The most important things you should know before getting your own apartment as a single in Singapore

The COVID pandemic got me thinking about having my own space with the idea of having one room for sleeping, one for home office with the living room serving as my gaming space.

When the time came for me to get a place of my own, I found that I could not buy a Build-To-Order (BTO) HDB flat because I exceeded the ceiling cap. Therefore, I had to change my plan.

For context, single and middle class Singaporeans are limited in terms of housing option in Singapore. You are only allowed to buy a HDB flat at the age of 35, regardless if it is a BTO or resale. Then, there is also an income ceiling cap of $7,000/month for those who want to buy a BTO. There is the option of buying a private property such as condominiums but they unsustainable in terms of mortgages and other payable fees for someone like me.

So, given the constraint, buying a resale HDB flat was the next best option for me.

We have to remember this one thing. Buying a house is a huge commitment, and it is especially so with the high interest rates and inflation. Therefore, if you choose to buy a resale HDB flat as a single, the first few year could deplete your cash savings if you are not careful.

This is why you need to get your finances in order

And here is the breakdown to help you understand why.

House purchase

The first step in your house buying journey will see you spend an upwards of $1000 on buying something known as Option to Purchase (OTP), a legal document signed by the seller to reserve the flat for you. This amount is payable by cash only to the seller of the flat. The good news is that this is also part of the overall flat’s selling price. This is done after you and the seller agree on a purchase price (offer price).

If you like the flat, you can “exercise” the OTP and then pay the remaining $4000. By doing this, you and seller officially enters an agreement and you cannot back out. Similarly, this amount is payable by cash only.

After that, you will have to pay up to $200 worth of fees to HDB. The breakdown goes like this: $80 for HDB application and $120 for HDB valuation request.

In my case, I had some other bills, left over from the previous year, to pay and I was struggling with a budget deficit for 2022. Therefore, paying all those money was a huge struggle for me. A major re-evaluation of my expenses was required.

Depending on the valuation issued by HDB and the offer price you made, you might find yourself in the situation where the offer is higher than valuation. This means that you have to pay the difference to the seller with your own cash and not payable via other means. This is known as Cash-over-Valuation (COV) since the banks will only consider the valuation price when they prepare the mortgage loan package for you.

If you happen to make an offer that is lower than the valuation, it is to your benefit. Sadly, that wasn’t my case as I had a COV of $20,000.

It threw my plans into complete disarray. I simply didn’t have the additional cash to pay for that. As I found a unit that my family and I loved, the next step was clear. I had to borrow that $20,000 to supplement my existing cash stash, the latter of which is to pay for the 5% portion of the valuation price. But, I also consider myself lucky as there are stories of people paying COV of up to $50,000.

As for the remaining amount, your mortgage from the bank and your CPF will be used, making up 95% of the offer price (75% from mortgage, 20% from CPF). This is where you also need to consider if your CPF has sufficient funds to also pay the Stamp Duty (a type of property tax) and legal fees.

With all that said, there is also commissions to be paid to the property agent who you might have engaged to help you to handle the paperwork.

Given my experience and the state of the property market in 2023, I would recommend that buyers set aside about $80,000 in liquid cash to buy a resale flat. And, it is important to remember emergency funds are not and should not be part of that $80,000. So, if you intend to have an emergency fund of $50,000, you will need to save up nearly $130,000 in cash.

In hindsight, this is also probably why setting the legal age to buy a HDB flat as a single at 35 years old is a good thing. This gives you time to build up the savings.

But, if you like to buy a BTO, then you will need to keep your monthly salary below $7,000 up to the day you actually get the flat.

Renovations

Renovations do not come cheap either. If you have read Singapore news on renovation cost, you will find that homeowners pay up to $100,000 or more to create their forever home.

In my case, I decided to do some light renovation work as the unit was very well maintained by the previous owner. And my requirements were simple.

Oh boy, am I completely shocked by the amount of money I need to spend as well.

The first step was to replace the doors in my house. Depending on the material, the design, the type of locks, and the number of doors, the final cost can come out to be around $6,000 to $7,000. In my case, it was under $5,000 as the reseller gave me a bundle deal. And the best part was, my brother-in-law and sister were with me. They were equally shocked by the price tag.

I also went to looking for contractors to do electrical work as the existing electrical wiring and sockets were old and falling apart. The rough figure the contractor quoted me for a full house rewiring, socket and switch replacement and other electrical work is approximately $4000. And that’s excluding the installation of data ports and related network cables. A rough napkin calculation told me I need to set aside $6,000 for these two works.

And if you need house painting services, those can cost approximately $1,800 (or lower depending on the contractor).

With these costs, it actually got me to rethink whether I want to continue with other renovation work for 2023.

Furnishing

If you intend to enjoy your home, furnishing is important as well. This is something I’ve done only a basic research by browsing Ikea’s catalog. A quick napkin calculation for a 48-inch OLED TV, some Ikea shelves, a standing desk, chairs, a sofa and a bed can easily cost me up to $15,000.

And I have not even consider other things to buy such as kitchen appliances and kitchenware…

Conclusion

I hope you can understand now why you need to keep your debts low and have a good cash liquidity if you plan to get your own place. If you have not start saving money and have no intention of getting married, it is a good time to start saving and building your wealth now.

Quality

I care deeply about quality to a point where I don’t care about freebies. The thinking goes: if something can be given away for free, it means it cheaply produced without much thought to its impact on the world. So, why should I be part of the bandwagon?

But quality items don’t come cheap. Having money is important. But, money was never the primary motivator in my career.

And this is where quality comes into play again. Quality relationship at work. Quality time spent with supportive colleagues and friends. Shared quality mindset.

With that said, I will give back as much quality as I can humanly master because I feel good and happy being there. And don’t forget, it is a two way street. It is also dependent on the organisation (employer) to help me in achieving quality in life.

I’ve been busy

Several months has since passed since my last update. The pandemic has pretty much upended most of the things we know but life has to go on. Many of us are doing the best we can.

As for me, I’ve spent most of my time working away and I am happy most of the time.

And if you are wondering whether I still write… well… wonder no more. Lately, I’ve been more focus on writing technical stuff and I have just put up a new article describing an IoT project that I’ve been working on for the past month or so. You can read that here.

I have also gone deeper into playing with LEGO. I just got myself a Mindstorms Robot Inventor set recently for SG$500 and I would love to get started building my own robots or machines to make my life simpler.

All in your head

Distraction.

It’s the thing that could destroy your productivity and send you down the rabbit hole of wasting time and achieving nothing. You will find yourself doing everything else but the one thing you need to be doing.

And you know what? The biggest problem isn’t with distraction. It’s not that video game. Not that Netflix show. Not that book. Rather, it’s you. You are the problem. You choose to play that video game, watch that show or read that book.

So why did you make that choice?

Is it because you lack the discipline?

Or maybe be that the thing you should be doing doesn’t have a strong enough draw to pull you away? Maybe it’s not as important as you think it is? And don’t kid yourself and be all defensive. After all, if it’s important, then why aren’t you doing those things? Why are you allowing yourself to be distracted?

It’s also a conversation that I’m having with myself every now and then.

As much as I like to think I have the discipline to work from home, it’s a lie perpetrated by me on me. The truth is being distracted is a recurring theme. There were so many projects that I want to do but ended up not doing them. I went with playing video games, stopped thinking like a writer and stopped thinking like a designer.

I even told my friends that I couldn’t find the time or concentrate on my stuff at home and needed to work outside. There’s just too many distracting stuff.

One of them said, “it’s all in your head”.

I won’t say I’m surprised. From what I have learned so far, it’s the truth. And the only truth when it comes to productivity.

And that’s a great reminder on who’s really in control.

No one else can make you concentrate or focus. You are the one who decide whether you can concentrate and do the work. Everything else that you say or fight against is just you finding an excuse.

What if you really think that your home has a ton of distractions and you can’t prevent yourself from utilising those distractions? Then go out there and find an environment to work in that allow you to focus. Otherwise, remove all those items in your house that distracts you. Move those distracting things, be it television, your internet router/access points, etc. to a storage unit. Smash them to pieces if you need to. You can always buy a new one later. It’s all about creating that environment you need to work.

And watch what you say to yourself. A lot of times, many of the comments or complains you make are just you being fancy and refuse to do the work. So shut up, and make a plan and execute.

Lack of experiences kill your creativity

It’s very easy for us humans to fall into the trap of sticking to what’s familiar. We like it because of how it make us feel. Comfortable is the word to use here. After all, who likes to struggle every day of their life?

I definitely don’t. But I recognised that it had crept up on me. I grew comfortable with what I’m doing with my life that my blog is suffering from lack of content. Comfort leads to writer’s block and that leads to no content created.

So being comfortable is bad.

Right?

Probably…

By allowing yourself to grow very comfortable and remain status quo, it’s very easy for you to find you are unable to think out of the box or come up with new solutions fast enough. It’s just a fact. Similar to how you keep doing the same set of exercises and your body has grown used to it, comfort leads to strengthening of existing neural connections that you have already established, and after a while the brain stops doing that because there’s no more necessary changes to the signalling.

Don’t get me wrong. There’s nothing wrong with being comfortable. Comfortable sometimes could be you have reached the pinnacle of whatever skill you are developing. That means you could do that thing faster than before.

However, the key here is moderation.

New challenges and experiences forces the brain to create new connections and reshape existing ones. And when you keep doing that, the brain is constantly changing and reinforcing certain connections that ultimately results in its ability to come up with new ideas. This is where you can think out of the box when the time comes. If you keep practicing doing that, it can also make you more confident as a person when it comes to dealing with new problems as they come.

For those who are neurotic, constantly worrying about stuff or have low self-esteem, they would probably go like, “Are you crazy? Take on new challenges? I’d rather kill myself.”

I know. I can relate. It’s very difficult to get yourself to experience new things. Personally, I have this issue because of my innate desire for stability and consistency in life. I’ve lost count of how many times I need to will myself to do something different just so that I expand my knowledge and experience.

This is why you won’t see me asking someone to do something drastic just to increase or revive your creativity. For example, there is no need for you to jump out of a perfectly good airplane just so you can jumpstart your creativity. You won’t see me doing that either.

Yet, it’s not good either to leave the “lack of experience, can’t create” situation unresolved. Not if you want to grow any further.

Instead, what you probably could do is find and know where is your comfort zone. Then ask yourself if you are willing to go out of your comfort zone by just one or two steps. If you do, then do it. And if you do manage to go out of your comfort zone by three to ten steps, then it’s even better. If not, then it’s better that you don’t complain about your situation and just live with it.

And you know what?

Sometimes, the new experience can come from simply changing up where you stand or sit when you are riding the train to work or to go back home. Or having a drink at your local coffee shop. Or maybe just take a different route to go to your usual places.