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- Nov 24, 2008
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LKY also famously used similar logic. Actually both of you are wrong. The right comparison is not renting vs buying but what you do with the capital you have, which you can always invest instead of buying residence.
So you should compare:
1) Buying property: No need pay rental but got to pay mortgage, maintenance, legal fees etc
versus
2) Investing capital in other non-property assets but need to pay rental etc.
Compare your expected net returns for (1) vs (2) and see which one is better.
For SGreans retiring overseas, you should always hedge your risks and keep a SG property (even if its just HDB 2room) in case things dun work out and you hv to come back to SG.
Things don't work, u go to another country or another city. U don't go back to singapore, the most expensive city in Asia.
The right comparison is renting vs buying. If you want to talk about what you want to do with the capital you have in terms of investment return, well guess what, real estate is still the best return you can get on your capital. In terms of leveraging your capital, property value appreciation, combined capital gains/income return, real estate is still the best bet in the world. You can use your capital to invest in the stock market, but that's like gambling, especially if you are a small investor. Regarding expected returns, no one knows. The only sure expected return is to park it in a deposit instrument where u know your interest received every year, but those interest u receive is pathetic.