Myth 1: Renovations will increase the value of your home
There is no doubt that a well-furnished house will have a good sale value. The repair of cracked tiles, peeling paint, broken air conditioners can enhance the property’s value and rentability.
In actuality, costly and large-scale renovations, meant to add value, are often risky because every buyer is different. Some people will not be willing to spend more money on fancy flooring, a walk-in wardrobe, or a kitchen island. It might happen, but you can never guarantee it. Typically, younger buyers are often more interested in personalising the home to their own tastes and less concerned with existing renovations.
Myth 2: Freehold properties can be kept for the benefit of your future generations
When it comes to freehold properties, the general belief is that:
- It cannot be taken back by the government
- It can be handed down to the next generation
- It carries a higher value
However, if the government decides your property has to be cleared to build new train tracks or an expressway, then you will have to give it up. Most of the time, there’s compensation, but the amount cannot be negotiated or refused. It is really only possible to defend against government acquisition if you seek out preserved buildings, such as former shophouses (though these tend to be very expensive).
Myth 3: HDB loans are better because if you can’t pay, you won’t lose your flat
It is possible for HDB to take back your apartment if you fail to pay. Generally speaking, they’re much more accommodating than banks, but the flexibility usually takes the form of restructured loans or the ability to delay payments.
In such a case, HDB might let you extend your loan tenure to make it easier for you to pay your monthly repayments. Alternatively, your working children may be asked to become co-borrowers in order to reduce your mortgage payment.
