To all property investors, If you’re reading this, it’s likely that you’re born in what I like to refer to as the “CPF generation”. That means you were born in your time where the government was promoting home ownership, as a crucial part of our national identity. That initiative came with a lot of benefits. Singapore is well known around the world as a country where a high percentage of our citizens own our own homes. On top of this, Singapore is also well known globally as a land of opportunity for property investment. Property here is seen as an almost “sure-win” investment, with seemingly guaranteed ROI. Not only will property continue to be a stable asset, but a financially reliable investment after a certain amount of years and hence it is a popular choice as part of their retirement planning. In other words, many of homeowners are now enjoying the status of being “Asset-Rich” and “High Net Worth”. And yet, in spite of their asset valuation, many of them are seeking financial help from the government. But why? Who do the individuals who need help even when they own high-value assets? An article by the Straits Times discussed the plight of many homeowners who have sizeable value in terms of assets, but face the problem of lacking cash flow. A large percentage of these individuals are actually the elderly and retirees who bought these “high value” homes a long time ago, when prices were much lower. The perception here is that they have assets. They have value. They have wealth. But that’s not true for a lot of them. For example, in the article, it even highlights the financial plight of a 70-year-old man who lives in a terraced house but has to depend on his son for monthly expenses. Because of this, a large number of them have had to request for financial aid from the government to make ends meet. In other words: Asset-Rich, but Cash-Poor. Another letter submitted to Straits Times by someone who owns multiple properties details the writer’s plight of having to make huge monthly payments on her two properties: After refinancing two loans with a bank in order to enjoy a more reasonable interest rate, she now has to fork out a total of over $22,000 in monthly payments. Looking at her previous combined monthly payment amount of $16,524 ($11,245 + $5,269), it is likely she is using these two apartments as investment instruments. This means she would probably be receiving about $20,000 in monthly rental income from them. To many, she may seem like a “rich” person. However, the hidden truth here is that due to the interest rates on her monthly mortgage payments, she now has to bear a huge financial burden. Like I mentioned earlier: Asset-Rich, but Cash-Poor. This issue is not limited to those who own bigger properties. Because no matter what kind of home you may own, this problem will persist as long as one condition is not met: When your potential rental income cannot cover your investment costs. I mentioned earlier that property remains a stable and profitable form of investment in Singapore. That still holds true. But there are many factors to consider. Can you ensure that your investment is consistently being rented out (and drawing income for you)? How do you ensure your rental fees are high enough to maintain your costs, while making sure they remain competitive? How can you safeguard yourself against other factors that are out of your control (such as the property cooling measures introduced by the government, which slows down the market) and ensure your retirement is jeopardised? Many investors cannot solve that. That’s why despite owning valuable properties “on paper”, they are actually losing money! That’s why even though property investment may seem like the most stable investment solution out there, it actually comes with a lot of risk! Many investors realise this too late. And by the time they do, they may have potentially lost out on thousands of dollars in opportunity costs. So, what’s the solution here? If you’re planning to buy property for investment purposes, should you hold off first? If you currently own property that is meant for investment, should you sell off your properties and hold on to cash instead? Well, not exactly. But there are ways for you to modify your investment portfolio. Ways to ensure your portfolio provides lesser risk, while providing a channel for you to make your returns in liquid. Granted, a higher-risk portfolio means you stand a chance to gain higher returns. But if you’re looking for a more stable, solid, and low-risk alternative to your current investment portfolio, I may just have the solution for you. Or you wish to find out more on how to plan for retirement in Singapore, I’m more than happy to have a conversation with you! Simply fill out the form below: Read: How my client gambled away her $1million retirement fund away without knowing.