What is the theory behind RENTING vs BUYING A PROPERTY being equal 🔥 !

Is renting better than buying your own property? Most Singaporeans are home owners and renting always seems like a waste of money. Is that so? Let's discuss with actual numbers.

0:00 Introduction to this article in Business times

0:37 Case study if you have $700,000, how does it compare if you buy a $2m private property vs renting at $3,500/m

1:43 Property growth assumption of 2.2%pa
Property goes in long cycles but if you own only a home, you may actually be market neutral.
Estimated value of the $2m property in 60y is $7.2m. Net gain is $4.6m after running cost, loan and interest.

3:23 If you invest $700k into REITS and rent at $3,500/m.
Rental is expected to inflate at 1.8%pa
REIT growth rate at 3%pa and 4.5% dividend yield.
Portfolio will rise to $4m in value and generate $5.1m cash in dividend.
Net gain of $4.6m after $4.5m rent expense.
Video HOW TO USE SYFE REIT+ TO INVEST INTO THE BEST SINGAPORE REITS! - https://youtu.be/afJyEwFoFfk

6:05 My gut feeling on the assumptions and my calculations.
If we change the property growth rate at 2.5%, the new value will be $8.8m
If it is a freehold property then 60y may be ok but will it trade closer to land value if it is not maintained?

8:23 My biggest finding and thoughts
Could we end up with $53.6m by renting and investing (with reinvestment)?
Could we rent our HDB out and rent a condo to stay in?

Article - https://www.businesstimes.com.sg/opinion/renting-can-be-a-viable-alternative-to-owning-a-private-home-in-singapore

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Josh holds a degree in Accounting from NTU. In 2016, he co-founded the financial education website TheAstuteParent to provide detailed insurance plan analysis and financial planning tips.

As a ChFC Charterholder, Josh has agreed to be bounded by the ChFC®/S Code of Ethics. This includes, among others, acting in a professional manner when it comes to conducting due diligence on primary and secondary sources of investment-related data, and articulating his investment opinions based on his research and beliefs. Based on his research and analysis, he highlighted his beliefs and opinions, and illustrated the concept of time value of money, as of the time of the video.

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Видео What is the theory behind RENTING vs BUYING A PROPERTY being equal 🔥 ! канала Josh Tan - TheAstuteParent