singapore asia usa tips for property buyers & sellers

October 6, 1997
To: Owner of 30-year old house in Chancery Hill.

Suggestions to make Chancery house rentable to expatriates

$4,000 - $5,000 for older semi-detached in Chancery area is within market range. However, yours is much older, does not have attached baths in master bedroom and to attract expatriates, the following is suggested:

1. Change mosaic tiles in living/dining rooms, stairs, verandahs and other places to non-glossy big white tiles. No fanciful rectangular/floral/diamond-shaped tiles or tiles with Asian designs or multi-coloured designs. If you wish, get white tiles with light grey specks but not dark tiles.

2. Check whether you can attach a bathroom to one bedroom. In my case, I had a Mount Sinai Terrace house with same layout as yours. I opened the wall of this sole upstairs toilet and attach it to one bedroom, got rid of the balcony so as to enlarge the area of this bedroom.

3. Bathroom walls need to be tiled with light-coloured, not pinkish ceramic tiles. I used light gray squares homogeneous tiles.

4. Resist temptation to use blue or pink long baths, sinks and toilet bowls as they fade in colour over time. Use all white.

5. Parquet floors on bedrooms needs polishing but are nice for Caucasian expatriates who using appreciate wood. I used all white ceramic square tiles in the bedrooms to save operating costs.

6. Old awnings need to be replaced or discarded to allow natural light to get into rooms.

7. Living and dining rooms to be air-conditioned with new split unit air conditioners. House fully air conditioned with split unit air conditioners attract quality tenants and expatriates and low vacancy rates. You may need to construct a glass sliding door at stair case to prevent cool air of living/dining room from escaping upstairs.

8. Kitchen cabinets and whole kitchen needs to be new. Use light-coloured kitchen cabinets or make tiled table top to save on wear and tear.

9. Paint the whole place white.

10. Garden needs to be turfed with cow-grass. Presently bare and showed soil erosion.

11. Maid's room or store room with toilet. Do not save money by not renovating Maid's room and get rid of the squatting toilet. Replace with sitting toilet bowl.

(Read Tips for expatriate Tenants and Landlords in www.asiahomes.com) if you have time. Many Singaporeans neglect the Maid's room, leaving it with squatting toilet and mosaic floor tiles. Prospective tenants get the perception that the house is very ancient and may request change to sitting toilet, incurring more costs for the Owner.

12. All above were done by me in the above mentioned Mount Sinai Terrace house 13 years ago when renovation costs amounted to $40,000. I had no problem getting expatriate tenants (Japanese, Indonesian and Swiss). Presently, tenanted at $4,000 to a single Swiss person. Usual rental is around $3,000 there. Your place should be much easier to rent.

13. Basic principle: Europeans and Japanese love white (clean) and bright rooms and kitchens. Get light to come into bedrooms by using glass sliding doors if possible. Renovate 100% if you want expatriate tenants. If not, you are left with local tenants who will want "cheap and good" housing.

Case File.....

Case 9. Sept 22,97. 3 reasons why you should not buy an HDB apartment if you want to be an entrepreneur. Business man needs money for business. At least 4 contacts wanted money for their business operations. One spent $95,000 renovating his 2-year old Serangoon Executive Apartment and reckoned it will be worth $700,000. He bought it at around $300,000. With return of $30,000 to the Central Provident Fund, he should net $370,000 cash assuming he had a loan of $270,000.

Unless the Singapore Government revises its restrictions to encourage entrepreneurship, HDB apartments are not for business people because:

Banks do not give overdraft using HDB apartments as collateral unlike private housing. In above example, $50,000 overdraft will be given if it was a private apartment but its value will be around $450,000, not $700,000. However, it may be worth more if it was private housing.

HDB will buy back at low prices if Seller sells <5-year old apartments which must be sold to the HDB only unless they are over 5 years old.
Ethnic quotas may restrict your sale only to certain races and these minority races will "press" down your selling prices.

Case 8. Sept 22,97. Investor not to be speculative. Ground floors should not be bought if you want to speculate. It is hard to find tenants because everybody can see your living and dining room and bedrooms' curtains have to be drawn all time.

Case 7. Sept 22,97. Investor to be careful as regards the size of the "maid’s room". If you want to rent your unit easily and are limited by budget, check out the dimensions of the "maid’s room" for new developments bought off the plan. Today, I was at the brand new Anchorage Condominium, looking at the 3+1. The "+1" room is not big enough to put one child’s mattress. Ridgewood Condo’s 3-bedroom condo has same problem. It has a a very small store room as well. It is hoped that Developers will provide decent sized "maid’s room" for new projects as buyers become more sophisticated.

Case 6. Sept 22,97. Can first-time home owners rent their properties? One Owner asked me today as to whether new home owners are bound by same regulations as the HDB (public housing) apartments and cannot rent out the unit. I do not think so, but please refer to your loan agreement with the bank. The bank may have given you a lower interest rate loan on condition that you do not reside in the unit. I know of one bank which increase the interest rate when the Owner rents out the apartment.

Case 5. Freehold and private property recommended for first-time buyer. If you have a choice, buy a freehold or 99-year leasehold private property rather than the HDB or executive condo. When your children grow up and need money for further education overseas, you will find that the bankers will say NO to your request for loan.

This is because HDB properties cannot be mortgaged to private banks. You may have bought it for $100,000 and it is worth $500,000 now. For private properties, the bank may give you a loan of $250,000 easily. Unless the Government changes its policy, you are better off buying a smaller private property in an outlying district if you will have >one child!

Many bright but not outstanding children cannot go to University overseas because the parents have no financing for them unless they down grade from 5 room to 3 room HDB. Benefit from the experiences of old timers. Best is to buy freehold property!

Case 4. Forget about the experts if you need a roof over your head. We have much more information than in the past. If you think that property will drop 100% in capital value, don’t buy. If you need one to stay, buy it and forget about the advices from the "experts". Around 5 years ago, the experts caused many to think that there will be a slump but there wasn’t one. Those who heeded the expert’s advices to sell found they could not buy back one.