5 Common Myths of HDB Flat Ownership

1. Renovating your flat before selling will give a net profit Although renovating your flat before selling generally helps boost the value of it – properties that look new and clean are easier to sell - spending too much on it will make it a negative expected value (-EV) decision. When you renovate to sell, only choose a no-frills renovation focused on cleaning up minor but easily observable flaws, paying more attention to the kitchen and bathroom areas. This is not the time to hack down walls or install new furniture and appliances, as the future owners’ tastes and preference will likely differ from yours. For a professional advice in touching up your property for selling, contact a professional interior design company. (* Expected Value is a mathematical concept that when applied to this context, lets you know if the average return per dollar you invest in the renovation will be greater or lesser than a dollar. A -EV situation would mean that for every dollar you spend on renovation, you will generally see a less than one dollar increase in the sale price due to renovation.)

2. It is not possible to pay housing loan instalments solely with CPF

Almost 80% of BTO homeowners pay nothing in cash for their monthly loan instalments, and are able to fully utilize their CPF account. When you are setting a budget for a first-time property purchase, a good rule of thumb is to ensure that your monthly loan repayment will be under a quart