ASKING SEAN #257 | DON'T OVERPAY FOR OWNSTAY PROPERTY

Summary

In this episode of the Eung podcast, the host discusses a listener's dilemma about purchasing their first home. The couple, both 26, has a combined monthly income of 20,000 and liquid assets of 300,000. They are considering new properties priced between 700,000 to 900,000 with estimated monthly mortgage payments of 3,500. The host provides insights on affordability, considering future income, and the importance of not overpaying. He also addresses concerns about unseen communal areas in new developments and suggests visiting completed projects for a better understanding. The advice concludes with the '85% rule' for future resale value and the emotional significance of owning a home.

Takeaways

• 🏡 The podcast discusses a listener's dilemma about whether to buy a home now or wait, highlighting the importance of considering current and future financial situations.
• 💼 The listener, Howard, and his fiance are currently living rent-free in a relative's apartment, which provides a unique perspective on the urgency of buying a home.
• 💰 Howard and his fiance have a combined monthly income of $20,000 and liquid assets of $300,000, which is a strong financial position for first-time homebuyers.
• 🏘️ They are considering new launch properties priced between $700,000 to $900,000, with estimated monthly mortgage payments of $3,500.
• 🏢 Howard's industry is stable, and he anticipates a pay increase in the future, which could affect their affordability but is not factored into current calculations.
• 🏦 The podcast host suggests using the 'three times rule' to determine affordability, indicating that Howard's income should comfortably cover the mortgage payments.
• 📈 The host advises considering the '85% rule' to ensure that rental income from the property can cover at least 85% of the mortgage, providing a safety net for future financial changes.
• 🏗️ There is a discussion about the risks and benefits of buying new properties versus waiting for the right opportunity in the resale market, emphasizing the importance of market timing.
• 🌳 The host recommends visiting existing projects to understand common areas and facilities, which can help in making informed decisions about new properties.
• 💖 The emotional aspect of home ownership is acknowledged, with the host noting that owning a home can provide peace of mind and a sense of stability.
• 📈 The host concludes by encouraging Howard and his fiance to make an informed decision, considering their financial situation, future plans, and the emotional value of owning a home.

Q & A

What is the main topic of the podcast episode?

The main topic of the podcast episode is discussing a listener's email regarding their property predicament and seeking advice on whether to buy their first home.

What is the 'makeover Mania campaign' mentioned in the podcast?

The 'makeover Mania campaign' is a promotion introduced by the 'makeover guys', offering up to 10,000 ring in discounts or giveaways, which is the sponsor of the podcast episode.

What is the current living situation of the email sender, Howard?

Howard and his fiance are currently living in a rent-free apartment in Sri Klang, which belongs to a relative who is working overseas.

What are the financial details provided by Howard about his and his fiance's income and assets?

Howard and his fiance have a combined gross income of 20,000 per month, no debts except for the maintenance cost of the apartment, and a combined liquid asset of about 300,000.

What is the estimated monthly mortgage repayment Howard is considering for the new property?

The estimated monthly mortgage repayment Howard is considering is about 3,500.

What are the property price range and type Howard is considering for purchase?

Howard is considering new launch projects with sizes of 1,100 sq ft and above, with a price range of 700,000 to 900,000.

What concerns does Howard's fiance have about buying a new launch property?

Howard's fiance is concerned about aspects like the design of the corridors, lobbies, main lobby, refuse chamber, and facilities, which are hard to see until the property is completed.

What is the '85% rule' mentioned by the podcast host for assessing property affordability?

The '85% rule' is a guideline where the current rental rates in the area should be able to cover at least 85% of the monthly mortgage installment, ensuring a good exit plan if the property needs to be sold or rented in the future.

What advice does the podcast host give regarding buying a new project versus waiting for a subsale?

The host suggests considering the certainty and the current market conditions. If the new project offers good value and meets their needs, it might be a good option. However, if the market is not favorable, waiting for a subsale might be a better choice.

What is the podcast host's view on the importance of visiting existing projects when considering a new property purchase?

The host emphasizes the importance of visiting existing projects to understand what actual buyers are thinking and to get a better sense of the property's design, facilities, and overall experience, which can help in making a more informed decision.

What is the podcast host's final recommendation for Howard and his fiance regarding buying a home?

The host recommends that they should not overpay for a property and should consider the future upgrade plans. He also advises them to ensure that the rental rates can cover at least 85% of the mortgage installment for a good exit plan in the future.