How to Take Advantage of a Deferred Payment Scheme in Singapore
Deferred payment scheme Singapore allows property developers to attract more investors and homeowners to continue to buy private property now than wait until later. 20% of the deposit is due upfront, and then the remainder 80% is due in 8 weeks or no later than three years later. OUE Twin Peaks and Marina Collection, both luxury condo for sale, have recently begun offering these attractive schemes.
Here’s how the deferred payment scheme in Singapore works.
Put Off Payments
OUE Twin Peaks offers potential buyers a way to leverage on the deferred payment plan in Singapore to allow consumers to put TDSR aside for the time being. It involves a 20-to-80 ratio of money you put towards the purchase of private property.
The most prominent deferred payment scheme lets buyers put a 20 percent down payment on a property now. The buyers collect keys after paying $1k and ready to move in or lease it immediately. The buyers then have two to three years to come up with the other 80 percent of the purchase price. Upon completion, buyers get the deed and title to the property or held by the bank if under a mortgage.
Marina Collection, with stunning waterfront views, has a similar option with to OUE Twin Peaks three-year deferred payment scheme. However any payments three years after the contract date that void the contract to buy. Under standard purchase term, buyers put 10 percent down, pay another 10 percent 14 days later by exercising this option with the developer. Upon payment of the ABSD 14 days later, you get your keys and move into your condo.
In the three years deferred payment scheme, after you exercise the option, pay 20% deposit, and the rest of the payment is due not later than three years. Only after you make full payment, you receive the title and deed. The idea behind deferred payment schemes is to get units sold and occupied faster to avoid any penalty result of qualifying certificate or ABSD. Hence that would also mean this windows period is going to be short, grab hold of this rare opportunities before it is gone.
There are several caveats to the deferred payment scheme in Singapore. The premium price of these luxury condos in OUE Twin Peaks and Marina Collection are much higher than you would pay without the deferred payments.
For OUE Twin Peaks & Marina Collection, developers add 5 percent on top of the listed price on each luxury condo unit under the deferred payment scheme. If a luxury condo priced at $2 million, factor another 5 percent will raise the price to $2.1 million.
You also pay the penalty if you cannot come through the payments within three years The buyer forfeits 20 percent of the purchase price and severe legal implication. Because of the turnaround times on payments, the deferred payment scheme is not for everyone.
Do the Math
The people who benefit most from the plan are smart investors who recognise the lower risk and potential in these luxury condos. Collecting rent from tenants allows the owner to get a better return on investment as compared to saving in the bank for just a little interest.
Let’s do an example of how this works. Suppose a luxury condo in OUE Twin Peaks has a purchase price of $1.5 million. The 20 percent payment due is $300,000. Before three years, you need to come up with 80% of the purchase price $1.2 million (Exclude the additional 5%).
If you rent out your luxury condo for $3,300 per month, the return on your investment comes out at 13 percent in a year. After three years, that’s a 39 percent return on your investment. That’s why deferred payments are so attractive to investors. The rate of return is higher than other investments, plus you can use the rents to help pay the remaining balance due. The potential return is so good that is why so many investors are buying into OUE Twin Peaks.
Seek Sound Advice
Seek the sound advice and counsel of an experienced real estate sales person such as Dylan Tan. He can show you what you need to buy a luxury condo under the deferred payment scheme in Singapore.
This scheme helps defer the impact of your TDSR, which means you might be able to afford a larger condo than you expect. Because of cooling measures in place, the effects of fees and debt ratios are areas of major concerns for investors and property owners. If you invest wisely, the deferred payment scheme in Singapore might even eliminate the TDSR entirely, which is part of the reason why there are three-year deferments.
For more creative financing options, talk to Dylan, and he can discuss your situation privately. He knows the regulations and the math needed to take advantage of this opportunity.
Dylan is familiar with both luxury condo properties and works to help you to multiply your wealth and makes your money work many times harder. He can arrange a viewing then go through initial paperwork to get your finances organised and go over the sale contract with you before you sign the final papers.