Fascinating topic! I crunched some numbers and found that properties at the W Singapore Sentosa are averaging around $2.5 million for a 4-bedroom apartment, with rental rates starting at $7,000 per month. Based on these figures, I estimate a dismal ROI of approximately 3.36% yearly rental income (and I did not yet consider taxes and management fees). This is quite low compared to other locations in Asia where you can easily achieve 5-6% annually. Additionally, the property is on a 99-year leasehold, which is a major drawback, especially considering it's already a 10-year-old property built in 2012. What's even more concerning is that at this rate, it would take approximately 29.76 years to recoup the full investment, which is incredibly poor. Generally, if it takes more than 15-20 years to recover the investment, it's not considered a good deal. Furthermore, with many units remaining unsold, even if someone is interested in purchasing the property, it would be challenging to resell it for a profit. Most likely, significant discounts would be necessary to facilitate a sale. In my opinion, it makes much more sense to bypass the property altogether and instead invest in shares of the developer. W Singapore Sentosa is owned by Marriott International, Inc. (MAR). By purchasing their stock, you indirectly own the unsold units until they are sold, as well as a stake in the W Singapore Sentosa Hotel. Additionally, Marriott would receive a portion of the management fees generated by all the property units. Over the last 8 years, MAR stock value has increased by approximately 298.12%, with, in addition, an average dividend yield of 0.85%. Given these considerations, I would prefer to invest in Marriott stocks, which can be sold at any time if needed, rather than owning a single underperforming property that is difficult to resell and offers minimal ROI. 😅
Thanks for crunching the numbers! Skipping the property and investing in shares would definitely be more viable in the long run. Whether it be Marriott stocks or others, there would be positive cash flow. Plus making it more liquid and easier to exit when you need to do so. 👍 Let's say you purchase the 3-bedder for $2.83m, you would need to pay about $9,531 in monthly repayment (3.5% interest and 30 years loan tenure). You would be paying $6190 just for your interest alone and only $3340 to your principal. More than 2/3 is going for your interest. Really makes more sense to put your assets into another faster vehicle to move. 😊
Just curious - how come there’s so many balance units? Have they been rented out in the past? What about the balance 100++ units - is the developer renting these units out while waiting to sell or are these units just left empty?
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Fascinating topic! I crunched some numbers and found that properties at the W Singapore Sentosa are averaging around $2.5 million for a 4-bedroom apartment, with rental rates starting at $7,000 per month. Based on these figures, I estimate a dismal ROI of approximately 3.36% yearly rental income (and I did not yet consider taxes and management fees). This is quite low compared to other locations in Asia where you can easily achieve 5-6% annually. Additionally, the property is on a 99-year leasehold, which is a major drawback, especially considering it's already a 10-year-old property built in 2012.
What's even more concerning is that at this rate, it would take approximately 29.76 years to recoup the full investment, which is incredibly poor. Generally, if it takes more than 15-20 years to recover the investment, it's not considered a good deal. Furthermore, with many units remaining unsold, even if someone is interested in purchasing the property, it would be challenging to resell it for a profit. Most likely, significant discounts would be necessary to facilitate a sale.
In my opinion, it makes much more sense to bypass the property altogether and instead invest in shares of the developer. W Singapore Sentosa is owned by Marriott International, Inc. (MAR). By purchasing their stock, you indirectly own the unsold units until they are sold, as well as a stake in the W Singapore Sentosa Hotel. Additionally, Marriott would receive a portion of the management fees generated by all the property units. Over the last 8 years, MAR stock value has increased by approximately 298.12%, with, in addition, an average dividend yield of 0.85%.
Given these considerations, I would prefer to invest in Marriott stocks, which can be sold at any time if needed, rather than owning a single underperforming property that is difficult to resell and offers minimal ROI. 😅
Thanks for crunching the numbers!
Skipping the property and investing in shares would definitely be more viable in the long run. Whether it be Marriott stocks or others, there would be positive cash flow. Plus making it more liquid and easier to exit when you need to do so. 👍
Let's say you purchase the 3-bedder for $2.83m, you would need to pay about $9,531 in monthly repayment (3.5% interest and 30 years loan tenure). You would be paying $6190 just for your interest alone and only $3340 to your principal. More than 2/3 is going for your interest.
Really makes more sense to put your assets into another faster vehicle to move. 😊
Just curious - how come there’s so many balance units? Have they been rented out in the past? What about the balance 100++ units - is the developer renting these units out while waiting to sell or are these units just left empty?
Developer does rent it out to earn some income. Those not rented are left empty. They have the holding power :)
Thanks. I thought the perspectives were insightful.
Glad you think so! 😊