It’s a rite of passage to think about or at least dream of owning your own property, especially when you’re single and reaching 35 – the age when you will be able to purchase a HDB flat under the Single Singapore Citizen Scheme. We have written extensively about the different purchase expenses you need to deal with and bridging home loans and there’s also a ton of literature out there to help you understand other vocabulary involved in purchasing a property.
In spite of that, it’s also worth hearing straight from the horse’s mouth what it takes to have a place to call your own in Singapore as a single buyer.
We talk to two singles to cull critical tips for first-time homebuyers based on their experience in purchasing private and BTO properties: Carrie Soh, 37, owner of a one-bedroom condominium unit in Siglap with 30 years on its 99-year lease priced at $890,000 and Shawn Tan, 43, owner of a two-room BTO flat for singles in Punggol that he paid $127,000 for.
1. On savings: put aside at least 30% of your monthly salary towards housing as early as possible
Carrie: If you want to get a condo by 30 years old, you should already start saving by the time you graduate from school. If you can save 50 percent of your salary, that’s superb, but if not, 30 percent is a great way to start. If you only start saving in your thirties, you may be able to get a condo in five years, but you will only be able to get a small unit, like a studio unit and somewhere out in Changi.
If you want to get a condo unit, you need to know what costs you can keep low when you start living there. Imagine this – every month, a huge chunk of your salary already goes to the mortgage and you still have to think of the management fees you have to pay for condos, which I pay about $700 or so each quarter, not to mention the standard costs like utilities. If you’re living by your own for the first time, observe your utility bills for the first three months and see which other areas in your life you can keep spending down.
Shawn: You should start saving 30% of your salary when you’re 25 years old but I admit that I’m a spendthrift! It’s quite easy now for singles to be able to afford a two-room flat if they start saving early. If you’re planning to get singles housing, you can even just start with saving $500 a month.
2. On renovation: be vigilant about your meetings with the contractor
Carrie: If you have to go down a few times a week to check on things, you better do it. If you go down only after work and at night, there isn’t electricity because they cut it off to renovate so you don’t see things in detail like flooring. I have a friend who was on all fours checking every crack on her flooring and putting Post-It notes on each cracked or scratched tile. By the time she got up, there were about 60 or so Post-It Notes.
Your contractor is also obligated to be there every time you want to meet him, even if several times a week. Don’t be shy to ask your contractor to re-do something at no extra cost. You have every right to ask them to change faulty tiles or fixtures and they can’t charge you extra for it.
3. On renovation spending: you need both a cap and a buffer
Carrie: Almost everyone I spoke to about renovation said one should have a limit on renovation spending, but you need to give yourself a buffer especially if you’re a first time homeowner and don’t know how much things cost. My buffer was that if I spent more on renovation along the way, I can’t buy certain appliances or furniture, so that’s how I played around with it. Decide where you want the bulk of your buffer to lie.
But always keep some cash. Don’t spend it all on your home and don’t touch your emergency funds. If you have to live with less-than-ideal renovation, do so, especially if this isn’t going to be your last home.
Be prepared to reorganise your lifestyle depending on the type of housing you get
Carrie: Start with your basics like dining chairs, table, sofa and build your furnishings along the way. If you see yourself still living there five to ten years later, you don’t have to buy all ten shelves at one go. For example, I still don’t have a shoe cabinet because I don’t want to spend the money. It’s more important to still be able to put money in emergency funds and buy the rest of your furniture later on.
Shawn: To be honest, a two-room BTO doesn’t give you so much room to play with. You have to focus on the things you really want, like certain centerpieces. For example, I have over 200 bottles of perfume! So I definitely need to make a custom wardrobe with at least six doors to also fit my clothes and sixteen bags, which will probably cost me about $4,000. I will also have to roll my clothes up to fit into the space. How you organize your space and things you currently have needs some rethinking in the case of a small singles’ flat.
4. On loan repayments: Assess the costs of your single lifestyle and how your loan repayments can fit into it
Shawn: I would really advise singles to assess what’s important to them and their expectations for their future when considering the type of housing to go for. I thought about my housing options for many years. I realised that if I bought a resale flat, I would be very burdened with the repayments and wouldn’t be able to enjoy the things I liked anymore, like shopping or travelling regularly. Because I place more importance on other things, a house then becomes just a roof over my head so I didn’t go for a resale. Instead, I waited and chose to go for a singles’ flat when the option came up and took up a 25-year loan.
Carrie: I took a 35-year loan and it is daunting, but I get over by thinking of its possible appreciation down the road. I’ve also already started to save up for my second property. The idea of housing as an investment is a good thing to keep in mind, but personally, I feel that for your first home, it’s good to just enjoy the place and find somewhere nice you want to stay instead of obsessing over the potential investment value.
5. On when to make a purchase: Start small and only when your finances are considered to be very stable
Carrie: I have seen it myself: people buy a swanky property but they can’t afford the monthly repayments. There is absolutely nothing wrong with starting small and moving up to a bigger space. You can use a HDB flat as a stepping stone before moving up to a condo. A lot of things can happen – you can lose your job, there could be cooling measures that affect the sale of your place and so on, so having a small place to start off is good and prudent.
Shawn: I have friends who bought a big house but the economy took a dive and they had huge loans to pay off which became a huge burden for them. Buy a house only when you are very, very financially stable, which means that even if you do not have a job or you lose your job, you can still finance your loan for at least two years.
6. There’s really nothing like having your own place
Carrie: I would advise singles to buy an apartment of their own. For a person who is alone in this world, having a home – and my home – that I can go back to and no man can kick me out of, is a safe haven for me. Even if my partner breaks up with me, it’s fine because I have my own place. I would urge singles, even if they are attached and especially if they are ladies, to have a property listed under their own name if they can afford it. At the end of the day, if anything happens, you have your own home to go back to.