How to identify
good rental yield investment?
7
Checklist for a good investment
Price Point vs Rental
CCR Condo New Launch Price Chart - 99.co
CCR Condo Rental Chart - 99.co
Ensure every dollar is well-spent. For this, we look at the price-to-rent ratio, which is the ratio of home prices to annualized rent in a given location.
If you already own a property, Questions you can ask yourself:
• Can every dollar you spent in your property generate the most profit out of rental?
• How can every dollar you invested in your property multiply itself by tapping on rental?
Don't work hard for the money, let the money work hard for you.
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Supply vs Demand
When demand is high, property prices rises. When supply is low, property prices rises, too. This applies for rental as well.
If you already own a property, Questions you can ask yourself:
• Is your property in an area where there is high demand for rental?
• Is your property in an area where there is low supply of landlords?
The man who follows the crowd will usually get no further than the crowd. Don't go to where supply is high, unless demand is higher.
Property Facilities
Normanton Park Siteplan
Sky Eden Siteplan
Why are tenants okay to pay a premium for condominiums if they can get a cheaper rate for HDB? The main differences is the additional sense of security and statuses if they rent a condominium. Other facilities like swimming pools, gym, tennis courts are add-ons that can help to position your property better (more perceived value for tenants).
If you already own a property, question you can ask yourself:
• Does your property provide that add-ons for your tenants?
Always raise its 'perceived value' than what you take in cash value.
Location
Normanton Park Location - Street Directory
Sky Eden Location - Street Directory
Tenants usually prefer houses that provides more public conveniences, unless they drive. So having a property near MRT usually commands a higher price than those further away.
If you already own a property, question you can ask yourself:
• Is your property near any public transport, if not MRT?
It's all about convenience.
Future Development
Tengah District - HDB
Acquiring a property that commands more room for developments may not just be good for your capital appreciation, but also potentially helps in your rental yield - not just in our example of Tengah residents, but also current Jurong residents - with upcoming demands in Jurong Innovation District, for example. If you'd like to learn more about the upcoming Tengah District, do check it out here.
If you already own a property, question you can ask yourself:
• Are there any upcoming developments that may help to position your property better?
An hour of planning can save you 10 hours of doing.
Top School Effect
AMO Residence - Google Map
A great thing about Singapore is that most neighbourhood estates has it's own educational centres nearby. However, it is also apparent that some of the schools are more popular than others, driving up demands for those who wants to stay near the school. Furthermore, great rental yield isn't the only advantage.
Learn more about why staying near good school is a great investment!
If you already own a property, question you can ask yourself:
• Are there any top schools nearby your property?
• If so, how many?
Education is the passport to the future, for tomorrow belongs to those who prepare for it today.
90% of all millionaires become so through owning real estate.
- Andrew Carnegie
Successful Investors
Upgraded to an undervalued 3 bedder private property and rented out my existing property after decoupling. Now I'm enjoying both potential capital appreciation in my newly-bought property and good rental yield from my existing property thanks to their advice!
Vina, 37
Following their 7-points checklists, we bought another property that we can fetch great rental yield. We can now plan to retire early with passive income.
Mr Koh, 42