Your search results

A Beginner’s Guide to Homebuying: How to Choose the Perfect Property

Posted by Jayson Ang on May 20, 2023

| 0

TLDR

When considering property investments, understanding your motives is crucial. Factors like accessibility to amenities, remaining lease, transaction history, rentability, rental yield, and layout play significant roles in decision-making. Proximity to MRT stations can impact rentability but doesn’t always guarantee higher returns. Assessing amenities within a kilometer radius is essential, considering both benefits and drawbacks. Beware of lease decay in older properties and review transaction histories for insights. Rental yield calculations involve net yields and various expenses. Lastly, the layout of a property should align with current trends for optimal value. Understanding these factors can guide you towards making informed decisions in the real estate market.

Properties that appear to have it all – located near an MRT station, close to top-notch schools, in the heart of Singapore with all the conveniences – even freehold – often don’t bring as much value as you’d expect.

When it comes to property investment, location can seem like a major factor – but it isn’t that simple. It takes a sharp eye to really appreciate a property’s potential; someone could look at a dilapidated building in a Geylang alleyway and see the hidden value, while someone else might have all the facts and figures at their disposal, yet still make subpar choices.

If you are just starting to explore the possibility of buying a home, here are a few fundamental concepts that you need to be aware of.

Although knowledge of these basics will not make you an expert, they can help you begin your journey down the path of homeownership.

What You Need From A Property Depends On Your Motives For Purchasing It – That’s The ‘Right’ One For You

Prior to starting to browse through the various properties, it is important that you have a clear idea of your purpose.

Those properties that may be an excellent investment could be completely wrong for somebody looking to purchase a home.

For instance, an individual hoping to make their home there may not appreciate living in a busy integrated development with a shopping center, even though it could potentially bring in high returns.

Are you in search of true homeownership, need to downsize, or planning to upgrade from a flat to a private condo for investment purposes such as capital gains and rental income?

The qualities you emphasize depend on your purpose for buying a house. Homeowners aren’t as worried about rental yield as they’re not planning to rent it, while those planning to move in five years may overlook certain features, like being in an area with fewer connections, if the price is projected to rise in the near future.

Knowing what you’re looking for in a property is the first step to making the right choice. When searching, it’s important to consider factors such as accessibility, amenities and disamenities, remaining lease, transaction history, rentability and rental yield.

1. Accessibility

Although the proximity of a property to an MRT station could potentially lead to better returns, this is not always the case. Long before these stations are opened, developers often have time to anticipate and account for this change. Therefore, the impact of an MRT station on rental yields can be unpredictable.

Investing in properties near MRT stations not only boosts rentability, but it also increases the chance of finding tenants quickly and for longer leases, since accessibility is not an issue. Plus, there’s a bigger pool of potential buyers, which makes it easier to find the right one – though it may not necessarily bring higher returns considering you had to pay a premium for it.

Given that owning a car is becoming more costly (check out Budget 2023 on taxes on cars and the wild COE prices), living near an MRT station can help you save money. The maximum distance that most healthy adults would feel comfortable walking is one kilometre – a 10 to 13 minute walk. Beyond this distance would be considered too far from the MRT.

As a homeowner, don’t forget to consider any children or mobility-impaired family members when making your decision. The five-minute walk to the MRT might not be feasible for them. Moreover, remember that the convenience of a location on a map isn’t necessarily accurate – Google Maps can’t account for inclines or unsafe pathways, which can drastically increase the time it takes to travel.

2. The Pros And Cons Of Amenities

Within a kilometre, search for the essential stores like groceries, clinics and malls, plus schools, offices (especially business parks or tech hubs), entertainment spots such as cinemas and sports complexes, and take a leisurely stroll in the parks, park connectors or nature walks!

The greater number of the above facilities you can find within a kilometer radius, the more appealing a location is. But, here’s something you may not be aware of: they can be either beneficial or detrimental to an area. Places of worship, hospitals, airports, nightlife, malls, offices and schools – these are the sites to pay attention to if you wish to make an informed decision.

The Ola EC, located in front of Sengkang General Hospital, presents a unique dilemma for potential homeowners: while it is close to a healthcare provider, ambulance sirens at night may be a concern, and from a Fengshui perspective, the entrance of the morgue should not be faced.

All of this, coupled with the potential for increased noise and traffic congestion, can make this a tough decision for some – after all, amenities such as offices nearby are not always beneficial if you don’t work or rent them out.

3. Balance Lease

Due to the potential risks associated with older leasehold properties, new investors should avoid them. Though some investors may be tempted to take advantage of the low purchase price of a decaying lease, their strategy of hoping to rent at close to market value is high risk and provides no easy way to exit should things go wrong. For a safer option, look for leasehold properties that are no older than 30 years.

When it comes to buying a home, if you purchase one with a high level of lease decay, your options later on may be more limited, for instance, if your retirement savings take a dip, you may not have the ability to downsize. To truly grasp the difference between leasehold and freehold properties, I suggest you take a look at my earlier articles.

4. Transaction Volume History

By reviewing the transaction history of the property, you can get an idea of what to anticipate regarding a reasonable cost and potential returns.

Additionally, it is beneficial to compare the transaction history of the property with neighbouring units within a one kilometre radius to better understand its performance.

If you need to obtain information about a certain caveat lodged with the URA, it can be a difficult task to sort through the data – don’t worry, though, I am here to help!

Generally, you’d want to find out the transaction flow, such as if there are any units consistently being transacted each month, or if there are any years with no transactions at all – contact me directly and I’ll provide you with the information you need.

Source: Square Foot Research

If you’re looking to purchase a unit in a boutique condo with only a few units in 2023, and the last transaction was in 2019, you’d want to be careful when assessing the value of the unit.

To feel more secure, it’s beneficial to have many transactions occurring around the same price as yours, instead of setting a new, record-breaking high for the development.

5. Rentability And Rental Yield

The ability to easily secure tenants is referred to as rentability, while rental yield is the ratio of a property’s annual income to its cost. Although related, these two metrics are distinct. To calculate the gross rental yield, simply divide the annual rental income by the total cost of the property and multiply by 100.

In Singapore, net rental yield for condos is typically between two to three per cent for most units, or 3% to 4% for more compact units (510 sq. ft. or less), calculated by subtracting recurring expenses (e.g. property tax, maintenance fees, and utility bills) from the rental income and adding one-off costs such as stamp duties, legal fees, and renovation to the total cost of the property.

On average, net rental yields range from 1% to 2% or even 2% to 3% for compact units – a result of the present rental market’s peak. However, these remarkable yields likely won’t be sustained in the long run.

If you find something that rivals this, you could be on to a real winner! But remember, the higher the yield, the lower the value – this could be due to a decaying lease, a less than desirable location or limited amenities, all of which affect rentability.

For maximum rentability, do your research and consider the following:
Past vacancies – have there been long, unexplained gaps in occupancy?
High volume of short-term leases – this might indicate that tenants view the property as transient and expect to haggle on rent.
Incidents of tenants breaking leases due to issues with the development – are these issues still present?

Doing research on a property’s rentability can be a tedious task, so it’s a good idea to enlist the help of a knowledgeable real estate agent!

6. Layout

No matter how perfect the location, tenure, and facilities of a home may be, if the layout isn’t up to par, it can really be a deal-breaker. After all, the layout is the part of the home where you will be spending the majority of your time.

If you’re trying to determine what the current living trends are, keep in mind that there was a time when 2-bedroom units of 1,000 square feet were considered desirable, often coming with yards and utility.

But these days, there’s less need for such a large space, meaning it might be harder to sell despite the lower price-per-square-foot. When considering what to look out for, think about these factors.

When making a decision regarding your property, it’s important to take into account certain key elements such as the layout’s efficiency, possible renovations, dual key units, the functional vs open space ratio, and the long-term suitability.

If you’re looking for more help, join me on my blog for an in-depth exploration of the latest developments.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Buying Tips Opinion Selling Tips

Is It Wise to Make a Partial Prepayment on Your Home Loan in 2024? Here’s How to Make Your Decision

Jayson Ang – November 13, 2025 –

TLDR Partial prepayment of your home loan means paying off a chunk of your mortgage early to lower future monthly...

All Opinion

Unseen Dangers of Putting Your Money in Upscale Freehold Properties in Singapore

Jayson Ang – February 17, 2024 –

TLDR Luxury freehold properties in Singapore may not always be the lucrative investment opportunities they appear to be. High-end properties...

All Blog Posts Opinion

Unlock the Potential of Your Home: 5 Reasons to Start Selling Now

Jayson Ang – June 6, 2023 –

TLDR When considering selling your home, several key indicators can help you determine if it's the right time to make...

All Buying Tips

Tips for Young Adults to Begin Saving for Their Future Home

Jayson Ang – August 5, 2023 –

TLDR When aiming to purchase a home, it is crucial to gain knowledge about the buying process and track your...

All Buying Tips Opinion Selling Tips

Are Resale HDBs Really Unaffordable In 2025?

Jayson Ang – September 28, 2025 –

TLDR Singapore’s housing debate is fueled by headlines about million-dollar flats, but most resale 4-room flats in over 10 estates...

Mandarin Top 5

Top 5 : Exploring the Streets of Singapore – A Journey Beyond Just Shopping!

Jayson Ang – February 11, 2025 –

Singapore, a vibrant city-state known for its diverse culture and rich history, offers a plethora of unique experiences that go...

Mandarin Top 5

Top 5 Tea Rooms in Singapore for High Tea

Jayson Ang – July 16, 2024 –

Singapore, a melting pot of diverse cultures and culinary delights, offers an exquisite high tea experience that caters to both...

All Buying Tips

Is 2024 the Perfect Moment to Refinance Your Home Loan? Discover What Homeowners Should Consider!

Jayson Ang – July 20, 2024 –

TLDR The article covers the shift to SORA for home loan rates, urging consideration of refinancing options amidst rising rates....

All Blog Posts Buying Tips Opinion

UNCOVERING the Secret to Profitable Small Boutique Condos!

Jayson Ang – November 30, 2024 –

TLDR Boutique condos, with fewer than 100 units, are known for price fluctuations due to infrequent transactions and higher upkeep...

All Opinion

Why Can’t We Have More Housing Options For Singles?

Jayson Ang – April 5, 2024 –

TLDR The blog post discusses the evolving regulations for single individuals to purchase public housing in Singapore. It highlights the...

Mandarin Top 5

5 Factors : Why Singapore’s Property Market Is A Good Hedge Against Inflation

Jayson Ang – May 26, 2024 –

As inflation becomes a growing concern for investors worldwide, the stability of Singapore's property market has become an attractive option...

All Selling Tips

Would It Be More Better To Engage One Property Agent Or Multiple Agents In The Selling Process?

Jayson Ang – August 3, 2023 –

TLDR When planning to sell your property, you have the option to work with one agent exclusively or non-exclusively. Engaging...

All Buying Tips

Purchasing Older HDB Resale Flats: Key Considerations When the Flat Outlives You

Jayson Ang – January 10, 2026 –

TLDR HDB flats have a 99-year lease, and key housing schemes require the lease to cover the youngest owner until...

All Buying Tips Opinion

What’s A Fair Price For An HDB Flat in 2025? A Savvy Buyer’s Guide

Jayson Ang – November 5, 2025 –

TLDR There’s no single “fair” price for HDB resale flats—what’s fair depends on your needs, motivation, and timing. To navigate...

All Buying Tips

7 Essential Tips for Finding Your Perfect Retirement Home

Jayson Ang – October 27, 2024 –

TLDR Searching for a forever home should balance heart and practicality. Avoid homes with stairs, high cabinets, big kitchens, and...

All Buying Tips Opinion Selling Tips

Navigating the 2025 Singapore Property Market: Why Informed Buyers Can Stay Confident

Jayson Ang – July 9, 2025 –

TLDR Despite global economic uncertainties, Singapore’s property market remains resilient due to robust financial regulations, conservative loan assessments, and effective...

Mandarin Top 5

5 Factors : The Benefits Of Investing In A Property With Good Access To Green Spaces In Singapore

Jayson Ang – June 30, 2024 –

Real estate investment has always been considered a sound investment decision, as it offers long-term growth potential and a reliable...

All Buying Tips Opinion Selling Tips

Why Singapore Families Are Opting for Two-Bedroom Homes in 2025

Jayson Ang – March 24, 2026 –

TLDR By 2025, Singapore families are increasingly choosing two-bedroom condos as practical long-term homes rather than temporary stepping stones. This...