We are thinking of buying a new property.
But I felt uneasy with the commitment in the legal fee, stamp duties and etc.
What is the purpose?
The purpose is to generate passive income through Rental. What is the yield? Given a 1 million dollars property, the rental yield is 3.5k per month or 42K per year or 4.2%. But wait minus the loan repayment with the assume you borrow 80% of the 1 mil, you are paying about 2.5K back to the bank per month. That reduces your return on investment by almost half.
Of course the bet is the upside capital appreciation of the property which can fetch big gains.
Given the sum of money which we have to pour into paying the up front payment and waiting for the property to TOP, $200k is not touch.
Of course the property is freehold - good investment with good rental otential.
I deceided to call off the deal, went for a good lunch, save the legal and stamp duties.
I deceided to put the sum intended for the property into forex investment, which conservatively I can yeild 2% per month or at least 12% per year!
I fel no peace with the property deal, which I submit to the Lord in prayer earlier this week. Let my heart rest for the moment while I get ready again on the purchase look out in 2015.
Lord Thank you. amen.
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