Hunting for an investment property + Divested AEM from SRS

Portfolio as of 14 Aug 2022

I sold AEM Holdings at $4.39 on Friday and realised a profit of around $3k for a short term hold of 2 weeks. AEM doesn't really pay a good dividend, so the intent from the start was capital gains.

Originally I had a $4.50 target but one of the catalysts to cut short the holding period was also due to Intel unexpectedly cutting its outlook for the year and Intel is AEM's key customer.

Intel shocked Wall Street as it reported a slump in revenue in its latest quarter and slashed its financial outlook for the rest of the year, sending its battered stock price down 10 per cent in after-market trading on Thursday. The biggest US chipmaker by revenue blamed the disappointing results on weakening economic conditions, supply chain disruptions and competitive pressures. The news followed robust earnings reports from other big chip companies in recent days and suggested that Intel had been hurt by its exposure to the shrinking PC market and its loss of leadership in leading-edge chipmaking to TSMC.

So here you go, my cash balance will go back up to $115k again after the sale.

Goal No. 7 - Scout for a second property

A more interesting event happened during the National Day week. Regular readers know that one of my goals was to buy a second property in 2022 (see goals here). Originally the idea was to buy a property with enbloc potential but after viewing a few units, I gave up because of the following reasons:

• Priced to perfection - existing owners want to minimise the discount between their sale price and the expected en-bloc price. Hence they have unrealistic expectations.
• Prohibitive tax liability - assuming I bought a property and it was successfully en-bloc within 3 year, the tax liability makes it not worth the effort as I have to fork out between 4 to 12% of the selling price as Sellers' Stamp Duty and it is beyond my control on when the sale might take place
• Large ticket size - the older developments with enbloc potential tends to be bigger, as such the capital outlay will be significant and tough for wifey to get a loan

I re-aligned my investment criteria to the following:

• 1 Bedroom below $1.5m  
• Good location / facing  
• Preferably freehold
• Within 1km to "branded" schools
• Yield of 3%  
• Preferably completed or going to TOP soon

I managed to secure my pigeon unit that checks all the boxes this week. I see the unit on Wed, wifey see the unit on Thu and I give the cheque on Friday.  Buying property has always been like that for us - You will feel it when you know it is the one lol.

Anyway, here are some pictures and I will share with you some of my thought process.

View from the common facilities (function room, garden, pool) on roof top  

 

Pool view and visually, quite spaced out from other developments

View from Unit and quiet facing with west sun blocked

Let me share with you how it check the various criteria I have shared with you above.

This freehold development is located in District 10 and within 1km of ACS and SCGS. With so many Mr. and Mrs Meng Mu in Singapore, it should hopefully attract good tenants who needed the address and to fulfill the minimum occupation period of 30 months. 

In addition, with the opening up of family offices in Singapore, there will also be an influx of professionals relocating here from Hong Kong and they want to live near town in a prestigous area.

The 1 bedroom cost slightly more than $1.4m, comes with a pool view and a quiet facing away from the main road. It is also rare to find a 1 BR that has a L-shaped window view from the living area, making it much more spacious than a typical one bedder. Surrounding developments are also quite well spaced out.  

Rental yield based on a few similar units on the lower floors that have been rented out worked out to be slightly above 3%, which is pretty rare for a freehold unit. 

Lastly, it is always "safer" buying an actual unit rather than buying from the floor plan as you get to see the quality of the finishing and more importantly, you can rent it out immediately. 

I hope you enjoyed this post today. I didn't give you the name of the actual condo or tell you the other properties that I have viewed and rejected. That you have to do your own homework. ^_^