Why I give Horizon Hill a miss ?

I had done some studies about Horizon Hill and almost want to ink the deal last weekend but now I decided to give it a miss, at least as for now.

It is a new launch at the Green Precinct. A whopping 35' x 80' size of 2 storey Cluster home. Cluster home is like a semi-detached house without backyard, that's how I name it. The built up area is 3,204 sqft, and land size is 2,800 sqft. Price is RM1,117,800. Beautiful home no doubt. I love the size and the layout.

The only reason I want to buy Horizon Hill landed residential is to enjoy the lifestyle of spacious green fields and also hope that my parents will stay closer to us rather than staying at Sarawak. I still hope AirAsia is going to launch a direct flight from Sibu to Singapore! So, this investment going to be self-stay, definitely not going for rental. For self-stay, of course it has to be renovated nicely with all the furnitures, that would come be RM150,000-RM200,000 easily based on the size of the house.

So, bear in minds, we have to pay monthly RM 200 for the security, and RM 150 for the facilities usage.

Many of us are able to afford such a home because Malaysia bank is happily giving you a 90% loan as long as you are not holding more than 2 properties in Malaysia (that are still under loan servicing). To buy such a beautiful home, all you need to put is a 10% downpayment, that's RM111,780 plus 3% stamp fees, which is RM 33,534 , total RM 145, 314= SGD 59,000 , we have to convert to Singapore dollars as 70% of the buyers are Singaporean, that's the majority crowds here and the rest of the 30%, most of them are also working in Singapore. So, literally, Horizon Hills are almost filled with people who work in Singapore... so, no doubt, you just need to pay SGD 59K and seal the deal, sound easy. Now, the nightmare comes.

90% loan.

Let's talk about 90% loan, let's just focus at the first 5 years interest, if you loan 90%, the interest is for only 5 years are whopping close to RM 200,000.
Even though you reduce the loan to 80%, 70% and 60%, the figure are:
80% - interest RM 175,000
70% - interest RM 155,000
60% - interest RM 135,000

For me, it is a self stay property, I don't have rental income of course, and these are the numebrs I must ready to fork out just for the interest. And guess what, the calculation above is using the best rate of 4.1% now, we all know BLR rate can rise and fall, but next chance is going to be UP .

So, if you are buying Horizon Hill for self-stay, take note on the big numbers, even though you are trying very hard to reduce the downpayment to 80%, the number is still RM 175,000 for the first 5 years. Maybe you want to sell the house , then, you also need to take note the real estate property gain tax in Malaysia. The thing is this, you can imagine the property price to shot up , but how much ? Remember, Horizon Hill prices had gone up almost double as 100%, what make you think it will go up another 100% easily. I heard many people said, real estate is an asset to hedge the inflation, but take this example, RM 1.1 mil + 0.2 mil (renovation) + 0.2 mil (interest) = RM 1.5 million after 5 years, my breakeven point is RM 1.5 million ! not to mention the small cost that you need to pay every month. Again, all these money is only for me to enjoy maximum during the weekend only. Because it is the weekend home. I am not going to drive in and out from JB to Singapore every weekday.

Next reason is probably a wise one from my wife.

For those new young couples that are having kids or going to plan to have a kid. Your kids school is important, ESPECIALLY the primary school. I like the west, hence the good school in the West is only Rulang Primary school at Lakeside. I am inspired by my ex-colleague from China, they are Singapore PR, and purprosely bought a flat at block 518, right in front of Rulang primary, and after doing all the volunteer work and some lucks in the ballot, they actually got a seat at the primary school. Such a good news for them. But remember, rules had changed.

As Karen is going to become Singaporean, and the new Singapore rules is making sure that every single Singapoeran kids apply to the particular school must be filled first , or they also need to go through ballot, then if there are still empty seats, it will be Singapore PR ballot time. So, if you are Singaproe PR, just don't dream to put your kids into the good school, almost 0% chance. That's one of the tactics that Singapore government force you to become citizen. It is cruel, but the fact is your house location is also important !

We are actually thinking either we buy a private condo at Parc Vista, or move our HDB closer to the school, if moving the HDB house, it is almost a No Go to buy a self-stay home at Malaysia now, the rule is once you sell the HDB house, and wanna buy a new one, you have to let go your self-stay home, and of course also my Nusa Height condo, even though it is for rental. So, to buy a HDB near lakeside is fine, in fact, once Karen becomes citizen, we can also get government subsidzied of S$30K to buy another resale flat.

Again, these are all because of my personal commitments and reasons why I give HH a miss, might not be relevant to everybody. As I said, if you buy it for self-stay in JB, and you are driving in and out, that's not a problem, just take note on the interest, and hope that it will become RM 2 million soon... for rental, no comments, as I am not the type of person who want to renovate nicely and rent to others.

For Nusa heights, it is totally different ball games, the rental is enought to sustain the payment + interest, and best of all, the price appreciation had already kicked in. Probably another similar condo investment makes sense for me. For a weekend home for me, I will pause as for now. I am sure Nusa Jaya will be a bright shining star, just plan your financial properly, it's a home anyway, you still need to make sure your spouse, childrens, education, children insurance. I repeat Children insurance, it is very very important, start it young, I will say, start it at age 0, you won't regret it. It is a must.

Updated on July 29, 2014

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We decided to bring our kid to study at Clementi instead of Lakeside as we had purchased a private residential property at Clementi instead. :) 

Who say credit card is not good ?

We often hear the financial advisor that it is best not to use credit card but to pay items in full cash because this is the best way to control your spending and not stretching beyond your spending limits. For those people who is able to control yourself, it is definitely not true for the above statement. Use credit card wisely and you will know you gain a lot and be happy planning a strategy to use the credit card you have !

Based on my limited knowledge on all the credit cards in Singapore, I would like to introduce some credit cards that I personally think it works out perfectly for me.

(1) The best credit card you should use every day is UOB One card. There are always some rules but you should be able to meet the criteria easily. Firstly, you must swipe a minimum of 3 transactions per month and also a minimum monthly spent of S$300 per month continuously for 3 months (that's not very hard, right? ) and you will get cash rebate of S$30.

Of course, there are many ways to plan your monthly payment, you can consolidate all your payment (insurance, phone bills, oversea spending, etc.) If you can hit the amount of S$800 per month with the above criteria, you get S$80, and the 3rd categorory is S$1,500 per month. That's 3.3% cash rebate ! Go and calculate your redemption value per dollars spent, it is always in the range of 0.5% and below, definitely not over 1%. If you want to hit the second or third category, you can issue a supplementary credit card for your spouse to consolidate the spending in monthly basis (we are not encouraging you to spend more in order to get the cash rebate, the key point is consolidation).

For me, once I know I hit the S$800 per month, I will immediately stop using this card and change to OCBC Robinson Card (why ? tell you below later at point 3).

(2) The second best card you should own is Standard Chartered Manhattan Platinum card because the card is very beautiful (not only that). Ask yourself a question, do you ever swipe a S$3,000 item in a year ? If you do, get this card. I can give you some good example, like buying a good mattress, a TV , furniture, consolidate your insurance payment in annual term instead of monthly term (in fact annual term insurance is slightly cheaper than monthly term), NATAS fair booking, air ticket booking, oversea spending, or paying a downpayment of JB condo, Horizon Hills (2%, 8%), etc.

This card works perfectly if you spend above S$3,000 in a month, because the cash back is 5% , their second category of $1,000-$2,999 is only 1%, I rather go and use UOB one card. Hence, the key here is, buying the big item purchase. If you have one, use this card, since you hit the S$3,000 that particular month, make sure you don't stop it, might as well consolidate the credit card into this card until it hit S$4,000, as the cap is S$200 per quarter. My strategy is , use the card only for one month and hit S$4,000 and stop using the card for the next two months, and just wait to get the cash rebate of S$200, the rest of the spending, goes to OCBC Robinson card.

For me, it is easy to hit S$3,000 sometimes, as I need to travel once in a month, the hotel, air ticket spending can hit that figure easily especially the Europe business trip.

(3) My third card, OCBC Robinson credit card. Personally, I like Robinson departmental store, and you only need to collect S$4,800 spending (no restriction like above, same as other normal credit card) to redeem S$30 dollars Robinson voucher. If you take a look at normal credit card redemption, it is always at least S$2300 spent for $10 voucher (be it a departmental store voucher , petrol voucher, NTUC voucher, etc.). So, make the calculation yourself, S$2,300 x 3 = S$6,900 spent, then you can only redeem a S$30 worth item. With OCBC robinson credit card, that's only S$4800. Of course there are more good things about this card, like free card park at raffles city center, more discount during the Sales period, etc.

(4) Last but not least, there are some good credit card target on specific spending, like my POSB Everyday card, I use it for my car petrol, together with my SPC U Card, that's a total cash rebate up to 17% ! And this POSB Everyday card good for HDB season parking of 3% rebate, and also the SP services, Town council monthly rebate, etc. For these targetted store rebate, you should just go ahead and use the particular card , instead of using the above credit card mentioned.

There are many more credit cards in the market, like Citibank card, 2% rebate on Giant purchase, etc. I recently just redeem 17 pieces of Carltex Petrol voucher of $10, I found out, this HSBC card is no longer my beloved card, as I have found the best credit card  mentioned above.

After all these good benefits, to get a credit card like Standard Chartered credit card, they even give you free cash of S$80 each in the card, hey, what more you want to ask for ? In conclusion, plan carefully, you will know credit card spending is good and fun, don't you think so ? at least for me, it is.

p/s: oh yeah, I read some people posting about redeem the credit card point to Krisfyler mileage point, for me, don't waste time on this, first of all, the SIA ticket fuel surcharge is so expensive, with that surcharge, I can purchase a complete full fare budget airline ticket ! I am quoting the airfare from Singapore to Hong Kong, Taiwan and even Japan. There is no saving at all ! For me, it is way faster to just collect the Krisfyler mileage point by flying SIA during the business trip instead of converting the credit card points...