What to Look Out for When Choosing Property
From Financial Literacy Wiki
What to Look Out for When Choosing Property
There are many factors that one should look out for when choosing property. Below is a list of them.
Price
Price definitely plays a large part in a property purchases. As purchasing a property is a huge commitment, one should survey the market to determine what is the fair value of the property you are interested in so that you do not over commit yourself. You can look for price information of recently transacted properties in databases of real estate companies and the Urban Renewal Authority (URA).
Location
"Location, location and location" is a common saying we heard whenever we ask someone how to choose a property. Locations that are well served by transport and amenities such as, recreational facilities, shopping centres and food centres are always in hot demands thus they are more expensive compared to properties that are in new built-up areas.
The value of the property is also affected by neighboring properties. A property that is surrounded by industrial worksites or dilapidated houses would command a lower price compared to a property that is surrounded by parks, or high-rank schools. Avoid buying properties that are near carparks, major roads, expressways, areas that create pollution or potentially dangerous.
Physical Condition
It is of utmost importance that you inspect the physical condition of a property thoroughly before purchasing it. You should check that the property is in good physical condition and ensure that no major renovation or maintenance work is required. You might look out for signs of termite infestation, cracks or leaks on the wall, or flooring.
The older the flats, the more detailed and stringent the check should be. For new properties, it is difficult to know their physical condition until they are ready for occupation. The only protection the property buyer can seek against defect is the reputation of developer.
Length of Lease
Leasehold properties have an expiration date of ownership. This means that the land on which the property is build will revert back to the state when the lease expire. Because of this reason, the CPF board does not allow its members to use their CPF funds to purchase properties with less than 60 years of lease remaining. Similar to the practice of CPF, the banks are also not willing to finance properties with short lease. Please check with your representative on this issues.
Even if one is to purchase a leasehold properties with a slightly longer lease, say 68-year. It would be difficult for him to sell the flat later since other potential owners may encounter similar problems.
Because of this, the longer the lease, the higher the premium demanded.
Orientation
Properties located on the upper floor of a high rise building definitely command a higher premium then those at the lower floor. This is because of the commanding view of the neighborhood it can offer, the fresh air and also the absence of insects such as mosquitoes and flies. But avoid the highest floor as it tends to get very warm from the afternoon sun. Furthermore, water tanks are built at the top of the building thus there might be seepages.
As heat from the sun tends to linger, avoid flats that have windows facing the east-west direction. Such flats invites the most sunlight into the house and cause the property to be warm even till night time.
Size and Shape
Obviously, the larger the size of the property, the higher the price it can command. As land is scarce in Singapore, the larger the plot of land the property resides on, the higher the price of such property. Some properties are L-shaped or rectangular shaped. Each shape will appeal to different buyers. Properties with wide frontage are also preferred to those with narrow frontage as the latter tends to be stuffy because of poor air circulation.
