Tips To Buy Property For Maximising Rental Yield

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Do you want to maximise your rental yield for your Housing Development Board property (HDB) in Sengkang? The concept is pretty simple but the calculation does take a bit of work. You can either increase the monthly rental that you collect from your tenants or reduce the amount that you are paying for your investment property. Here are some property pointers to keep you right on track in maximising rental yield by choosing the right property.

Tip #1: Look into 99- years leasehold instead of freehold property

Though the pride of ownership of owning a freehold does level up your property status but a freehold property usually costs about 15% more than a 99-years leasehold properties in the same location. But if you are trying to profit from your property, freehold property does not necessarily generate your rental yield 15% more because tenants do not care the property’s tenure.

Even if you can afford a freehold property, use your buying power to pick the best location. If you are buying a resale condominium, make sure you run a check whether it’s well-maintained as a poorly maintained development is the usual deal breaker.

Tip #2: Buy resale units

All shiny new things like new condos are Singaporeans’ favourite. But when it comes to tenants, it doesn’t matter if the property is new or not. There are even some cases where expats prefer to stay in a lively neighbour hood though the property is aged. Don’t restrict yourself by only considering new launches when it comes to property investment for rental yielding purpose. If you have come across a unit that is affordable and well-maintained, think no further and snap it up. That way, you’ve skip few parts and can straightaway earning your rental income.

Tip #3: High levels unit may not be better

The higher you go, the higher quality your life in the house. With less noise, dust and flying insects, you are sure to get lesser hassle and troubles from those menial problems. What’s even better is that you could get more wind and better view with higher floor unit.

However, as a savvy property investor, not imposing your own personal preferences onto property choices can increase property yield. On certain cases, expats are different, they would prefer to stay in lower floors apartment or condos, especially facing the greenery or pool. Ground floor condo units with a patio that opens up directly to the pool are popular with expat families. While expat tenants may not be concerned with keeping their residence dust free or insect free but they will prefer to be able to look at calming oasis of greenery after a long day.

But then again, bear in mind that when the time comes to sell the lower floor property units not facing the pool might be challenging to sell to Singaporeans.

Tip #4: The demographic

As most of the expatriates make up bulk of rental demand in Singapore, which is not entirely true. In Jurong or Jurong West, HDB units are very favourable among the factory workers who are working in Jurong Industrial Estate. Meanwhile, homes in estates near universities such as Pasir Panjang and Clementi are popular with tertiary students as tenants. The demographic doesn’t just stop under the expat group, there are many variations in demographics.

Let’s start off with expat families, it would make more sense that they would prefer to reside where the international schools within their vicinity. What about single expat? Generally, single expats prefer shoebox unit over larger units. But then again, there’s always an exceptional cases where certain tenants or expats have their unique preferences. Some may prefer to have more space, others may need daily conveniences nearby.

Tip #5: Look for properties outside Central Business District area (CBD)

Speaking of location, most people assume that investing in CBD area is the safest bet. But, if you are looking for a bargain, you might want to consider looking into areas outside of the city such as Yishun, Hillview and Pasir Ris. Fret not, these properties would not look less appealing since they are located outside of the CBD area. Some expats prefer to stay in suburbs area and used to commuting for an hour or two to work everyday. They prefer to be somewhere less bustling and serene surroundings. The key in this location investment is select properties near to transport nodes where it is easy accessible to transportation.

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