Recently I found an interesting read in Lauren Templeton and Scott Phillips’ Investing the Templeton Way.
In fact, John Templeton’s principle of value investing can be perfectly applied in property investment.
His many great ideas in the book made me rethink what I had done when I was building my property portfolio in the past few years — there’s simply too much room for improvement!
For instance, Templeton’s definition of a good bargain is “an asset selling at an 80 percent discount to its value”.
I was targeting only 15 percent below the last transacted price during phase one of my property purchases. Oops, I must work harder next time to find “real” good buys.
To buy when others are despondontly selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest ultimate rewards.
100 percent agree! But it works only if you have a sound mind, understand what’s the true value of an asset, whether it is under/over-valued, is it the right time to buy/sell, etc.
The best bargain hunters do not need confirmation from a multitude of others … you must be independent-minded and capable of relying on your own judgment.
Experienced investors know this best. They don’t have to ask around for opinions for reassurance. Afterall, they make money for not following the crowd.
Some of my favourite quotes are listed below:
Those who still resist the idea of selling “too soon” must realise that if you hold on to your stocks as they rise above their estimated worth, you are joining a game of speculation and have left the sphere of investing.
The most successful investors are defined by their actions in a bear market, not a bull market.
The time to reflect on your investing methods is when you are most successful, not when you are making the most mistakes.
Hi there,
Luv the blog name “property for the soul” and the articles you had put up.
Have written this before I saw your Investing the Templeton Way so thought I jus go ahead to post
Your emotional attachment to the 1st prop, quote from E – Delayed gratification etc … somehow reflects my own journey through it.
My 1st prop was a HDB followed by private and “missed enblocs” .
Must be at least 10 . Thomson Apt, Sarkies, Balmoral, Surrey, Sophia etc,
Just could not convince my other half to see the latent value of those old potential enblocs viewed. R Koyashi had a quote on this
My 1st private prop went enbloc 15 years after I have sold it – Pastoral View
Currently own 4 properties – 3 privates and a HDB.
One of those guys in MBT’s radar.
2 privates & the HDB are paid up.
Would not sell the HDB though … with the new rules implemented.
I am comfortable with the rental income and have a “overpaid paid” job till now.
Really stress out with the job now ..
In your last post, you had liquidated and enjoying the fruits of labour now.
I am in a dilemma now. Thought of doing the same but …. am really undecided.
The properties are well located (Novena / Tanjong Pagar) and to sell them @ currently value of $1500 psf, it would be very difficult to find a replacement unit.
I know what goes up must come down but it seems $1500 is threshold
The yield are also “good” based on my own methodology of calculation.
C PLACE Market Value: 950000 RENT : 2600
MCST 190
L F TOTAL MAINT 1000
CASH 27750 27750 55500 INS 80
CPF 175000 295128 470128
TOTAL 202750 322878 525628
Acc Int 42814 42873 13666
Grand Total 539294.328
Nett Rent 27840
Yield (MV) 3%
Absolute Y 5%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees / maint ($1K) / Ins
P16 Market Value: 850000 RENT : 2800
MCST 230
L F TOTAL MAINT 1000
CASH 27750 27750 55500 INS 80
CPF 119856 93427 213283
TOTAL 147606 121177 268783
Acc Int 15959 7880 6988
Grand Total 275771.358
Nett Rent 29760
Yield (MV) 4%
Absolute Y 11%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees/ maint ($1K) / Ins
PASIR RIS Market Value: 400000 RENT : 1800
MCST 816
L F TOTAL MAINT 1000
CASH 23500 23500 INS 80
CPF 223996 223996
TOTAL 0 247496 247496
Acc Int 63649 6435
Grand Total 253931
Nett Rent 10728
Yield (MV) 3%
Absolute Y 4%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees/ maint ($1K) / Ins
How would you based your calculation of yield ?
The annual rental income minus expenses / current market value or
Absolute yield –
Annual Rental Income minus expenses / Amount of CPF plus cash used
I am more inclined to absolute yield.
The yield for C Place will be higher as present rental expired Sep.
Going rent now is $3200 – 3500
One more thing – How do you convince someone about good debts and bad debts …
My other half is always asking me to paid up.
But why should I ? It affects the absolute yield.
Moreover loan interest in lower than CPF rate.
Hopefully you can share your thoughts
Btw are you real estate agent
Hi there,
Luv the blog name “property for the soul” and the articles you had put up.
Have written this before I saw your Investing the Templeton Way so thought I jus go ahead to post
Your emotional attachment to the 1st prop, quote from E – Delayed gratification etc … somehow reflects my own journey through it.
My 1st prop was a HDB followed by private and “missed enblocs” .
Must be at least 10 . Thomson Apt, Sarkies, Balmoral, Surrey, Sophia etc,
Just could not convince my other half to see the latent value of those old potential enblocs viewed. R Koyashi had a quote on this
My 1st private prop went enbloc 15 years after I have sold it – Pastoral View
Currently own 4 properties – 3 privates and a HDB.
One of those guys in MBT’s radar.
2 privates & the HDB are paid up.
Would not sell the HDB though … with the new rules implemented.
I am comfortable with the rental income and have a “overpaid paid” job till now.
Really stress out with the job now ..
In your last post, you had liquidated and enjoying the fruits of labour now.
I am in a dilemma now. Thought of doing the same but …. am really undecided.
The properties are well located (Novena / Tanjong Pagar) and to sell them @ currently value of $1500 psf, it would be very difficult to find a replacement unit.
I know what goes up must come down but it seems $1500 is threshold
The yield are also “good” based on my own methodology of calculation.
C PLACE Market Value: 950000 RENT : 2600
MCST 190
L F TOTAL MAINT 1000
CASH 27750 27750 55500 INS 80
CPF 175000 295128 470128
TOTAL 202750 322878 525628
Acc Int 42814 42873 13666
Grand Total 539294.328
Nett Rent 27840
Yield (MV) 3%
Absolute Y 5%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees / maint ($1K) / Ins
P16 Market Value: 850000 RENT : 2800
MCST 230
L F TOTAL MAINT 1000
CASH 27750 27750 55500 INS 80
CPF 119856 93427 213283
TOTAL 147606 121177 268783
Acc Int 15959 7880 6988
Grand Total 275771.358
Nett Rent 29760
Yield (MV) 4%
Absolute Y 11%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees/ maint ($1K) / Ins
PASIR RIS Market Value: 400000 RENT : 1800
MCST 816
L F TOTAL MAINT 1000
CASH 23500 23500 INS 80
CPF 223996 223996
TOTAL 0 247496 247496
Acc Int 63649 6435
Grand Total 253931
Nett Rent 10728
Yield (MV) 3%
Absolute Y 4%
Nett Rental = Rental per mth x 12 minus Conservancy MSCT Fees/ maint ($1K) / Ins
How would you based your calculation of yield ?
The annual rental income minus expenses / current market value or
Absolute yield –
Annual Rental Income minus expenses / Amount of CPF plus cash used
I am more inclined to absolute yield.
The yield for C Place will be higher as present rental expired Sep.
Going rent now is $3200 – 3500
One more thing – How do you convince someone about good debts and bad debts …
My other half is always asking me to paid up.
But why should I ? It affects the absolute yield.
Moreover loan interest in lower than CPF rate.
Hopefully you can share your thoughts
Btw are you real estate agent
Thanks for your post.
I like to use the following way to calculate rental return of investment properties:
(monthly rental – mortgage – property tax – maintenance – agent commission) / initial investment (20% deposit + stamp duty + legal fee + reno, etc.)
With every new tenancy, I add up all repair and extra costs to my initial investment. But I haven’t accounted for higher personal tax with my rental income, interest charged by CPF for sum withdrawn, etc.
Investors often try to pay a minimum initial sum in order to maximize the return and spare the cash (or risk) in other investments. But when increased interest rate affects your return, you have to prepare to pay off the loan or sell your investment.
I sold my properties because I find other investments with better returns, more upside potential and less work to upkeep. I also want to free up my resources to buy again at the next downturn.
Different investors adopt different strategies. There is no right or wrong.
I know investors with a long list of properties in their portfolio. They keep all for rental return for their retirement.
I can afford to take risks at this stage of my life. For properties, I am expecting more rounds of “buy low sell high” in my lifetime.
I used to share an apartment with flatmates in Novena for four years. We almost rented a unit at Pastoral View. The place we finally rented had also gone en-bloc .
P.S. I am too laid back to be a property agent. Fortunately, I have an excellent agent who helps me a lot in my properties.
Thanks for the sharing.
Can you share your insights on the UK, French & the many distressed US property sales that are currently flooding market besides currency risk ?
Would be great If you can share your other investments with more upside potential and less work to upkeep. Hate it currently when the tenant move out … damage repairs/ upkeep, viewing etc
I think the questions to ask are: Who’s going to pay for the debts? Is there a new leader who’s finally coming up with a turnaround strategy? If distressed properties really show good potential and value-for-money, why would anyone bother to market them overseas?
You know those property workshops only talk about owning properties with zero money down, or how to own xxx properties in an incredibly short period of time. They never mention about the hassle of managing your own properties, don’t they?
Private residential property prices in Singapore rose 2.2% in Q1 this year. During the same period, gold was up 5% (or 12% so far) and silver 30%. Or, you can do nothing with your cash and keep SGD or Chinese renminbi in the bank. These currencies still go up more than 2% against the USD so far.
So, are we missing something here?
Thanks for your post.
I like to use the following way to calculate rental return of investment properties:
(monthly rental – mortgage – property tax – maintenance – agent commission) / initial investment (20% deposit + stamp duty + legal fee + reno, etc.)
With every new tenancy, I add up all repair and extra costs to my initial investment. But I haven’t accounted for higher personal tax with my rental income, interest charged by CPF for sum withdrawn, etc.
Investors often try to pay a minimum initial sum in order to maximize the return and spare the cash (or risk) in other investments. But when increased interest rate affects your return, you have to prepare to pay off the loan or sell your investment.
I sold my properties because I find other investments with better returns, more upside potential and less work to upkeep. I also want to free up my resources to buy again at the next downturn.
Different investors adopt different strategies. There is no right or wrong.
I know investors with a long list of properties in their portfolio. They keep all for rental return for their retirement.
I can afford to take risks at this stage of my life. For properties, I am expecting more rounds of “buy low sell high” in my lifetime.
I used to share an apartment with flatmates in Novena for four years. We almost rented a unit at Pastoral View. The place we finally rented had also gone en-bloc .
P.S. I am too laid back to be a property agent. Fortunately, I have an excellent agent who helps me a lot in my properties.
Thanks for the sharing.
Can you share your insights on the UK, French & the many distressed US property sales that are currently flooding market besides currency risk ?
Would be great If you can share your other investments with more upside potential and less work to upkeep. Hate it currently when the tenant move out … damage repairs/ upkeep, viewing etc
I think the questions to ask are: Who’s going to pay for the debts? Is there a new leader who’s finally coming up with a turnaround strategy? If distressed properties really show good potential and value-for-money, why would anyone bother to market them overseas?
You know those property workshops only talk about owning properties with zero money down, or how to own xxx properties in an incredibly short period of time. They never mention about the hassle of managing your own properties, don’t they?
Private residential property prices in Singapore rose 2.2% in Q1 this year. During the same period, gold was up 5% (or 12% so far) and silver 30%. Or, you can do nothing with your cash and keep SGD or Chinese renminbi in the bank. These currencies still go up more than 2% against the USD so far.
So, are we missing something here?
I believe getting funding is a problem with buyers over there. Asians are the “new rich”.
To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest ultimate rewards.
The most successful investors are defined by their actions in a bear market, not a bull market.
With PIGS and MENA unresolved, the question is the timing.
You seems quite diversified … attended any of those forex / commodities seminar ?
If you did, are they any good ?
Felt cheated after attending one of those “Owning properties with zero money down, or how to own xxx properties in an incredibly short period of time”.Thought I missed out something that I did not know … money down the drain.
I believe getting funding is a problem with buyers over there. Asians are the “new rich”.
To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest ultimate rewards.
The most successful investors are defined by their actions in a bear market, not a bull market.
With PIGS and MENA unresolved, the question is the timing.
You seems quite diversified … attended any of those forex / commodities seminar ?
If you did, are they any good ?
Felt cheated after attending one of those “Owning properties with zero money down, or how to own xxx properties in an incredibly short period of time”.Thought I missed out something that I did not know … money down the drain.
I am not a trader and have no interest in daytime trading. What’s the point of spending so much time benefiting the pocket of the middleman? : )
I know I can only make money from buying undervalued assets (like Singapore properties in 2002-2006) and wait for their prices to appreciate.
Agree. Those people organizing the courses most likely earn more money from the courses than from investing.
I like to follow the comments of some famous global economists and independent analysts.
I am not a trader and have no interest in daytime trading. What’s the point of spending so much time benefiting the pocket of the middleman? : )
I know I can only make money from buying undervalued assets (like Singapore properties in 2002-2006) and wait for their prices to appreciate.
Agree. Those people organizing the courses most likely earn more money from the courses than from investing.
I like to follow the comments of some famous global economists and independent analysts.