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How to choose the right property, 3 simple steps and questions to consider:

1. Evaluating your needs, objectives and capacity

Needs: why do you need to make a purchase right now? Upgrade, finding a matrimonial home, family needs, or investment, are some of the many factors to consider carefully before jumping in, a property is a big ticket item.

Objectives: are there investment goals and is this part of your asset accumulation? how would your property sit in your overall asset portfolio?

Capacity: how much do you plan to spend and leverage if any? what is your risk appetite and risk strategy?

Timeframe: where are you at in the real estate cycle and how long do you plan to hold, enter and exit? Additionally, the type of loan package will also impact returns and payments.

2. Identifying opportunities and potential upside.

Macro factors: Property cycle has its ups and downs, so does supply and demand data, inventory data etc. While timing the market is tough. But starting soon with the right leverage and strategy can avoid a bad purchase.

Micro factors: Evaluate the development. Starting from a high level URA master plan, location, accessibility, size, amenities, facilities and surrounding environment, to unit layout, condition, orientation, design and price trends in conjunction with price trends to plan a good entry and exit.

3. Take action.

Research, plan and get feedback. Map your your finances, timeline, shortlist properties, discuss with key stakeholders and get feedback from seasoned realtors, investors and other experienced professionals.

For example, the right mortgage matters. Evaluate loan packages from different banks and their terms and conditions. Every 1% increment on a $1 million loan for 30 years increases the monthly payment by around $500. Mortgage claw-back clause, early repayment or prepayment penalty for a home loan redemption (can range from 0.75% to 1.5% of the loan amount) are some of the "hidden" costs and will affect your finances besides loan amount, CPF usage, loan packages and debt ratio, just to name a few.