The story of ego, a condo and $400,000 lost over 11 years

Thomas Tong
7 min readDec 29, 2019
Photo by Andi Rizal on Unsplash

[Full Disclosure: I’m a licensed real estate salesperson with PropNex. Updating and maintaining this blog helps me condenese and express my thoughs about the real estate scene in Singapore. Hope you enjoy the read! Feel free to ask me any question here, or drop me a DM on Facebook.]

During my time as a property agent, I’ve seen many clients in their 30s and 50s trying to unload property they bought previously from another agent (years ago, of course).

It’s almost always a painful and sobering experience.

Why? Because that’s the moment most of them will realise they’ve been racking up losses of up to $200,000 to $500,000 because they were advised wrongly.

Here’s the one of the most painful examples:

The case study I always like to use is my client (let’s call her Samantha) who bought a one-bedroom unit when she was 27 at The Sail @ Marina in 2008 (for $1,100,000) who intended for it to be an investment.

Owning a private property in an excellent location is what many of us think is a foolproof strategy to making money. But in reality, things are far more complex. (Photo credit: Eugene Lim on Unsplash.)

On paper, the property was perfect:

It was an iconic building in the Marina Bay area, and walking distance to malls such as Marina Bay Sands and the Central Business District.

This was a property that would on paper put many other condos to shame just by the sound of the address.

With news that there will be great plans of rejuvenation of the district to increase residential dwelling, and a Government Land Site up for sale, it was the epitome of the perfect property anybody could own at 28.

Samantha would be rolling in money in eleven years when she sold it.

Or so she thought.

But what Samantha did not consider was the hidden costs behind owning a condo. I’ve highlighted eight major ones below, and added the cost she had to fork out, should she sell the condo today.

  • Buyer’s stamp duty ($27,600)
  • Reno ($20,000)
  • Agent Fee ($22,000)
  • Maintenance Cost ($52,800)
  • Bank Loan Interest ($175,164)
  • Property Tax ($26,400)
  • Legal Fee ($5000)
  • CPF Accrued Interest ($85,823)

Add that all together, and you can see the cost Samantha sunk in over eleven years easily added up to $420,000. Nasty. But it gets worse.

Samantha might have bought the property as an investment, but she chose not to rent it out during this period, thinking that she could afford it comfortably. Thus, rental yield was zero dollars.

Here’s the kicker: From 2008 to 2019, the value of Samantha’s apartment failed to appreciate.

Samantha bought her apartment in 2008 for 1.1 million dollars. Eleven years later, its value has stagnated and remained unchanged.

While on paper, this doesn’t seems so bad. But add the hidden costs of the property and this, and you’ll get a whopping $420,000, or a monthly loss of approximately $3,000 per month.

Not what you’d call a profit.

If you invested with pride, prepare to lose money

As Asians, we have an intrinsic desire to own nice things, especially real estate.

However, behind all the glorious stories of what you hear online from people who have made tons of money from passive income and capital appreciation from their real estate, are the people who have lost heaps of money by buying the wrong property.

The sad thing about Samantha’s story was that it could completely be avoided.

At 28, her decision to buy the flashiest unit in the city was based on her need to prove herself as a wealthy individual, rather than rational research. Don’t get us wrong, The Sail is a great property, but by the time Samantha made her purchase, it’s potential to make its owner money had long faded.

It was ego that made her choose to live in the property, rather than rent it out for income. Samantha could have rented out the property to lessen her losses, but without a clear look at her financial situation, she decided she could afford living in it instead.

Finally, it’s also ego that makes her hang on to the property today, refusing to cut losses. In a recent conversation with her, Samantha insists that the day will come that her property will appreciate enough to offset her $420,000 loss.

To be brutally honest, that seems unlikely.

Whatever property you buy, always back it up with the right research

In contrast, the Carribean surged 45% in value.

If Samantha had bought the Carribean in that very same year (2008), she’d be living in a property that rose 45% in value. After taking into account the hidden costs, she’d effectively would have lived in the property for free, effectively being $420,000 wealthier.

Of course, all this would have only been possible if she had sought out property advice from a professional.

Here’s how I can help you:

Over the years, I’ve crunched the numbers and compared the condos. All in the name of answering the questiion: What factors make some condo appreciate better than others?

Truth is, you already know some of the obvious ones such as a trusted developer, entry point and location. But to the untrained professional, the rest might elude you.

If you’d like to learn more about how you can potentially avoid making a mistake as painful as Samantha’s, I’ll be happy to meet up with you for a non-obligatory consultation, absolutely free of charge.

All you’ve got to do is to fill in this form, and my team will be in contact with you shortly to follow up.


Dear Reader, I’ve gotten quite of number of questions after publishing this article, and I’m thankful for the great debate that it has sparked. I thought it would be more efficient if I answered some of them here, as they might be questions that you may have too.

Firstly, many are asking about CPF Accrued Interest and if it is fair to conclude CPF Accrued Interest as a cost, since the money is going back to one’s own CPF account. Also, as it cannot be used for anything else other than buying a property, what do I use my CPF for? Wouldn’t it make sense to fund my property with it?

Sure! if you have no intention to sell your property, you will not be subjected to CPF Accrued Interest (CPFAI), and that would probably mean that it will not affect you.

However, I am approaching this topic from an investor mindset that every single cent matters, and should be used to maximise one’s returns. While I agree that CPFAI is not a typical cost, such as stamp duty and maintenance fees where once it is paid, it is gone forever, the real cost here is OPPORTUNITY COST.

As property investment is likely to be the biggest purchase in your life always better to know exactly how much cost you might potentially incur? Let me break this down.

First, you have to understand what CPFAI is. The Government pays you an accrued interest of 2.5% when you keep your money in your CPF account. However, when you take it out from your account to buy a property, you will have to incur that same 2.5% interest rate yourself. And this money will come from your cash proceeds when you sell your property.

So, not only are you NOT getting the money from the government you have to bear the cost of the accrued interest with your own cash! The real opportunity cost here is actually 5%.

Let me illustrate this. As mentioned in the article, Sam purchased a property at $1.1M. Given that she did not have enough to cover her cost, that means the 2.5% CPFAI will not be covered by the cash proceeds, but rather her own pocket. That equates to $85,823! If you were in her situation, do you have that liquidity in your bank to pay up for this?

Another perspective on why this is an opportunity cost is that instead of locking this sum in your CPF, you could have invested it in other financial instruments (REITS, Stocks etc), which would provide higher yield. Hence the Opportunity Cost here not only refers to having your money tied down, but also losing out on better investment opportunities.

Some also questioned my assertion that some people might buy a property not due to Ego, but rather a desire to stay in central area for other factors such as convenience.

This is what precisely prompted me to write this article, as this person bought the property not just because she loved it, but because she was misled into thinking it was a great investment.

What I am saying here is not that you cannot aspire to stay within the CCR, or that you cannot invest in a property in District 1 for capital appreciation. What I am saying is that you need to be aware about the potential Demand for your investment before you sign on the dotted line.

If she really wanted to stay there for convenience’s sake, she could have just rented it, and still enjoyed the same benefits. But, she chose to buy it, because of the additional push factor that it would make a great investment on top of her desire to stay in that area.

In all, I really appreciate the honest feedback I have been receiving. And I hope to provide more insightful and accessible knowledge for you readers on your property investment journey!



Thomas Tong

I’ve seen too many people make mistakes when it comes to buying property. Now, I help people buy the right home for investment or for own stay.