What is property planning and why is it important?

Today, I will write about the benefits of using property as a form of investment and how you can achieve financial gain from it.

Let's start with the basics:

Phase 1: Getting the BTO

For every young adult, getting your first job will mean that you are learning to be financially independent. This is the around the time when you are in the age of 22 to 25yrs old.

Astute young adults often plan to have their own home and will firstly apply for the BTO (Built to Order) HDB flats with their partners. When applying for the BTO flat, they would enjoy government CPF housing grants of up to $120,000. (for more specific details, DM me and I can explain more)

Phase 2: Selling their BTO

After fulfilling the 5 years Minimum Occupation Period, this young couple would now be ready to upgrade to the next property. Case in point, I have a client who bought the 4 room BTO at Tampines Greenridges and sold it recently. I have helped them to upgrade to a bigger property using the proceeds generated from the sales.

The high sales proceeds was possible because the BTO price was low, further supported by CPF housing grants and a high selling price.

Phase 3: Getting a Private property

Due to the high sales proceeds received, it is easy for this couple to make a 5% cash down payment to buy a private property. In this phase of their lives, they have young children and look forward to better lifestyle with facilities, thus upgrading to a condominium.

Enjoying the privileges of condominium living, they are able to grow their property value even without investing in huge renovation costs if they know how to select the right property.

Phase 4: Upgrading

Another 5 years have passed where their children would be older, requiring a bigger space, hence they will need to upgrade to a bigger unit. At 32 to 35years old, they are more established in their careers and have started taking on managerial roles, therefore enjoying a higher income. With their increased income, and proceeds generated from 2nd property sales, they will have the opportunity to buy a bigger condominium unit or even jump straight to a landed Terrace House.

Some couples may even get 2 private properties so as to earn rental income Some others may start investing in commercial property. (There are many ways to increase your networth and grow your base, DM me for a detailed planning discussion)

Phase 5: Planning for retirement

Once they reach the age of 45 to 50 years old, they would need to plan for retirement. At this juncture, they have to handle the tertiary education costs for children, personal health costs, elderly parents maintenance costs and more. E.g. If they are seeking a second career, they may also need to buffer some expenses. I have seen people who left their corporate jobs or were retrenched during this phase. As a result, some started their own business at this age.

Hence, in times of need, having a valuable property does help because you can have an option to sell and downgrade. The cash proceeds generated from the sales will help you tide over these crucial times.

For people who are more blessed financially, they can actually leverage and grow their net worth higher moving from a Terrace house to a Semi Detached house. (DM me to find out more details on how to do that)

Growing your networth is very important in your productive years. Hence, when you are earning a high income, you must choose a safe asset class like property to guard and grow your wealth. Throughout history, the rich people used property as a way to grow wealth and leave a legacy.

What Can you do now?        

For people who are already in the pre retirement age phase of life, you are at the critical point where you either make or break it. You get to live comfortably during retirement if you know how to plan properly. (DM me for clear guidance on how to turn things around)

For young people who are at the start of your careers, learn from successful seniors who have already gained wealth from their property investments. Learn to listen with humility so you make lesser mistakes when choosing the right property. Seek professional advice and not hearsay from relatives and friends who may have good intentions but lack competence. (DM me for valuable advice to propel you ahead) I have a proven track record of helping my clients grow and they were previously standing exactly where you are right now.

With that, I shall #hear from you soon!

Disclaimers: Property planning is dynamic and not a fixed path. At JN Consulting, we seek to address your needs and help you grow your networth by aligning your goals.

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