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Investing in a property with a guaranteed return
19 Nov 2018 (35 views)

When you invest in an property, you should avoid those that comes with a guaranteed return for the initial years. The developer usually adds the cost of the guarantee to the purchase price. 

For example, the property is worth $X but the developer promises a yield of 6% for the first 2 years. The property will be marked up by 12%. 

This practice applies mainly to overseas properties. The buyer does not know the actual market price and may not be aware that the price has been marked up. 

See this example about Puteri Harbor in Johore.

There are also other risks involved in buying an overseas property. It is best to avoid them, unless you are familiar with the market. 

It is all right to invest in an overseas property if you have the spare cash to purchase the property outright and the price is only a fraction of a similar property in Singapore. You should also ensure that there is use for the property, e.g. to provide a place to stay for overseas education, or for a retirement home.
 


Investing in a property with a guaranteed return
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When you invest in an property, you should avoid those that comes with a guaranteed return for the initial years. The developer usually adds the cost of the guarantee to the purchase price. 

For example, the property is worth $X but the developer promises a yield of 6% for the first 2 years. The property will be marked up by 12%. 

This practice applies mainly to overseas properties. The buyer does not know the actual market price and may not be aware that the price has been marked up. 

See this example about Puteri Harbor in Johore.

There are also other risks involved in buying an overseas property. It is best to avoid them, unless you are familiar with the market. 

It is all right to invest in an overseas property if you have the spare cash to purchase the property outright and the price is only a fraction of a similar property in Singapore. You should also ensure that there is use for the property, e.g. to provide a place to stay for overseas education, or for a retirement home.