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Asset progression
Asset progression
What is asset progression plan? Asset progression commonly refers to the growth of one's wealth or assets. In property context, an asset progression plan refers to a strategy that will grow your property portfolio, usually from one property to multiple properties.
Who is it for: Anyone that has the capacity to buy or invest in property.
Why: Properties generally have lower risk than stocks or crypto, it is relatively finite and has utility, availability of financing and leverage, and a stable environment with transparent data, regulations, policies and robust planning. [see Top reasons why real estate is a good investment choice]
Where does it apply to: Generally residential properties as a start and as most would need one for own stay, then to commercial or overseas properties.
When: As early as possible to leverage on growth over time, like most saving or investment plan.
How: By buying with careful planning and progressing to more properties. Example of the various stages.
Property asset progression stages:
Property asset progression stages:
Stage 1a: BTO, for those who are eligible, otherwise refer to Stage 1b.
Affordability - bigger could be a stretch for young couples. TDSR, LTV, financing planning and risk analysis.
Suitability - balancing needs with growth potential.
Growth potential - location, micro and macro factors affect the potential.
Next stage 1b.
Stage 1b: Executive Condominium (EC) or private condominium (condo).
Affordability - financial sustainability considering expenses or TDSR and reserve funds.
Suitability - family needs if kids come along.
Growth potential - URA master planning for future developments, and present developments in estate.
Stage 2: to second property, usually private residential by realizing on the capital appreciation of the property before and invest in two properties.
Affordability/ Financing - TDSR, LTV, ABSD, financing planning and risk analysis.
Stage 3: continue to upgrade, invest or cash-out:
Upgrade both properties to bigger units.
Cash out and invest or enjoy the proceeds.
Invest in a third or more properties.
Invest in commercial or overseas properties.
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