, people wanna leave early and are already on “holiday mood”)

So generally, you need to put a “superstar” speaker at the last slot to capture the attendees’ attention, otherwise the speaker will be speaking to an empty hall.

Well, anyway, the Icelandic speaker was right. Because as luck would have it, literally right at the end of the conference, as we rushed to the airport to catch a flight home, we saw this:

The ash cloud moved down to Europe, and all the flights in Geneva were cancelled!

Have you ever, in your life, seen a departure board that’s FULL of red cancellations?!

The entire airport was shut. And it’s ALL international flights!

I dunno how to describe the situation then, but it was ABSOLUTE CHAOS.

Like really crazy shit. There were long long lines in front of EVERYTHING. Even the freaking toilets. All the TV stations were reporting on this, so u see that on the screens in all TVs in the airport.

Crazy mayhem. You can film a doomsday movie there on the spot.

Mind you, this is a sudden 100% closure. You can’t even fly to another destination from your planned one, and hope to take a connecting flight. Think of the thousands and thousands and thousands of folks suddenly stranded, and what made it absolutely worse, is that NOBODY could tell us when the airports would open!

It could be closed for 1 hour, in which case you could just wait.

It could be closed for 1 day, in which case you could get a 1 night hotel accommodation if you are so prima donna.

It could also be closed for 1 week, in which case you are kinda screwed if you want to wait in the airport.

It could also be closed for 1 month, in which case, I think I will just apply for Swiss citizenship and settle there permanently. Maybe can convince my wife I need to take a Swiss mistress in order to get citizenship.

It was just devastatingly mad then. And since nobody knew when the flights would resume, suddenly, you have thousands, maybe tens of thousands, or maybe even over a hundred thousand passengers, who suddenly need accommodation!

Of course, not everybody would be able to get accommodation on such short notice right? Bulk of the passengers were already staking out their “territory” on seats and just literally any flat, clean and empty area. Let’s not even talk about the sudden massive demand for food and water. In this kinda scenario, you can 100% guarantee tempers would be frayed, there’d be raised voices etc.

As I’ve mentioned above, my wife was supposed to be en route to the US, while I make my way home from Switzerland. With this closure, her flight was obviously cancelled too.

Some random strangers suggested that we could catch a train south, into Italy, and try to “beat” the ash cloud front. Cos at that time, the ash cloud from the eruption had not reached Italy, and Milan’s airport was still open. We opted not to though, cos train ticket prices would’ve suddenly, exponentially increased a few times in price, and it was not even a guarantee that you could fly out.

It was already getting rather late, but since we were young and poor, getting last min accommodation was absolutely out of the question, so we were prepared to rough it out in the airport itself.

IN STEPPED SINGAPORE AIRLINES! (cue super hero background music)

Singapore Airlines hopes to be world's first fully vaccinated airline | CNN  Travel

SQ would have none of it.

The volcanic eruption was none of SQ’s business, but noooo, they wouldn’t leave their passengers in the lurch after cancelling their flights (through no fault of theirs obviously!).

Singapore Airlines decided to pack ALL their passengers from the cancelled flights, into airport buses, and transport all of us into the nearby airport hotels! On top of that, SQ also decided to pay for our dinners in these said fancy hotels! 100% complimentary. We didn’t pay a cent.

SQ basically, through their actions, said “you guys fly with us, we got your backs man.”

well well, lucky TTI and Mrs TTI, cos we got the Crowne Plaza Hotel, which is a very fine hotel indeed.

AFAIK, Singapore Airlines was the ONLY airline that did this. I shit you guys not. It’s true.

Remember the friends I made in the conference above? I called them after we were settled in Crowne Plaza Hotel, and nobody had free accommodation and free dinner (They didn’t fly SQ, so too bad. Remember I got sponsorship? Of course I’d fly the best airline in the world la! Lufthansa sucks the worst btw, won’t go into detail, but they suck so bad, I won’t ever fly with them even if it’s free. No, I’m lying. Actually, I won’t fly with them even if they PAY me to do so)

And for the record, the complimentary dinner paid by SQ, was not some crappy takeaway dinner box that they distribute out like we are refugees. It was ANYWHERE in the hotel that you choose to dine in!

Woo hoo. Mind you, imagine the chaos, imagine a poor young TTI and his equally dirt poor wife, 1 moment panicking about getting stuck, running low on Swiss Francs (obviously you’d try to spend all your foreign currency before you fly back right?!), SUDDENLY getting saved by SQ.

So while the other non-SQ passengers were screaming and shouting and squeezing at the airport…

TTI and wife, being true blue Singaporeans, looked through the restaurants in Crowne Plaza and decided to use our complimentary dinner at the most expensive looking, atas restaurant in the hotel.

Here is Mrs TTI, looking refreshed after washing up, and settling down to have some fancy Swiss dinner, in a fancy Swiss restaurant. You see so many wine glasses, you already know it’s fancy. HAHAHA

Mrs TTI chose the yummy lobster dunno what dish. It comes with atas names of course.

Whereas I got conned, cos my choice of atas sounding dinner, kinda looked like….. errrr…. u guys take a look and tell me:

Anyway, this nonsense ain’t filling my belly (rem it was 11yrs ago and I was a growing boy then), so we took the shuttle out to town for 2nd helpings then.

The day turned out… well, not good, but not too bad either. It was kinda fun tbh.

Quick IQ test: sharp eyed readers, tell me what’s wrong with this picture……..

…………………………………………….

Give up?

Look at the skies; see any “ash clouds”?

That’s the thing, these said “ash clouds” are either imaginary, or maybe so far up that I can’t see them. The skies looked the same as all the other days that I was there! Simi ash cloud, look at the photo and see for yourself.

But the airport was still closed.

For the record, SQ only paid for 1 night of accommodation and dinner, but the airport was closed for much longer. iirc, at least a week.

But hey, no complaints from me, especially seeing the other airlines’ passengers get zilch.

Since then, I’ve only flown SQ. 100% of the time. Don’t tell me about cheaper flights, I don’t care. If it’s not SQ, it doesn’t exist to me. When businesses take care of their clients in times of adversity, it’s not an expense. It’s an investment. That amount spent, didn’t disappear. It gets converted into this obscure item sitting in the balance sheet known as “goodwill”. Sometimes, the goodwill is useless. For me, I’m just loathe to see good practices with no positive outcome for the practitioner.


Now, what happened next? Remember SQ only paid for 1 night, but the airport was closed for way longer. Here’s something funny.

That same night, we went to the front counter to ask for room rates, since that night was the only free night, and if we couldn’t fly the next day, we’d have to start paying.

The guy at the counter told us that for our room, it’d cost 550 Swiss Franc for 1 night! Now, remember, this was 11 yrs ago, so that’s a shit ton of money that I couldn’t afford then. (maybe now also cannot afford. LOL)

I then spied a little standee on the counter that says room rates begin from 250 Swiss Franc per night, and pointed that out to the guy. Since our room is probably the smallest room around (only 2 pax), shouldn’t it be the 250 Swiss Franc too?

The guy at the counter looked at the standee for just a second, then reached out and grabbed it and hid it below the counter and told us “That was off peak season rates. It’s now peak”!!!

LOL! DAMN THESE OPPORTUNISTS!

Volcano erupted. So rates in a hotel miles and miles away in a different country revert to “peak season”.

You just gotta love how this world works.

Anyway, the story is not over. Luckily for me, TTI has friends in high places.

After our 1 night complimentary accommodation, the next day, I dropped a quick text to our new found buddy RSD, and literally, WITHIN THE HOUR:

A merc came to pick us up!

This time, we were chauffeured to RSD’s personal residence itself.

This is me with RSD and his wife and their 2 dogs.

Now, this is something interesting. Upon arriving at RSD’s residence, we were looking for a front porch of sorts to take off our shoes, like how normal guests in SG do right? Instead, we were led directly to a lift within the house, which brought us up to the top floor (yes, you can imagine how massive the residence is from this picture.)

All this while, we kept our shoes on! Walking throughout the house on our house tour!

Almost the entire house was carpeted, except for the outdoorsey areas. But everyone was wearing footwear, including RSD himself and his wife, and the other minders/helpers etc, so I figured that’s just how the culture is.

Thank god I didn’t step on some mud or stuff like that before entering!

Not sure if this is how the normal Swiss live (aka wear the outdoor shoes straight into the house and walk around with them on) or is it because the uber rich Swiss have too many servants to clean the carpets, so gotta purposely dirty them a bit to generate some work. LOL.

Anyway, long story short, we ended up touring the entire Switzerland and spending an entire month there instead, way past the reopening of the airports. So even now, I’m kinda like a mini expert on most of the touristy towns in Switzerland. Would’ve included more photos, but it’s getting cumbersome to have to edit and block out faces all the time. So that’s the end of my story.

Hope u guys enjoyed it.

Remember, fly Singapore Airlines pls.

Power Of Property

I just sold 1 of my investment properties. Literally just.

In this post, I’d just share my personal thoughts and experience when it comes to property, specifically, the SG property sector. I have had quite a bit of experience in overseas properties as well, but I won’t talk about that just yet. Most of what I write would, I think, be applicable to the typical Singaporean university graduate.

It might not be useful or applicable if you don’t fall in this category. It might even sound outright silly if you are born uber rich. But these are all my personal thoughts and my experiences when I first started out, so tailor it to your own situation if you will. I don’t profess to be some property expert, and anyway, personally, I think all those who do, are mostly charlatans.

FOR YOUR 1ST PROPERTY, BUY DIRECTLY FROM HDB AND DO SO AS EARLY AS YOU CAN

I thought this 1 is obvious… yet it’s surprising how many young folks actually don’t do this.

HDB has a built-in rebate and when you buy directly from HDB (not resale!), it’s almost a certainty that you’d be able to sell at a pretty sizable profit after the 5yr MOP. I don’t think anybody disagrees with that. It’s factual.

There are also all the various rebates you can apply for, I don’t even know what they are anymore. But stuff like proximity to parents rebates, low income rebates etc, whatever. Go do it.

If you are fresh out of university or poly, keen on getting on the property ladder, this definitely should be your 1st port of call.

But there are many common reasons people give for not doing so:

“Buying a BTO will mean a long waiting time of several years and I cannot wait!”

“When it’s my turn to choose, the only available flats are lousy units! Low floor! Poor ventilation! Noisy! No view! Near the road! Just above the rubbish bin! Just beside the multi-storey carpark!

“Don’t have the location I want!”

TTI’s response: Don’t be a prima donna la! If you are born poor or mediocre, don’t ask for the stars. This is life. Unless you are marrying Kim Lim (you lucky bastard!), otherwise, work with what you are given and choose the best path forward.

Can’t wait for a BTO? Well, what’s the meaning of can’t wait? Just bunk in with either side of the parents, what’s the issue with that? Live all your life with parents, suddenly with a significant other, cannot stay in the same place meh?

Or go buy a sale of balance flat from HDB. Poor location or lousy unit or whatever, it doesn’t matter. You make the best out of the situation.

Your 1 singular focus should be on deriving the maximum gains out of your 1st property. Not whether it makes you happy, makes your life more comfortable, whether you wake up to a trillion dollar view that tickles your innards the sec you open your eyes. All that will come… just not now.

Personally, I bought a sale of balance flat from HDB more than a decade ago. During that time, you were given a number, and mine was a shitty number near the end of the queue. Everyday, I’d log in to HDB and there’s a real time indicator that shows you how many of the flats are still available before it reaches your number. It looked promising at the start, although the location itself was already pretty sucky to begin with. But at least there were higher floors, a wider variety, different facing etc units still available.

But alas! By the time it reached my turn, OMG, I was dejected. Really.

I was left with stuff that nobody wanted! And I mean that literally! Cos the few days before me, all the folks in the queue before me, chose to give up and not take up any units cos the number of available units didn’t change at all. That’s how bad it was.

So there I was. It was a lousy location in a not-so-popular neighborhood, and even then I was left with pretty much only 2 unwanted units:

  1. Unit is right beside the multi-storey carpark. And I mean directly beside. Any one in the car park can peer into your living room. Lots of human traffic going past your unit everyday. Great if you are buying a bubble tea stall, not so great for a residential unit.
  2. Unit is right beside the main road, so close that anyone on the upper deck of a double decker bus would be able to peep into your living room. Obviously noisy. Unit is also directly above the rubbish collection point where all the rubbish thrown down the chute lands up in.

Oh, and did I mention both units are on the 3rd floor?

So yes, not ideal. Everything sucky you can think of is there. I could of course, choose to forfeit and just return to queueing again, and/or go buy a resale unit. Mind you, my finances as a young dr meant that I could already very comfortably afford 1 in the resale market if I wanted to.

In the end, I opted for option 2.

The cost of the 5 room unit was $252,000 and I managed to re-sell it more than a decade later for $430,000. And that excludes many many years of rent. More on that later.

Looking at the numbers, that’s an approximately 71% capital gain over >10yrs, which doesn’t sound anywhere near bitcoin-like, fancy returns, but do remember that with all things property related, there’s always some huge leverage built in from the property loans, so the actual returns would be something like x5, if you base it on your actual paid up capital. (assuming you paid up 20% as down payment).

So in this instance, assuming I paid 20% (I can’t remember what downpayment I plonked down), actual gain on committed capital would be something like 350% over 10yrs ++.

RENOVATION COSTS SHOULD BE A MINISCULE PORTION OF YOUR BUDGET

This should also be a no brainer. I think lots of new ginahs now think they are some rare commodity after graduating, and start behaving like they’ve “made it”.

Hello, breaking news for you, NUS alone churns out 31,000 graduates every single year, and that’s not even including the masses of very hungry foreign graduates that’d inundate our shores every year. You ARE very much a commodity. Your 1st property isn’t for living the high life. Neither is it for showing off. It’s just a mere start. You start as a puny, nobody character. You haven’t made it. You’ve only made it to the START.

Got play role playing games before? When you start out, do you buy the most powerful sword in the game for your character? Noooo….. you gotta go prowling around, kill many many creeps and gain both experience and gold, save up the gold, level up a lot, before being able to go buy your premium weaponry right? That involves losing a lot of blood and mana, you gotta go through some pain, try to rest and heal up, drink your healing potions and all that, and continue the good fight to accumulate gold right? In the meantime, what do you do? You make do with the lousy normal armor that random creeps give you when you kill them, right?

Ditto in real life.

The problem that young kids have nowadays is that there’s too much social media around. God forbade that your 1st property looks like shit, cos what will you be putting up on Instagram?! You’d be a laughing stock!

Thank god TTI doesn’t have social media. No Facebook, No Instagram, No simi Insta stories, No Snapchat or whatever.

I do have Facebook shares though. OK, and I do have InvestingNote. LOL.

Now, what happens if your spouse doesn’t agree with you? Afterall, it takes 2 hands to clap. What happens if your spouse insists on going into the resale market to splash out on a 30th storey HDB unit in a prime area with a $50k COV, and spend $80k to renovate it to his/her dream Mediterranean styled, not-so-humble abode, so that you guys can put it up on Instagram and be the envy of your fellow peers?

Then you follow the 3 step rule.

Step 1: Explain, very calmly, to your spouse, in great detail, the very solid rationale of why your singular focus should be on maximizing the ROI on your property. Nothing else matters.

Step 2: If your spouse disagrees further, explain AGAIN, and this time, end with “TTI says so one!” (Include link to this post if necessary)

Step 3: If your spouse continues to disagree vehemently, drop him/her pronto, and instead, look for 1 new one amongst the 4,500 TTI followers. You can’t go very wrong with that. At least ideals would be similar.

For my 1st property, yes that miserable, pathetic 3rd floor HDB unit, I spent a grand total of… <drumroll please!>

$18k on the renovations!

That INCLUDES all furnishings, AND even the freaking air conditioning!

YES YES YES.

You can’t beat that. OK, that was more than a decade ago, so at that time, $18k went a bit further than now. But still… it’s pretty impressive eh?

I even did the painting of the whole unit myself! Just to save on the $1k painting fee.

I’d have included photographic evidence of that here, I took several photos then. But they are mostly of me bare-bodied, albeit I was a lot a lot younger then, with a bod to die for, I reckon it’s too sexy to be put up here. Might be too NSFW for many young ladies to accept if they see this in their mail box.

I think it took me something like 3 entire Sundays, cos I had to stop painting before 6pm cos it gets dark and there were no lights installed then. (You paint first, then install the lights) Looking back, it was actually kinda fun tbh. Plus u get 1 helluva workout.

Well, the end result is what you’d expect a $18k renovation budget to look like.

Simple. Bare. Plain. Unassuming. Boring.

But I didn’t care. And still don’t. I didn’t have a house warming then. (and even now, with a much more fancy abode, I still don’t have house warmings.)

Like I said above… “SINGULAR FOCUS”. Repeat that mantra a million times if it helps you to focus.

In conclusion, renovation costs is an expense. This is not like in the West where you can literally re-jig your entire property, and go to the bank with a higher valuation, get a higher loan and try to recycle your capital into other properties. Just doesn’t work in SG.

CHOOSE THE LARGEST UNIT YOU CAN, WITHIN YOUR BUDGET

In general, public housing prices, especially if you are buying from HDB directly, are still very much affordable to most folks (who bother to work). Buying the largest unit that you can reasonably afford to, makes the most sense because any returns that you’d get eventually, would be a function of the unit price. If property prices have risen say, 10% since you bought, buying a 2 room unit that costs $180k gives you a $18k capital gain, whereas a 5 room unit that costs $300k would give you a $30k capital gain.

Again, obviously, personal budgeting and finances come into play, so plan accordingly. But IMO, 2 uni graduates working would be able to afford any 5 room unit if they buy directly from HDB.

WHEN INTEREST RATES ARE LOW, TAKE THE MAXIMUM LOAN

Interest rates have been low for a loooong while, all thanks to the Americanos. This is a policy that I am highly critical of, but hey, I don’t make the rules around here. So I’ve to learn to just position for it to derive the maximum benefits.

When rates are low, you just know that prices of hard assets will be well supported. Plus the whole idea of property is to utilize the immense leverage inherent in it. Actual capital gains can never be some crazy number: you don’t have a property that appreciates 100% within a year. If it is this volatile, I think many governments around the world would collapse and society will be in anarchy already.

Taking the maximum loan just merely means that you are maximizing the leveraged component inherent in your property.

Again, as mentioned above, if you are paying only a 20% downpayment, and if you get a say 50% capital gains upon divestment, the REAL gain on your capital that you paid up is x5 of that aka 250%. (Ok ok, I know it’s not exactly like that, since you pay down your loan over the years, and since there are other factors like maintenance costs and rental and MCST if it’s private etc, but this is just a rough estimate)

UPGRADE TO PRIVATE, WHILST RENTING OUT YOUR HDB

Now, after the 5yr MOP, with 2 graduates working for 5 yrs, you’d usually see some career progression and with it, some stability and increase in your remuneration. Plan to buy a private property as long as your combined finances can comfortably afford it.

This is a somewhat controversial point, and some folks will probably disagree with me. Thing is, the real massive gains in property are always made in the private property segment. Say what you will, but how much of a capital appreciation can you make in HDBs? It is still meant to be a safety net and the bare minimum accommodation level so the government cannot let prices go berserk no matter what.

And there’s the renting out of HDB part. Renting out your HDB gives the HIGHEST yield. By far.

After the 5yr MOP, I rented out my HDB unit for several years, at rents ranging from $2.4k per month to as high as $2.9k per month. Based on the initial price of the HDB, that works out to be a yield of 11.4% to 13.8% per annum!

You just can’t beat the yield on that. Plus there’s almost minimal cost as you don’t have to pay MCST etc.

The only downside currently is that to buy your condo whilst keeping your HDB, it’d be considered a 2nd property now, and there’d be ABSD on that condo purchase, which is a real bummer. During my time, this ABSD thing didn’t exist yet, so it was incredibly profitable to hold onto and rent out the HDB. (Still had to pay income taxes on it though!)

Also, another consideration is the age of your HDB. IMO, and very much logically, HDB, being a 99yr leasehold asset, cannot appreciate indefinitely. There’s no data as to what is the average age of HDBs before the prices start to taper, reverse course and begin depreciating, but if you had bought a new unit direct from HDB, it’d be several decades before this becomes your problem. You’d have a good decade or 2 to happily collect rent, before offloading at a very nice price, and making this depreciation problem someone else’s.

Now, to be clear, there’s nothing wrong if you’re contented with staying in your HDB for pretty much your entire life. Let me repeat: I think there’s absolutely nothing wrong with that. It does mean that you can’t be building a property portfolio though, because well, if markets are booming, you can’t just sell out when you want to cos you still need a place to stay.

And this post is exactly about that.

DON’T JUST FOCUS ON THE PRICE: GO FOR QUALITY AT A REASONABLE PRICE

For my 1st condo unit, I made the slight mistake of placing too much emphasis on the price.

Price is definitely important: you don’t want to over pay. But when it comes to property, it’s not the most crucial aspect.

I went for the typical Graham cigar butt strategy: the seller was a foreign student who just finished her studies, and was waiting to conclude the sale of the property before flying back to the UK. The property wasn’t hers, it was her mum’s. She was a young lady dying to leave SG asap, and that helped a lot during negotiations. She was practically on my side, bugging her mum to just accept the offer and get it sold, just so that she can go back to UK for her summer holidays.

Going for a great deal price-wise helps to protect my downside… but without any competitive advantages, the unit would be hard to sell eventually. Others will also focus on the price, if there’s no distinct selling point. And when it comes to properties, it’s a very emotional thing. When you’ve the right product, with a certain unique selling point, it’s much easier to sell cos you just know there’d be a segment of people out there that this appeals to.

Without revealing too much specifics, I’ve owned that property for 7 years, with the last 2 years being rented out.

Total capital gains: 18.4% for 7 years, which works out to be a gain of about 92% over the committed capital. Rental yield, taking into account the MCST paid, was about 3.9% per annum for 2 years.

I’ve also written previously that I just bought another condo: https://thumbtackinvestor.wordpress.com/2020/09/06/thumbtack-fund-report-1-tough-times-dont-last-but-tough-funds-do/. That was a mere 22 mths ago, back in Jan 2020:

“I’d add a little footnote here regarding property. As mentioned in earlier posts, I’ve also bought another property just earlier this year, in Jan. Again, the timing COULDN’T HAVE BEEN WORSE. Like serious, wth is wrong with lady luck?! She needs to be a tad more fair. Just throw something my way once in a while can?”

Buying property back in Jan 2020 just before covid struck seemed like a stroke of uber bad luck then, but it turned out to be exactly the opposite! Ah, the unpredictability of life.

This unit was purchased with a clear competitive advantage. Location’s fantastic, with a view that stretches as far as the eye can see. And the land in front of me are all developed with errr a certain type of low-rise property, and they can’t be redeveloped easily, so this means that the magnificent view is here to stay. No surprises anytime soon.

The specific type of unit is also relatively rare within the development, which means there’s little competition if I decide to sell.

A recent sale of a similar unit tells me that the unrealized gain for this unit is now already 16.7% and I’ve only bought it for less than 2 years!

This gain beats the previous unit’s gains and that tells me that it’s better not to focus solely on prices when buying property. It is something whereby emotion plays a huge role afterall.

Buy quality, at a reasonable price.

WORK WITH A SINGLE AGENT, AND NEGOTIATE FOR BETTER RATES IN RETURN FOR REPEAT BUSINESS.

What is the difference between a Real Estate Agent (REA) and Real Estate  Negotiator (REN)? - iproperty.com.my

Property agents won’t like me for saying this, but it makes sense to work with a SINGLE agent over a long period of time. If you are going to build a property portfolio over time, there’s a lot of business to be gained, and agents would die to have a client like you.

Every rental, purchase and sale requires an agent and there’s little downside for them. Well, in theory, you don’t need an agent to represent you when you purchase a property, but I always still get my agent to do so. Cos said agent would get co-broking fees, which would make him happy, and it adds to your value proposition.

In return for all this repeat business, he’d be much more willing to negotiate a reduced agent fee. I don’t think I’ve ever paid market rates for my agent fees, it’s always a lot lower.

Also, if you are building a property portfolio, in all likelihood, your peers and social circle would be doing the exact same thing. So if I were a property agent, of course I’d be more than happy to accept a lower fee in exchange for not just repeat business, but referrals and access to a group of clients whom I know will almost certainly require my services on a fairly regular basis.


Alright, that’s all I have for this pretty rare property related post. I don’t usually talk about property much because… well, what’s there to talk about. Things move at a snail’s pace when it comes to property. You just buy a good asset, do it up reasonably well, and collect yield and hold till the cows come home. It’s hard to go wrong if you do that.

Adios.