Wednesday, April 25, 2012

Mulling a second property

It is either a sign of an unusually wealthy middle class, or a dangerous bubble in the making.

Suddenly, my peers are all looking into buying a second property for rental income. I can't deny that it is my aspiration one day too. A spare home pulls in passive income, and helps to preserve the value of your savings in these days of heady inflation. Who could have thought that such a time would come for our little nation, when we salaried working folks can hope to join the formerly exclusive club of property investors? No wonder property prices defy gravity despite all of our government's cooling measures.

But somehow for me, the Math isn't adding up favourably. Don't forget that interest rates never remain static, and a typical mortgage loan is likely to stretch through times of higher financing costs. This means having to save up a huge sum for refinancing, does it not?

Besides, if everyone is looking for tenants, who is going to be the tenant? Our country's population is already exploding. What are the chances of further significant increases to soak up the spare housing capacity that is frantic construction now?

Yet maybe human nature is such. These considerations aren't stopping me from lingering fondly over lavish condo advertisments, and worse, checking out condo prices every week. is such a struggle to keep a cool head in a hot market. Luckily I'm held back by a lack of resources anyway, hahaha.

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