In the country of, most of the properties have only a 99-year lease, but that surely does not diminish the demand for older houses. Some people are indeed more interested in them. You could compare the older properties in Singapore to wine or cheese; they get finer and finer as they age. Here is precisely what you should look out for when purchasing any kind of property over 20 years old.
– If you are purchasing a property to rent it out to someone else. Once a property has reached the age of 40 years, it’s resale value surely drops. Banks will reduce financing to 60% of the property value, and the buyers will also be faced with a bigger down payment. Besides, simple affordability lowering the price, buyers will surely demand that they get discounts since the maintenance costs are higher for older homes. Once the property reaches 60-70 years of age, loans are also not exactly possible, and buyers will also be unable to use their CPF monies to purchase the property. Tenants don’t exactly care how much time is on the lease, and rental incomes fall faster than a rusted door handle.
– All of this means that the clock is surely ticking and you will have limited time to recoup the cost of the investment. If you are uncertain, crunch some of the numbers with a wealth manager and get a professional to determine if it is a good fit for your portfolio at all.
– Most importantly, it is essential that you check the condition of all of the facilities before you purchase. Condo management councils will widely vary in terms of competence. Some can even keep a pool in pristine condition for more than 30-40 years. Make sure that old fixtures have been rid of and the fixtures are all replaced to be new again. When it comes to homeowners, you have to check if all the things meet your demands and comfort levels as well. For investors, you have to consider how much a tenant is ready to pay for that property, even to rent.
– Check how far the property is from traffic and make sure that there isn’t too much noise. You should also see if there are enough parking spaces. Old properties tend to be in areas that are mature, and they also have loads of amenities. The area with the most kinds of amenities also tends to draw more people.
– You should also know about how long it has been since the property has been refurbished or renovated. Get a sense of the whole property and make additions wherever necessary.