I Have $1.5m In Cash But Don’t Own A Property: Should I Buy An HDB Or Condo In Bedok For Rental Income?

Hi, 

Would like to seek your advice. 

I would like to buy a property for rental income now, and in future capital appreciation/to stay. 

Im currently staying with a friend and doesn’t need a place. In future, if I need to move out, I would like to stay at Bedok Central Area. 

I’m currently 47 with a stable job but would prefer not to take a loan. If need be, very small loan. 

I have about near to $600k in my cpf and about $1.5m cash. 

I’m wondering which is a better financial decision. To buy a hdb or a private condo so that I can earn rental now and in future, for capital appreciation or to stay. And whether buying Bedok central is a good decision as the price is high compared to other nearby areas. 

Thank you. 

Yours Sincerely,

(This is part of an ongoing series where we answer reader questions about the property market. If you have one of your own, send it to stories@stackedhomes.com.)

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Hi there,

When considering property investment, it’s important to recognise the dual benefits of rental income and potential capital appreciation. Traditionally, leveraging a loan to purchase property allows investors to maximise their returns. However, in today’s environment of high interest rates, the cost of borrowing has increased significantly. This makes the prospect of paying for a property in cash more appealing if you have the means, as it avoids the burden of high-interest payments and reduces financial risk.

Your situation is quite favourable with nearly $600k in CPF and $1.5m in cash. Given your preference to avoid substantial loans and your interest in generating rental income while planning for future capital appreciation or personal residence, there are a few key considerations to address.

Since you prefer not to take a loan, we’ll assume your budget is $2M after reserving $100K for the Buyer’s Stamp Duty (BSD) and other expenses.

Let’s begin by looking at the performance of properties in Bedok Central.

Performance of properties in Bedok Central

When considering private condominiums in the area, there are only two options: Bedok Residences and Sky Eden @ Bedok. The latter is a new launch expected to be completed in 2026, but it is nearly sold out, with the remaining units exceeding your budget. Therefore, we will just be looking at Bedok Residences.

Bedok Residences

Year	Bedok Residences	YoY	D16 99y non-landed pte properties	YoY	All 99y non-landed private properties	YoY
2015	$1,489	–	$991	–	$1,033	–
2016	$1,302	-12.56%	$949	-4.24%	$1,129	9.29%
2017	$1,393	6.99%	$958	0.95%	$1,115	-1.24%
2018	$1,440	3.37%	$1,090	13.78%	$1,153	3.41%
2019	$1,468	1.94%	$1,089	-0.09%	$1,178	2.17%
2020	$1,448	-1.36%	$1,076	-1.19%	$1,173	-0.42%
2021	$1,491	2.97%	$1,163	8.09%	$1,207	2.90%
2022	$1,559	4.56%	$1,305	12.21%	$1,337	10.77%
2023	$1,651	5.90%	$1,404	7.59%	$1,463	9.42%
Average	–	1.48%	–	4.64%	–	4.54%

The average growth rate for Bedok Residences appears subpar compared to other 99-year leasehold non-landed properties. This is mainly due to the price drop from 2015 to 2016.

However, when you look at the transactions more closely, it doesn’t quite paint the full picture. In 2015, there were five transactions, four of which involved smaller units that typically have a higher price per square foot (PSF). In 2016, there were just four transactions, two of which were larger units with a lower PSF. This discrepancy could explain the significant drop. As a result, it’s hard to say that this accurately represents its price movements due to the low transaction volume.

Apart from this period, prices have been moving in line with the overall market.

The average transacted price PSF for Sky Eden is $2,118, which is considerably higher than that of Bedok Residences. Given that they share the same convenience and amenities, the demand for Bedok Residences is likely to remain strong.

You also mentioned the high prices at Bedok Central and whether it’s safe to purchase. Here’s a look at the $PSF of resale transactions since 2023 Q2 till now:

District	2023 Q2	2023 Q3	2023 Q4	2024 Q1	2024 Q2
1	$1,971	$2,032	$2,018	$1,976	$2,043
2	$2,161	$1,953	$1,983	$1,893	$1,958
3	$1,961	$2,047	$2,046	$2,061	$2,118
4	$1,786	$1,794	$1,820	$1,832	$1,810
5	$1,541	$1,581	$1,604	$1,572	$1,623
7	$1,629	$1,744	$1,784	$1,865	$1,981
8	$1,589	$1,745	$1,689	$1,646	$1,722
9	$2,154	$2,137	$2,227	$2,271	$2,223
10	$2,114	$2,105	$2,208	$2,398	$2,397
11	$1,942	$1,880	$1,981	$1,981	$1,955
12	$1,509	$1,614	$1,639	$1,677	$1,634
13	$1,761	$1,748	$1,753	$1,788	$1,860
14	$1,578	$1,469	$1,579	$1,597	$1,715
15	$1,665	$1,693	$1,719	$1,716	$1,733
16	$1,406	$1,423	$1,443	$1,432	$1,467
17	$1,166	$1,150	$1,159	$1,145	$1,177
18	$1,274	$1,292	$1,326	$1,353	$1,418
19	$1,434	$1,448	$1,502	$1,505	$1,537
20	$1,629	$1,608	$1,713	$1,649	$1,760
21	$1,709	$1,583	$1,658	$1,691	$1,731
22	$1,368	$1,404	$1,446	$1,402	$1,531
23	$1,339	$1,357	$1,328	$1,341	$1,401
25	$1,145	$1,128	$1,195	$1,072	$1,223
26	$1,397	$1,299	$1,388	$1,341	$1,502
27	$1,305	$1,214	$1,263	$1,233	$1,309
28	$1,356	$1,378	$1,417	$1,417	$1,398
Grand Total	$1,600	$1,604	$1,662	$1,692	$1,714

If we look at District 16, you’ll find that it has an average $PSF of around $1,400+ over the past year. This is lower than the average across Singapore across all periods. As such, we wouldn’t say that Bedok is priced highly. Its maturity and large HDB population would also provide support for private condos in the area.

Since you mentioned that you plan to rent out the property in the initial years, let’s also look at its rental yield.

With a $2M budget, you can afford a 2 or 3-bedroom unit. Here are some recent transactions:

2-bedroom units

Date	Size (sqft)	PSF	Price	Address
Apr 2024	797	$1,707	$1,360,000	16 Bedok North Drive #12
Jan 2024	883	$1,790	$1,580,000	22 Bedok North Drive #09
Dec 2023	1,076	$1,440	$1,550,000	22 Bedok North Drive #04

3-bedroom units

Date	Size (sqft)	PSF	Price	Address
Feb 2024	1,109	$1,685	$1,868,000	18 Bedok North Drive #14
Dec 2023	1,292	$1,384	$1,788,000	22 Bedok North Drive #09
Sep 2023	1,130	$1,617	$1,828,000	16 Bedok North Drive #05

Based on rental transactions from February to April 2024, the average rent for a 2-bedroom unit is $4,334, and $5,857 for a 3-bedroom unit. Using the average sale price from the past year (May 2023 – May 2024), the rental yield is approximately 3.51% for a 2-bedroom and 3.83% for a 3-bedroom unit, which is relatively decent.

Now, let’s move on to HDBs.

Since you’ve mentioned capital appreciation, we’ll focus on the newer clusters in the area to reduce the effect of depreciation on price.

Within 15 minutes of Bedok MRT station, there are only two clusters completed after 2000: Linear Green, completed in 2010, and Ping Yi Greens, completed in 2016. Since Ping Yi Greens only recently met its Minimum Occupation Period (MOP), there isn’t much historical data available, so we will focus on Linear Green.

Linear Green HDB

Year	Linear Green	YoY	All Bedok HDB	YoY	All HDB	YoY
2013	$658	–	$480	–	$469	–
2014	$632	-3.95%	$457	-4.79%	$441	-5.97%
2015	$629	-0.47%	$433	-5.25%	$423	-4.08%
2016	$644	2.38%	$431	-0.46%	$424	0.24%
2017	$640	-0.62%	$433	0.46%	$425	0.24%
2018	$678	5.94%	$425	-1.85%	$419	-1.41%
2019	$693	2.21%	$410	-3.53%	$416	-0.72%
2020	$673	-2.89%	$422	2.93%	$431	3.61%
2021	$684	1.63%	$473	12.09%	$488	13.23%
2022	$735	7.46%	$506	6.98%	$532	9.02%
2023	$801	8.98%	$546	7.91%	$564	6.02%
Average	–	2.07%	–	1.45%	–	2.02%

The table shows that Linear Green’s average growth rate is on par with HDBs across the island and better than those in Bedok. Its location is advantageous, being less than a 5-minute walk from all the action and the youngest cluster this close to the MRT station and amenities.

With your budget, you can purchase any unit type here – from 3-room to 5-room flats. Next, let’s examine its rental yield.

These are some of the recent transactions:

3-room flat

Date	Block	Level	Size (sqm) and unit model	Price
May 2024	219D	13 to 15	69.00Model A	$605,000
Jan 2024	220A	01 to 03	62.00Model A	$558,000
Nov 2023	220A	04 to 06	62.00Model A	$560,000

4-room flat

Date	Block	Level	Size (sqm) and unit model	Price
May 2024	220B	13 to 15	97.00Model A	$893,000
May 2024	221A	07 to 09	87.00Model A	$815,000
May 2024	221C	07 to 09	97.00Model A	$850,000

5-room flat

Date	Block	Level	Size (sqm) and unit model	Price
Apr 2024	219C	07 to 09	112.00Improved	$987,000.00
Dec 2023	220B	07 to 09	112.00Improved	$990,000.00
Jul 2023	219B	10 to 12	112.00Improved	$985,000.00

Based on rental transactions from February to April 2024, the average rent is $2,813 for a 3-room flat, $3,342 for a 4-room flat, and $3,950 for a 5-room flat. Using the average sale price from the past year (May 2023 – May 2024), the rental yield is 5.99% for a 3-room flat, 4.87% for a 4-room flat, and 4.82% for a 5-room flat.

HDBs typically have a higher rental yield compared to private properties. However, there are restrictions, such as being unable to rent out the entire unit until it reaches its Minimum Occupation Period (MOP). For the first 5 years, you can only rent out the additional bedrooms (eg. if it’s a 4-room flat, you can only rent out 2 bedrooms), which means the property is not maximising its full rental potential. 

With a better understanding of how properties in Bedok Central are performing, let’s examine the costs involved for the two property types.

Potential costs

Buying a unit at Bedok Residences

For calculation purposes, let’s assume you purchase a 3-bedroom unit at the average price of $1,836,000 (based on the past year) and rent it out for $5,857 per month. We will consider a 10-year holding period, during which you rent out the property for the first 5 years and live in it for the following 5 years.

Purchase price	$1,836,000
BSD	$61,400
Total CPF and cash needed	$1,897,400

Costs involved

BSD	$61,400
Maintenance fees (Assuming $350/month)	$42,000
Property tax	$87,465
Rental income	$351,420
Agency fees (Payable once every 2 years)	$19,152
Total gains	$141,403

Buying an HDB at Linear Green

For calculation purposes, let’s assume you purchase a 4-room flat at the average price of $823,732 (based on the past year) and rent out two of the bedrooms for $1,000 per month each. As before, we’ll consider a 10-year holding period, with you renting out the bedrooms for the first 5 years and having the place to yourself for the next 5 years.

Purchase price	$823,732
BSD	$19,311
Total CPF and cash needed	$843,043

BSD	$19,311
Town council service and conservancy fees (Assuming $78/month)	$9,360
Property tax	$6,680
Rental income	$120,000
Agency fees (Payable once every 2 years)	$6,540
Total gains	$78,109

As mentioned at the beginning, when it comes to property investment, one advantage is the ability to leverage a loan. However, given the current high-interest environment, it might be beneficial to avoid taking a loan. In both scenarios, even if you only rent out the property for 5 years, you will still see a decent amount of profit since you’re not incurring any interest expense.

With the first option of buying a condo, although the gains are higher, the initial outlay is also greater.

Another option to consider is buying an investment property first (not necessarily in Bedok Central) with a good rental yield. Later, when you decide to move into a place of your own, you can purchase a property in Bedok Central. If that property is going to be your forever home, you might even consider an older flat since lease decay won’t be an issue for you.

The investment property can be in any location as long as the rental yield is good and there’s good demand for such a property so that you do not face issues when trying to sell it later.

For calculation purposes, let’s assume you purchase a 3-bedroom unit at Bedok Residences and rent it out for 5 years before buying a 4-room HDB in Bedok Central for your own stay. Note that this will require a 15-month wait-out period as you’re not yet 55 years old (though this rule may not apply to you by then).

We will also assume you can continue staying at your friend’s place during this time, and that you’ll sell Bedok Residences at the same price you bought it for.

Buy a unit at Bedok Residences, rent it out for 5 years and sell it to buy an HDB in Bedok Central

Bedok Residences purchase

Purchase price	$1,836,000
BSD	$61,400
Total CPF and cash needed	$1,897,400

Costs involved 

BSD	$61,400
Maintenance fees (Assuming $350/month)	$21,000
Property tax	$72,510
Rental income	$351,420
Agency fees (Payable once every 2 years)	$19,152
Total gains	$177,358

Linear Green 4-room flat purchase

Purchase price	$823,732
BSD	$19,311
Total CPF and cash needed	$843,043

Costs involved

BSD	$19,311
Town council service and conservancy fees (Assuming $78/month)	$3,744
Property tax	$2,672
Total costs	$25,727

Total gains if you were to take this pathway: $177,358 – $25,727 = $151,631

What should you do?

Potential pathway	Costs/Gains	Cash on hand remaining
Buying a unit at Bedok Residences	$141,403	$202,600
Buying an HDB at Linear Green	$78,109	$1,256,957
Buy a unit at Bedok Residences, rent it out for 5 years and sell it to buy an HDB in Bedok Central	$151,631	$1,195,557

The table indicates that the final option, which involves initially purchasing an investment property to rent out before selling it to acquire an HDB in your desired location, has the potential for the highest gains and leaves you with the most cash on hand, which can be allocated to other investments.

In the first option, although there may be potential for appreciation with the condo, this can only be realised upon selling the property. Therefore, if the condo is intended to be your forever home, you will be sitting on these potential profits and have a lower amount of cash at your disposal. This plan makes sense if you’re looking to cash out and downgrade to a smaller home later on, otherwise, its full potential will not be realised.

In the second option, the cost is lower, but you cannot maximise your rental income in the first 5 years, as only the additional bedrooms can be rented out until the property reaches its MOP. Regardless, you do have a sizeable amount of cash that can be invested for the long haul.

The final option offers the best of both worlds, especially since alternative accommodation is available and the 15-month wait-out period may not be a significant concern.

With this option, you can benefit from the rental yield of your investment property, cash out from it, and purchase a more affordable property in your preferred location. In our calculations, we assumed the purchase of an HDB at $800K. If you were to buy one of the older HDBs, the remaining cash on hand would be even higher. This option would be most favourable if your intention is to make the HDB your permanent residence without selling it.

Ultimately, when it comes to making money here, there’s no right or wrong. There’s safety in all three options. The rest boils down to:

1. Do you want to stay in an HDB or condo in the long run?
2. How would you use your cash?

Since you’re not taking a loan, you’ll not be taking on any leverage with property which is the huge benefit of buying property, especially in a low interest rate environment.

As such, it’s a question of how you want to allocate your cash – do you think it can grow more with alternative investments? If you could achieve a year-on-year growth of 7%-10% over the long term, that would likely outperform your condo. You wouldn’t have to go through the hassle of selling your property to unlock its growth in the future too.