In the first 2 weeks of the month, we were busy with moving to our rental 3-bedroom apartment. There was so much stuff that we had in our previous 2-bedroom apartment that we stayed in for 7 years. The packing and unpacking of boxes took a long time because we also had to buy new furniture to store some of the items. By the time we could go shopping for these furniture, it was just before CNY so their delivery took longer than expected. Since we didn’t do much visiting this CNY, we had more time to deal with other issues that came up when moving into the new place. Such as defects with the kitchen and toilets that needed to be fixed.

By the 3rd week, we were more settled into our rental 3-bedroom apartment and we received news that the sale of our previous 2-bedroom apartment was progressing. So we resumed our property viewings as we are still searching for a property to buy that we can renovate to our tastes and preferences. A place that can be our family home for a long time. After all, we don’t plan to rent past 2 years and it was only meant to hold our family for the time being until we find a more permanent home. Since we are still working from home quite a bit, we can actually go for property viewings on weekdays. Which allows us to squeeze in more property viewings every week.

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It’s not easy finding a place that meets our requirements. There’s always some kind of trade-off between price, location, condition and timing. The more we are willing to pay for the property, the trade-off is lower but the impact to our finances is bigger. In terms of cash drain and liquidation of investments. We don’t want to set ourselves back financially by purchasing a property that stretches our finances to the limit. Even if both of us can continue to work and draw salary income from our jobs, it would be stressful to handle a large monthly mortgage payment along with the maintenance costs. And we can’t save or invest as much.

But we have to acknowledge the allure of buying a nice property for our family to stay in. And we find ourselves expanding the budget as we view more properties. It’s a difficult balance to manage between being objective about what we can reasonably afford and being subjective about what we want that is less affordable. While we are building up our property knowledge with more viewings, we also keep changing our minds as new information flows in. Anyway, we still have less than 2 years to make up our minds and just have to be patient with our property search.

We are moving out from our current 2 bedroom apartment into a rental 3 bedroom apartment this week. It’s an older development but is more conveniently located in terms of access to amenities, transport and school. The main reason for choosing to rent instead of buy a bigger property is to give ourselves more time to consider where we would like to stay and what kind of property we want to buy next. At that time, my wife’s bank was undergoing a major restructuring and we were not sure whether she would still have a job at the end of it. Luckily for us, she did secure a role.

We didn’t want to get trapped into a timing issue where we can’t sell our 2 bedroom apartment fast enough before buying a bigger property. We have outgrown the smaller property and need more space now. Any complications with the 2 separate sale and purchase legs of the transactions may have caused us to incur Additional Buyer’s Stamp Duty (ABSD). Or worse, cause our family to move out with no place to stay in. While I’m sure my parents-in-law would be happy to host us at their place, it would not be an ideal living situation.

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It doesn’t help that our 2 bedroom apartment is not easy to sell in the current market. We renovated the property before moving in so it’s a nice place to stay in. But the location is not the best. It’s near a feeder bus-stop that gets you to the train station. But it’s not readily accessible to amenities and schools. You may need a car to get around more easily. We went through a number of viewings over the past 3 months but could only get 1 offer. It’s not much higher than our original purchase price and will not cover our stamp duty, conveyancing, interest and renovation costs. If we try to hold out for a higher offer, we will incur both mortgage and rental expenses for some time. With no certainty that we can actually secure a higher offer.

We considering renting out the 2 bedroom apartment but decided against it. We are not keen on being landlords (even in Singapore) and just don’t want to deal with the hassle of managing tenants. Anyway, we will most likely proceed to accept the offer. It was already a stressful time negotiating the sale price and terms of the sale. Not something we would want to repeat if we can help it. If we can successfully sell our current property, it would better position us for the purchase of our next property. Since we are renting for 2 years, we have more time to work out where we would like to stay and what kind we property we want to buy. It’s important not to rush this and take our time with such a major financial and life decision.

We took leave and celebrated our son’s birthday over the last few days with both of our families separately. He got toys and ang baos as his birthday gifts and we also took him for a family photoshoot. We even managed to squeeze some time out to drop by our friend’s place for dinner and poker night. But we are wiped out and just resting at home now to recover. Went out for lunch and groceries shopping just now in the afternoon. May even go to my parents-in-law’s place for dinner tonight. Not sure why our schedules got so much more packed once we had a kid but that’s the way it is.

As we were finalising the terms of the tenancy agreement with the real estate agent, we were impressed with how he handled the negotiations on the rental property between us and the landlords. Even though he represented the landlords, I felt he treated us fairly and was open & honest with his communications to us. Hence, we are considering engaging him to either sell or rent out our current property. We had an initial discussion on the various approaches we can take but it comes down to this crucial decision point. Do we want to be landlords?

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If we do, we can decouple so that one of us holds the smaller property to lease out for rental income. While the other buys the bigger property for the family to stay in. If we don’t, we can sell the smaller property and jointly buy an even bigger property for the family to stay in. Since my wife earns more than me, which name to hold the bigger property in matters because it affects the size of the loan that can be taken. It’s a difficult decision. At this point, I’m leaning towards for us to be landlords and getting the rental income on the smaller property. But my wife is leaning towards not to be landlords and just selling the smaller property.

There are so many pros and cons to this that it can be tough to do a proper cost benefit analysis of both options. I guess it comes down to what matters to us. While I would prefer to have the rental income, I understand that being a landlord comes with its own set of challenges and frustrations. Especially when you get stuck with a bad tenant on a 2 year lease agreement. It takes a lot to kick them out and they could have done a lot of damage to the property by then. Or worse, be late on their rent and even not pay it. It could work if you get a good tenant but that would involve a higher level of scrutiny during the profile screening process.

My wife is not keen on dealing with the inconveniences. I can understand her point of view. When you are working hard and earning more, the last thing you want is to deal with such problems just to receive some rental income on the side. Which can’t even cover the monthly mortgage payments on the property. All that hassle with so little reward. With the current rate of minimal property price growth, we are also not getting much capital gain from holding onto the property. We are going to think about this more before we decide on anything. It’s a big decision after all.