Swap or Stay Put?
Updated: Apr 24, 2022
[Case Study 1] Do you know which projects have potential if you want to 'swap' your property now?
Hello Property Owners!
Firstly, we are deeply grateful that you take time to read this case study that we have prepared for you.
Secondly, all figures are taken from EdgeProp.sg, which are then cross referenced with Squarefoot.com & 99.co for the purpose of illustration, and calculations are simplified for easier understanding without inclusion of other possible costs.
As circumstances may differ for every individual owner, please contact us for a non-obligatory discussion should you require a more specific calculation.
Let us begin our case study by stating that we are using this specific unit #17-XX of Valley Park for our calculations.
Imagine you are the Owner of Valley Park #17-XX, you bought the unit on 1st February 1996 at $1,160,000 ($954 PSF) before the project was completed.
After holding on to the property for 14 years, you finally made the decision to sell this 2 bedroom unit in May 2010 at the price of $1,690,000 ($$1,389PSF).
$1,690,000 (Selling Price) - $1,160,000 (Purchase Price) = $530,000 (Profit)
You would have made a profit of $530,000 after holding on to the property for 14 years. The total ROI (Return On Investment) for 14 years is 45.69% which translates to 3.26% ROI per year.
45.69% ROI for 14 years
3.26% ROI per year
Assuming after selling your #17-XX 2 bedroom unit in Valley Park in May 2010, you decided to move on to purchase a resale 3 bedroom (1507sqft) unit in a neighbouring project Rivergate at $2,674,925 ($1,775PSF) in June 2010.
10 years later in 2020, the property is estimated to be worth $3,315,400 ($2200PSF) in the current market.
If you sell your Rivergate today,
$3,315,400 (Selling Price) - $2,674,925 (Purchase Price)
= $640,475 (Profit)
So in a span of 24 years, if you had bought Valley Park in 1996, you would have:
profited $530,000 from the sale of Valley Park
possibly profiting $640,475 if you were to sell Rivergate at the current market price
swapped from a 999-years leasehold to a freehold property
upgraded from a 2 bedder to a 3 bedder
Total amount of profits from 1996 to 2020 if you sell Rivergate:
$530,000 (Valley Park Profits) + $640,475 (Rivergate Profits)
If given the option to sell and upgrade in 2010 like what the Owner of #17-XX did,
will you do it?
What if you did not sell your Valley Park #17-XX unit in 2010 and hold on to the property till now?
What will be your property's potential?
A similar sized (1216 sqft) 2 bedder in Valley Park is currently transacted at an average of $1700PSF, which translates to $2,067,200.
$2,067,200 (Current Value) - $1,160,000 (Purchase Price in 1996)
= $907,200 (Profit)
Which move will you choose?
Swap your property or stay put for 24 years?
What are the pros and cons of swapping and staying put?
If you were to swap your property now, do you know what are the potential projects you can consider?