Today is a public holiday in Singapore known as Hari Raya Haji, a Muslim festival. Aside from writing this journal entry, I plan to study some French, my recent favorite pastime.
Yesterday, after months of dithering, I finally informed my landlord of my consent to renewing my apartment contract for another two years at a rent five percent higher than what I’m currently paying.
It’s certainly not cheap, but I believe it’s well worth the money as it’s the comfortable size for a single man like me, and conveniently located near the subway and bus stations, requiring only 20 minutes of commute time to my workplace.
My goal is to eventually buy an apartment in Singapore, but given that I’m already 50, I don’t want to take out a loan that’s too big and end up being over-leveraged. As long as I’m working downtown, it still makes sense to keep renting a centrally-located place while setting aside cash for my future property investment.
Over the years, I’ve noticed that living in the center of town has brought me substantial benefits, not only in terms of short commutes but also in terms of convenience in meeting friends for dinners and drinks. It’s a fantastic feeling not having to worry about catching the last train or paying for a taxi ride at a hefty midnight surcharge—I can simply walk home after late-night drinks as my place is just around the corner.
Maybe, years from now, I will finally buy an apartment of my own. When I am retired, I won’t need to be as concerned about living downtown as I am now. I can move to the outskirts of Singapore to get more value for money.
Even in the suburbs, location will still matter in the sense that it needs to be close to the train station and the supermarket. Luckily, the subway system is still robustly expanding in Singapore, meaning that time is on my side: the longer I wait, the more choices of property I will have.
The size will also be important because, while I don’t have a strong desire to possess most physical things like clothes, watches, and tech gadgets, I do like to buy books and definitely want a space big enough to accommodate my own library. It would be heavenly to surround myself with fine books and spend my retirement years reading to my heart’s content, day in and day out.
Speaking of property investments, one of my friends recently bought an apartment in downtown Tokyo. As she is very wealthy, she bought it outright with cash without taking out a loan, so she won’t be affected by the interest rate movements.
I believe she made a sound investment decision for several reasons:
First, the property market in Tokyo is booming lately, with not only wealthy Japanese people snapping up property, but also foreigners from all over the world, aided by the favorable exchange rate of their currencies against the Japanese yen. The value of her property will no doubt keep rising over the next few years.
Second, unlike many other investors, my friend didn’t go for those high-rise waterfront condominiums along Tokyo Bay. Those properties, while looking fancy and boasting breathtaking views, are built on reclaimed land from the sea, making them susceptible to soil liquefaction in extremely earthquake-prone Japan.
Moreover, their constant exposure to sea breeze will inevitably make them deteriorate at an accelerated pace. Her property, on the other hand, is located inland on solid ground, making it much more stable and durable.
Third, my friend bought her apartment second-hand instead of brand new. For some reason, Japanese people like to buy newly-built properties, but from a cost-benefit analysis point of view, it is not a smart decision, as there tend to be much more mark-ups slapped onto new apartments by their developers compared to second-hand ones.
Besides, buyers of brand new properties are completely unaware of what potential structural issues might arise down the road, due to the faulty design or cheap materials used by the developers to cut corners. The real quality of a building only manifests itself seven to eight years after its completion. My friend was prudent and wise in that regard.
Property investment is forever a fascinating topic. Whether I decide to rent or buy, I need to do my own homework thoroughly and not rush into any rash decision. I hope I can make a success of it when it comes time to take the final plunge.
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