Where to start on your property investment

My previous article on property, about selling one to buy two, got pretty popular. So today, I’m going to follow it up with a deeper look into how and where to start researching into your investment property. This will be based on my discussions with my property agents, aligned with our overall strategy and combining multiple upside potential considerations.

In fact, we applied much of the same thought process to both our residential property, as well as the investment property. Our best case scenario at the planning stage was for a double en-bloc jackpot.

Property is a patience game

It is important to note that with property, you have to be prepared for a long game. With that in mind, you have to look at how the government intends to develop, or redevelop the piece of land or the area in general, and how that might affect the population make-up in the area.

What considerations are there?

Location

As an investment property, you will want it to be either centrally located, or near work clusters and amenities where people will rent to be near their workplace or a mall.

Area Masterplan

You can take a look at the URA website for masterplans over the next 10 – 15 years in terms of area development. As we were discussing our plans for the investment property, we knew we wanted a place that was already tenanted (for a hassle free takeover), and to be in or very near a zone where there will be redevelopment in the future to bring up prices.

We were also looking at condos near the 10 year mark, so that there will be potential en bloc opportunities a few years down the road.

In the end, we settled with Geylang. My property advisor has an awesome post detailing how to use the masterplans to plan your move.

Why Geylang?

City Fringe

We looked at Geylang cos it was a stone’s throw from CBD, a quick 10 to 15 minutes away. This makes it attractive from both convenience and economic factors, as it is not expensive, yet centrally located to go anywhere easily.

Paya Lebar Airbase Redevelopment

The entire Paya Lebar and Geylang area will be re-zoned. There will be a lot more commercial buildings and less residential areas, pushing up prices for existing condos. It is highly likely that the red light district will be moved out completely.

Paya Lebar Airbase will be moved out, and the area redeveloped. This means there will be opportunities to build up higher. New residential buildings in the area and more amenities will push up prices on existing condos.

En bloc potential

Developers will be keen to look at older buildings ripe for collective sale to acquire and build upwards to get more bang for their buck as they come in to redevelop the area.

Our overall thesis is, even if there were no collective sale to cash out on, there should be sufficient capital appreciation, and demand for rental yield over the long term.

Residential Property

We took pretty much the same steps for our residential property as well. Some points we considered:

Loyang MRT Station (2029)

Right at our doorstep! In fact, they might be taking some of our land within the condo to build the MRT station. Once completed, it will bring about a much better connectivity to other parts of the island.

Changi Airport / Jewel / T5

There will be further development at the Changi area to turn it into a work-live-play enclave. Here’s what the URA says about developing the Changi area.

Located at the doorstep of the future Terminal 5, there could be new offices, smart work centres, flexible conference rooms and halls, hotels and serviced apartments, set amidst lushly landscaped public spaces within the new Changi East Urban District.

En bloc potential

Loyang Valley was built in 1985. It is a 99 year leasehold property, and is fast approaching the 40 year mark. It is ripe for en bloc in the next property cycle.

Space

This last factor was purely for personal. We just love the huge spaces of an old condo. With 2 young boys in tow, we wanted a big enough space for the boys to roll around in, and to grow up among nature. So even if capital was merely preserved with no upside, no regrets here.

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I hope this helps you in your property hunt!