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I often encounter clients reaching out to me for advise when their Singapore HDB flat approaches the minimum occupation period.
The MOP is usually 5 years for most HDB properties including Executive Condominiums. Until you have reached this MOP, you are obliged not to sell your property on the open market or rent out the entire unit.
Additionally, HDB property owners cannot buy private residential properties before reaching this MOP.
And so, a majority of them reach out to me when their HDB BTO flat is approaching the MOP and is concerned that their flat price will drop if they don’t let go of their flat quick enough.
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Please do not RUSH into it.UNDERSTAND YOUR NEEDS FIRST BEFORE WHAT YOU WANT
No clear-cut strategies once HDB flat MOP is up
At present, there are no clear-cut strategies on the best move homeowners can take once their property has passed the MOP.
It really depends on your personal goals. Some may consider their home an ideal location to live near their workplace, school or in proximity to loved ones.
Others may view their properties as assets or investments that will potentially provide steady rental income or substantial sale profits in the future.
In this article, I’ll provide insights on some of the popular options available to homeowners and some tips on how to determine the best option that fits your plans and current situations.
Continue staying in the HDB flat after MOP
Option 1
The first option is to remain an occupant in the flat; however it is advisable to check the degree of depreciation of your property value.
For Build-to-order (BTO) flats, it is usually between the first to third year after MOP where you can sell at a ‘premium’ price and obtain a higher profit.
The main reason, is the assumed good condition of the flat because it is still new and also of the longer balance lease of the flat, within this time-frame.
This is still on a case-by-case basis, please consult a realtor for more accurate facts and figures.
Buy a Private Property and rent out HDB flat
Option 2
The second most preferred option is to buy a private property and rent out either property.
In this instance, one must not forget the Additional Buyer Stamp Duty (ABSD) which is mandatory when homeowners buy a second property.
Be warned that if you have an existing outstanding housing loan when you buy the second property, you will only be entitled to 45% housing loan funding for your second property.
The main drawback of this option is that it requires strong financial capital to be feasible.
Sell your HDB and upgrade to a Private Property
Option 3
The third option is to sell your flat and upgrade to a private property.
You can choose to buy the second property before selling your HDB flat.
This strategy eliminates the need for temporary accommodations in between the buying and selling of your properties.
Again, do bear in mind the ABSD, and the possibility that you may be rushing for time to sell your existing home.
Applying for ABSD remission may be applicable to legally married couples who purchase a second residential property jointly, only if the remission conditions are met.
It is important to remember that the couple must consist of at least one Singapore Citizen and the property must be purchased specifically under both names of the couple.
It is also mandatory to sell your first residential property within 6 months after purchasing the second one.
More details can be found on Inland Revenue Authority of Singapore’s (IRAS) website (www.iras.gov.sg). Alternatively, you can consult your property agent on this.
Expanding on the latter option, it is also plausible to sell your HDB flat first and use your CPF returns or cash proceeds to buy a private property.
I wish to highlight that this is a delicate process where your property agent must meticulously plan for the smooth transition and ensure proper accommodation for homeowners.
Sell your HDB and buy 2 Private Properties
Option 4
Some homeowners can also consider the option of selling their HDB property to buy two private properties.
The key to this is proper financial calculation and planning. In short, the CPF amount and sale proceeds after selling the first HDB flat must be enough for both owners to make their individual purchases.
It is recommended for homeowners to buy a private property for their own accommodation while the second private property serves as an investment, either in the form of rental income or capital appreciation.
I will elaborate more on the ‘Sell One Buy Two’ tactic in one of my popular articles.
Do you know that HDB prices had increase more than 26% since 2020.
Let’s look at some genuine case studies:
Let’s look at how I helped my clients after their Hdb Mop (after their flats reach 5 years)
Case Study 1
Mr Ang has been staying in a 4 room flat in Punggol with his family.
One month before the property reaches MOP in 2017, Mr Ang contacted us to find out more about his options and in essence, I have gathered that their goals were to:
1) Invest in a property with potential appreciation as their main priority
2)Utilise a low-risk investment approach
3)Wait for the right opportunity
With the understanding that they do not require an immediate place to stay, I proceeded to work out both short-term and long-term plans for them.
With my recommendation, we sold the Punggol flat and went ahead to purchase a brand new 2-bedroom condo at Parc Riviera with Mrs Ang as the sole owner; at this point in time, we have not decided whether this property will be for own-stay after its TOP or for rental purposes.
Then in 2019, after going through detailed financial assessments and planning for Mr Ang, he also bought a 1-bedroom resale condo with an existing tenancy to generate immediate rental income.
Thereafter, with the good rental yields, the Angs decided to focus both properties for investments, reaching their final goal of low-risk investment and asset progression.
As a investor interested in taking advantage of the booming property market in Singapore, I needed a realtor with in-depth knowledge of the local market. Using his understanding of the various sectors of the market, Rick generated a investment progression report and we decided to buy a condominium in a choice area with huge potential for multiple returns in the future.
Thanks Rick, I will definitely be doing business with you for a long time!
Mr Tony
Buyer - Parc Riviera
Case Study 2
I met Mr and Mrs Chua in 2019. Their 4-room HDB flat in Kim Tian had passed MOP for a year and they were wondering about their next move.
I analysed and shared property transaction trends in their neighbourhood and together, we decided it was time to move on.
Their main priority is:
1)To stay closer to their parents and at the same time, nearer to the city.
Based on their requirements, I evaluated their personal finances and planned their property move such that they did not have to fork out any cash during the entire transaction period.
Eventually, the whole selling and buying transaction process was successfully completed within a month and with my guidance on proper timeline planning and coordination, they did not have to move to a temporary home in between.
“In short, Rick did an amazing job. He sold our house at a higher than initially discussed price and got us a good deal for our purchase. Both my wife and I are impressed with his professional yet friendly approach. We will definitely work with him again and recommend him to anyone.”
Eddie
Seller - Blk 127 Kim tian road
Conclusion
When it comes to buying or selling a home, planning and financial know-how are key to making it a smooth and stress-free process.
While you're busy trying to time the market, your friends might already be reaping the rewards of their investment profits.
Bonus for my readers
Don’t miss out on the opportunity to take advantage of the current market.
Schedule a consultation with me today and find out if it’s the right time to sell your home after MOP.
With just one click of the shiny “GET YOUR FREE CONSULTATION” button, you can access my top-notch consultation services and gain the knowledge and confidence you need to make informed choices about your property.
Don’t let your burning questions go unanswered – let me help you today!
Who should apply?
MOP owners who are considering selling their HDB flat after fulfilling the Minimum Occupation Period (MOP) of five years.
First-time homebuyers who are interested in purchasing an HDB flat in Singapore and want to learn more about the process of selling a flat after MOP.
Anyone interested in the Singapore property market and wants to learn more about the HDB flat resale market.
Awards and Accolades
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I have successfully helped hundreds of homeowners just like you since 2010
Property agent review - What my clients say about me
Mr Ang
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As a investor interested in taking advantage of the booming property market in Singapore, I needed a realtor with in-depth knowledge of the local market. Using his understanding of the various sectors of the market, Rick generated a investment progression report and we decided to buy a condominium in a choice area with huge potential for multiple returns in the future.Thanks Rick, I will definitely be doing business with you for a long time!
Ms Claire
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I am writing in to compliment Rick Huang for his invaluable service, for the sale of my Esparina Residences. The process was complicated but he was able to empathize with my situation and also provide brilliant advices that ensue the smooth transaction. In all, I am appreciative with his professionalism and human touch in this journey. Thank you!
Ms Ho
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I was sceptical about engaging a friend to sell our house. However, Rick has put himself out on so many levels just to ensure everything went smoothly, promptly and correctly at every stage. I trust Rick and would surely recommend him to anybody seeking to buy or sell a home! I do not usually post reviews but this is worth investing my time. Thanks once again..
Ms Malar
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His service is beyond my expectations. Always going the extra miles to serve his clients.
Ms Jo
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My husband and I started our home-search by ourselves but was met with issues soon enough as we were unsure of the important things and areas to look out for and we were also not experienced in the negotiation process with the seller’s representing agent. Soon after hearing our problems, I was introduced to Rick by a friend. The entire buying process quickly became swift and smooth; Rick understands our needs, puts our personal interest first, seals us a good deal and educated us along the way about the important things and areas to pay attention to. Thumbs up to Rick and we will recommend him to anyone for their home-search
Mr Eddie
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"In short, Rick did an amazing job. He sold our house at a higher than initially discussed price and got us a good deal for our purchase. Both my wife and I are impressed with his professional yet friendly approach. We will definitely work with him again and recommend him to anyone."
Mr Liew
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Rick is a very down to earth person. No hard sell or pushy technique. He helped us in planning for upgrade and showing us how to invest in property with in depth property analysis report.
Miss Chong
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His service is superb. With his property mkt analysis skill, I managed to purchase my first property in Singapore. He is always patient and helpful whenever I have any query about property purchase procedure, especially the computation part of the downpayment. In nutshell, I am really grateful and appreciate for his support.
Selvi
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Rick is an agent who has displayed his potential in his services. He provided us a very personalised guidance when we first approached him with an intention of purchasing a resale flat. With his knowledge and years of experience has made the entire purchasing process seamless. Thank you Rick for being a great friend and a fantastic agent!
Mr Mark
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Rick service has a very personal touch. He was extremely patient and professional and does not rush us into making any decisions he provided us with sound advice whenever we have questions and was always ready to provide help with regards to any matter. What impress us the most was the extra step he went by assisting us with the purchase of our new home, even though this was in no way his responsibility to do so. Thank you for the hassle free experience Rick. Highly recommended
Mr Shawn
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"It was a pleasure working with Rick throughout my selling and upgrading journey.His recommendations and knowledge of financial calculations and preparations are impressive - even factoring in risk management specific to us, for the next 5 to 8 years.He has shown his expertise in real estate and guided us step by step all the way, making transactions effortless for us.Well done Rick!
Ms Shufen
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Rick has been our go-to agent for our past few property transactionsHe actually patiently brought us to many various property viewings (I think it was more than 10!) before we finally settled on the Cairnhill unit.Rick also helped us iron out all the issues encountered along the way and we are very thankful for his service.Hence, we will continue to engage Rick for all our property related matters.We have encountered many agents throughout the years but Rick is the one that has the most profound display of professionalism, knowledge and dedication in his job.Please keep up the good work!"
Ms Meena
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Rick's guidance really helps us to sell our unit at a good rate. He did a excellent job giving us professional assistance from step by step till the keys are handed over to the new owner.
Mr Kingsley
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We have worked with a few property agents. We find the interests of the agent are not well aligned with either the buyers or sellers as volume of transactions matter more.With Rick, you can be assured that your interests are well protected at all times. It is reassuring that he shares his opnion objectively to allow home buyers or home seekers to evaluate the decisions for themselves.Overall a smooth experience. Thanks Rick!
Ms Su
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"Rick was introduced by a close friend of mine. This is my second time buying a flat (first time was 20 years ago) and I have forgotten all the procedure. With no experience dealing with selling and buying, this is my honest testimonial.Rick is a very responsible agent which I've met so far.Fast response to all my enquiries and he answered to all my doubts which I have.Reliable and he knows exactly what to do and will give you his utmost advise and service.I highly reckon Rick to those have the intention of getting property agent.Thanks so much Rick for the help and assistance you have rendered from start until the end of transaction. I would definitely recommend you to my relatives and friends. Cheers
Shah
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My wife and I are grateful that a friend of ours referred us to Rick to help sell our unit. Rick responded fast to all of our queries. In fact, we managed to sell off the unit faster than we expected thanks to Rick. He did not even need to resort to cheesy gimmicks and marketing. The journey was kept professional. Despite the toxic culture of the property industry, we can feel that he is sincere and committed in helping us. He is trustworthy and we felt that we were in safe hands with Rick as our agent.
Ms Sharon
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I had in the past dealt with agents who were pushy and did not do their homework. But with Rick, I am put at ease with someone who is not only very knowledgeable but understanding. He keeps my family posted on what we need to know, is very diplomatic, tactful and professional. If you need your place sold, you need a reliable person like Rick to help you. Thanks Rick once again. Warmest Regards, Sharon Lim
Mr Sri
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Rick was introduced to me by a friend, who has seen Rick while he was helping another client. Rick has played an exceptional role while I was buying a private property. He is patient, humble, polite and a nice human being. I highly recommend him if you are looking for an agent in your property hunting. I worked with several agents but he will be my go to agent for any future deals. It was excellent experience..!
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Self Introduction
Greetings! My name is Rick Long, and I am proud to serve as the Associate Division Director of Huttons Asia Pte Ltd, with over a decade of experience in the real estate industry.
My passion for helping clients find their dream homes has grown exponentially during my tenure in the field. As a graduate of Singapore Polytechnic, I have always valued the importance of hard work and determination.
My prior experience serving in the airforce instilled in me the value of teamwork, perseverance, and discipline.
Over the years, I have been privileged to receive several accolades for providing exceptional service and dedication to my clients.
My ultimate goal is to ensure that each individual I work with has the best possible experience, whether they are buying or selling a property.
One of the most rewarding aspects of my work is receiving glowing five-star reviews from satisfied clients.
Knowing that I have positively impacted someone’s life is truly humbling, and it motivates me to continue striving for excellence every day.
When I am not working, I enjoy spending quality time with my loved ones, indulging my passion for sports, and exploring the rich and diverse culinary landscape of Singapore.
Amidst the bustling pace of life, I relish moments of calm by immersing myself in the art of tea-brewing and teapot appreciation.
My commitment to delivering exceptional results to my clients is anchored on my extensive knowledge and experience in the real estate industry.
Above all, I always strive to be kind, respectful, and approachable.
Thank you for taking the time to learn a little more about me. I look forward to the opportunity of working with you.
Additionally, Rick is a proud fur daddy to two rescue kitties and loves spending his free time with his wife and furbabies. He believes in giving back to the community and volunteers his time to animal welfare causes whenever possible.
Related Articles:
Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)
Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)
Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)
Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)
Should you sell your EC after 5 years? – Read more (Selling EC)
