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How I Bought 8 Properties in 10 Years (Part Three)

Both 2011 and 2012 were busy years for us property-wise. Aside from the purchase and subsequent sale of a commercial building near Little India I talked about in Part Two, Hubby and I purchased a condo unit and 2 terrace houses.

Following the General Election in 2011, a series of property cooling measures were introduced to quell the discontent the public had for the fast rising housing prices. Young couples had difficulty settling down as residential prices were out of reach, couples put off plans to have children as they could not afford a bigger place, etc. Singapore had experienced a period of loose credit and low interest rates after the Asian Financial Crisis, leading to ease in obtaining mortgage loans and speculation in property. There were long queues at showflats and speculators were flipping properties to make quick bucks.

We were sitting on a fair bit of cash at that time and needed to act quickly to re-invest before further cooling measures kicked in, rendering it difficult or impossible for us to obtain mortgage loans.

I scoured the net for properties to view. It was a tricky period because many others were rushing to invest too, and it was often crowded at viewings. We had unscrupulous real estate agents whisper to us for under-table money to obtain a signed Option to Purchase from the seller and we met sellers who backed out of sales and raised their asking price suddenly. Gone were the days when "For Sale" signs outnumbered buyers and mortgagee sales were aplenty. Those were all clear warning signs of an overheated property market, and we foolishly marched right into it.

The condo unit we purchased in 2011 for S$870,000.00 was a 2-bedroom apartment in a boutique project. It was located in District 15, and was within walking distance of the MRT and other amenities. The condo was relatively new and had basic facilities like a swimming pool, gym and BBQ pit. Not having a whole host of other water features and a full range of facilities like tennis and squash courts meant that its monthly maintenance could be kept low.

The unit was in pristine condition and even had a lovely balcony. We met the sellers during the viewing and they explained that they had bought a bigger place, and would need to rent back the apartment after selling until their new place was ready. We liked that there would be no down time in searching for a tenant after purchasing, and quickly sealed the deal with them.

For a good few years when the demand for housing in Singapore outstripped supply, the apartment was rented out at about 4.5% yield. It is now closer to the 3% mark, with periods of time when it would sit empty waiting for a tenant. Based on URA's records of last transacted prices, I estimate that the value of this unit has increased by about 20% since our purchase. A far cry from the kind of stratospherical growth we had experienced with our commercial properties.

Both the intermediate terrace houses we purchased in 2012 were also in District 15. They too were within easy reach of the MRT Station, eateries, shops and prestigious schools. Both houses caught my eye for their sizable built-up area. We have a penchant for houses with maxed out plot ratio, efficient use of space and breezy roof terraces.

I had been fervently searching for freehold landed houses below S$2 million for a while when I came across the first house. I knew every property in that range like the back of my hand, and none of them had anywhere close to 3,500 sq ft of space nor a roof terrace like this house. I leapt at the phone to ring the agent within minutes of her placing the ad.

We were the first viewers of that property. Its spacious interior, functional use of space, and large roof garden set it miles apart from the rest of the field. We secretly rubbed our hands in glee, and stifled our chuckles, lest the agent detect our giddy excitement.

We were no match for this experienced agent though. Her nose was keener than a bloodhound's and knew we were hooked the moment we locked eyes! We were drawn into discussion about the price there and then, and missed out doing our due diligence totally.

The seller's asking price was S$1,880,0000.00. By the time the skillful agent was done with the negotiations, she had successfully extracted another S$8,000.00 from us. The purchase price became S$1,888,000.00.

Shortly after the purchase, our failure to conduct proper due diligence bit us in the butt. Had we surveyed the area properly, we would have realised that the immediate neighbours would be an issue right off the bat. They had a large purpose-built structure in their garden for burning of joss papers and incense, and the hundreds of deities displayed in their living area were in plain view from the street. On occasion, large numbers of disciples would gather on the street, burning copious amounts of offerings. We captured photos and videos of those deeds, but our mousy authorities never took any action, ignoring our repeated pleas.

Obviously, tenants frequently used the air and noise pollution from next door as an excuse to depress the rent. It was hard not to be sympathetic when they brought asthma into the picture. Rental yields never went beyond the 3 to 4% mark.

The final straw which made us put the property up for sale in 2018 was the emergence of massive cracks at the back of the house. We missed out on checking for subsidence of the property back in 2012. By 2018, the cracks were so bad that permanent repairs would run into the hundreds of thousands, and we could not be certain that it was safe for tenants to continue living in the premises.

One of many nasty cracks...

The agent who sold us this property did such a fabulous job mesmerizing us that we knew she was a keeper. She put the property back on the market for us, and eventually found us a buyer at S$2,188,000.00. We did the ethical thing from the get go, and highlighted the cracks to every viewer so they could get engineers' quotes if they were interested.

After 6 years of holding the property, we made S$300,000.00 plus rent. A paltry 16% growth in value. We were just thankful that the house didn't come tumbling down before completion of the sale and that we didn't have to fork out hundreds of thousands in repairs.

From this house, we learnt the important lesson of conducting proper due diligence before committing to a purchase. We later found out that the houses in the area were built on swampy reclaimed land, and subsidence was a headache for all the owners in the area. To stage their houses for sale, sellers may mask cracks cosmetically, so it is crucial for buyers to keep a keen lookout for such defects. Ask to move furniture, washing machine, etc aside to inspect certain areas like the back of the house if you have to.

Look out for hard to solve issues like leaks too. Water stains, peeling paint, mould etc are obvious telltale signs of such problems. Severe leakages along with subsidence are 2 of the most infuriating problems to deal with. In some instances, they may require a total tear down and rebuild, as the root of the problem could well be the poor foundation of the house.

The most positive thing which came out of purchasing this house was the invaluable friendship we struck up with the agent. She is by far the most professional agent we've come across from our years of investing in properties. After 8 years of knowing her, she is like a big sister to me, teaching me to cook when my helper ran away, showing me how to cultivate a herb garden, constantly giving me encouragement and support, reading my blog when no one would... E-mail me at if you'd like a referral.


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