We make 0k per year and live in a 3-room HDB flat. Should we save to buy an investment property, upgrade to a condo, or larger flat?, Lifestyle News

We make $180k per year and live in a 3-room HDB flat. Should we save to buy an investment property, upgrade to a condo, or larger flat?, Lifestyle News

by Investment Property

Hello,

We’ve read with interest on your advice columns, and we especially appreciate the effort and detail put into the responses.

My wife and I are in a bit of a dilemma. 

We live in a 3-room HDB flat in Clementi Ridges which we bought for close to $400k. Our MOP is up in April this year. We’re in our mid-30s and together we make $15,000 gross a month, with no debts other than our HDB loan. We don’t plan to have kids.

Our goal is to have a retirement nest egg; the question is how best to go about building it. We’re not sure if our next move should be to:

(1) Upgrade to a freehold condo – we’re only interested in one located in Districts 9, 10, 11, 20, or 21;

(2) Save up to buy an additional investment property; or

(3) Upgrade to a larger HDB through resale/2nd BTO.

Sincerely hoping you could share some insights to help in our decision-making. Thank you very much!

1) Outstanding loan – $238,000

2) CPF used plus accrued interest – $128,000 from me + $36,000 from my wife

Hi there!

Thanks for reaching out to us!

It’s always good to start the retirement planning process early, as there is a lot you can do to build that nest egg from now till then. With so many possible pathways to take, it can be difficult to decide on the best option.

We will do our best to shed some light on the possibilities and hopefully, it will make your decision-making process a little easier. Let’s start by looking at affordability.

Affordability

These are some of the recent 3-room transactions for Clementi Ridges:











Date Block Level Size (sqm) Price
Oct 2022 312B 19 to 21 69 $615,000
Sep 2022 312A 19 to 21 69 $660,000
Sep 2022 312B 16 to 18 69 $660,000
Aug 2022 312A 13 to 15 69 $608,000
Jul 2022 312A 13 to 15 69 $565,000
Jul 2022 312A 13 to 15 69 $638,000
Jul 2022 312A 22 to 24 69 $642,800

Source: HDB

We will use the average selling price of $626,971 for calculation purposes.








Description Amount
Selling price $626,971
Outstanding loan $238,000
CPF used plus accrued interest $164,000
Cash proceeds $224,971

Affordability (For a private property)










Description Amount
Maximum loan based on a fixed monthly income of $15K and ages 35 $1,728,055 (30 years tenure)
CPF funds $164,000
Cash $224,971
Maximum affordability based on CPF and cash of $388,971 $1,555,884
BSD based on $1,555,884 $46,835
Estimated affordability $1,509,049

Due to the available amount of CPF and cash that make up the 25per cent downpayment, you will not be able to take the maximum loan

Affordability (For an HDB)










Description Amount
Maximum loan based on a fixed monthly income of $15K and ages 35 $852,536 (25 years tenure)
CPF funds $164,000
Cash $224,971
Total loan + CPF + Cash $1,241,507
BSD based on $34,260
Estimated affordability $1,207,247

Option 1: Upgrade to a freehold condo in D9, 10, 11, 20 or 21

With a budget of $1.5 million, you’ll most likely be looking at a 1 + Study or a two-bedder in these locations. As you do not plan to have children, this should suffice but as most of these units are rather compact, it may take some getting used to from a 3-room HDB flat which is typically bigger in comparison.

If you were to do a quick search online, you’ll see that the current pickings are rather slim, and the majority of the developments that fall within this price range are boutique projects.

District 9 District 10 District 11 District 21

The developments shown above are those with available units that match your affordability. You’ll notice that after the launch, their transaction volumes are generally low, resulting in the trend lines appearing somewhat volatile. This is a usual concern with boutique developments because if the turnover rates are low, it is difficult for prices to move since banks value a property based on recent transactions. You can see from the graphs that prices are relatively stagnant for most of the projects, as compared to other freehold condos in the same district.

Also, many of these developments are made up of predominantly one and two- bedders which are catered more towards investors since the barriers to entry are lower. This is another issue as investors usually go wherever the money is, so if they find a better investment opportunity, they are less hesitant to let go of their units (even at a loss). This differs from genuine homeowners, who may be emotionally attached to their properties. It is advisable to get a development with a good unit mix, which caters to both homeowners as well as investors as prices are generally more protected.

Compared to an HDB flat, these projects are usually a better potential store of value. This is especially so in the long run as there is no lease decay issue. But if you’re looking for capital appreciation in the short to medium term, these may not be the best options.

That being said, we do believe there is potential for growth in the CCR provided you select the right properties.

Property Price Index (PPI) of non-landed residential properties in the different regions











Price Indices Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 (Flash)
  QoQper cent change QoQper cent change QoQper cent change QoQper cent change YoY per cent change QoQper cent change QoQper cent change QoQper cent change QoQper cent change YoY per cent change
Overall PPI 3.3 0.8 1.1 5.0 10.6 0.7 3.5 3.8 0.2 8.4
Landed 6.7 -0.3 2.6 3.9 13.3 4.2 2.9 1.6 0.5 9.5
Non-landed 2.5 1.1 0.7 5.3 9.8 -0.3 3.6 4.4 0.1 8.0
CCR 0.5 1.1 -0.5 2.7 3.8 -0.1 1.9 2.3 0.5 4.6
RCR 6.1 0.1 2.6 6.7 16.3 -2.7 6.4 2.8 2.6 9.2
OCR 1.1 1.9 -0.1 5.7 8.8 2.2 2.1 7.5 -2.6 9.3

Source: URA, Propnex Research

Drawing from the Property Price Index (PPI) in the different regions, we can see that prices in the RCR and OCR have appreciated significantly more than in the CCR in recent years. We do expect that prices in the CCR will eventually right themselves and the growth rate will catch up. We have recently also written a piece about the narrowing gap between prices of new RCR and CCR projects, which you can read here.

If CCR prices pick up can we expect prices of these boutique developments to pick up too?

Option 2: Save up to buy an additional investment property

Given that you currently own a flat, which we assume is under both your names, and have an outstanding housing loan, there are several things to take into consideration when purchasing a second property.

Loan-To-Value ratio (LTV)

When purchasing your first property, depending on your income, you may be eligible to loan up to a maximum of 75 per cent of the property value (for a bank loan). However, if you’re purchasing a second property while still repaying an existing mortgage loan for the first one, the LTV drops to 45 per cent of the property value.

Higher downpayment

As the LTV for a second property is reduced, naturally the downpayment increases. The downpayment is split into two portions; minimally 25 per cent needs to be paid in cash and the remaining 30 per cent can be paid using your CPF should you have sufficient funds.

Additional Buyer Stamp Duty (ABSD)

The current ABSD rate for Singaporeans buying a second property is 17 per cent which is on top of the regular BSD. Do note that when purchasing a private property, the stamp duty has to be paid in cash first, as this has to be done within 14 days after you have exercised the Option to Purchase (which isn’t enough time to apply for the withdrawal from CPF), and if you have sufficient funds in your CPF to pay for it, the cash will be reimbursed to you afterward.

CPF requirements

When buying a second property, you will need to set aside the following before you can utilise your CPF funds for the purchase:

  • The latest Basic Retirement Sum (BRS) if you have at least one property bought using CPF or the property that you are buying can cover you till age 95*

  • The latest Full Retirement Sum (FRS) if you do not have any property that can cover you till age 95

* If you subsequently sell the property that can cover you till age 95, you will need to set aside the FRS instead.

Also, the maximum amount of CPF that can be used for your second property depends on whether the remaining lease of this property can cover the youngest owner up to the age of 95.

Source: CPF

Let’s say you were to purchase a second property at $1 million for the sake of simple calculations:









Description Amount
Purchase price $1,000,000
25per cent cash downpayment $250,000
30per cent CPF/cash downpayment $300,000
BSD $24,600
ABSD of 17per cent $170,000

As we can see from the calculations above, the cash outlay required in order to purchase a second property is pretty substantial and it will likely take a long time to save up.

We’ve written a detailed piece on the merits of paying for the ABSD for an investment property, but in short, it’s not what we’d typically recommend.

Option 3: Upgrade to a larger flat (resale/BTO)

Being able to buy a BTO is a Singaporean privilege, and since we have two chances at it, most individuals/households will try for the second time if they are eligible. Of course, it’s much tougher the second time around given that only two to five per cent of BTO launches are set aside for second-timers. Also, the income ceiling to apply for a BTO is $14,000 which your household has unfortunately (or fortunately) exceeded so you are no longer eligible.

As you’ve mentioned you’re looking to build your retirement nest, buying a flat may not be the best investment choice. It is no doubt a good stepping stone for buyers looking to upgrade since you’d likely make some profits if you bought a BTO, or if you purchased a resale and managed to gain from the CPF Housing Grants.

Source: Edgeprop

Given the reduced supply of newer MOP flats coming onto the resale market in the next couple of years, prices of HDB prices could still hold up in the short term. But even so, it is public housing after all; prices are regulated by the government in order to keep them affordable for the masses.

Alternative option

We’ve said this many times before, but a freehold property does not necessarily mean it’s better than a leasehold, and there are many other factors that contribute to the performance of a property besides its tenure. Perhaps instead of looking at freehold options in the districts you’ve identified, you can look at leasehold options instead, which will give you more choices to choose from. And if you were to open up to other locations, you’d have even more options.

These are some available 99-year leasehold units on the market that is within your affordability:









Project District Completion year Unit type Size Asking price
Sophia Hills 09 2018 2b2b 689 $1,482,000
The Panorama 20 2019 2b2b 797 $1,488,888
Thomson Impressions 20 2019 2b2b 764 $1,500,000
Sky Vue 20 2017 2b2b 678 $1,380,000
Daintree Residences 21 2023 2b2b 679 $1,399,999

These projects are picked out based on the fact that they are in your preferred districts, and for their age, so they may or may not be the most suitable for you. We would suggest you consult with an agent for further analysis.

In the ideal situation, you’ll stay in this property for the short to medium term and if it does appreciate well over the next few year, you can then upgrade again; perhaps to a bigger unit or a freehold development, which you can then live in for the longer term. You can eventually cash out for your retirement while you right size to a smaller unit.

Conclusion

Let’s do a quick recap of the options:

For the first option of buying a freehold condominium in District 9, 10, 11, 20, or 21, your choices are rather limited and the available developments are mostly boutique projects (which as mentioned, we do have some concerns over). You will have to pick carefully, as a freehold property definitely doesn’t always mean it will be a good investment.

The second option of saving up to purchase a second property for investment will require a huge cash outlay, which may take a considerable amount of time to save up for.

As for the last option of upgrading to a bigger HDB, unfortunately, your household is no longer eligible to apply for a second BTO due to your income. Regardless, buying an HDB is not the best investment tool given that it is after all a regulated market.

We will suggest looking at some younger leasehold developments that still have the potential for growth which will open you up to more choices. You can stay in this property while you wait for it to appreciate and from there, move on to a bigger unit or a freehold development where you can stay for the long term. As you’re only in your mid-30s, you’re able to maximise the loan tenure. We get that moving might be a pain, but it’s inevitable if you wish to cash out on your property which will go towards building your retirement nest.

ALSO READ: We make $15k per month and live in a 4-room HDB flat. Should we upgrade to a condo now once interest rates drop?

Luxury real estate in Vancouver: ‘Super-charged’ condo market, but supply shortage still an issue

Luxury real estate in Vancouver: ‘Super-charged’ condo market, but supply shortage still an issue

by Luxury Real Estate

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Even the luxurious actual estate market is becoming impacted by a supply shortage in Vancouver, a report on revenue in the 1st quarter suggests.

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Sales of most assets types in the luxury classification of additional than $1 million were being down, calendar year-more than-12 months, as purchasers felt the disappointment individuals shelling out much less are also working with.

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A scarcity of provide has been blamed for climbing costs of all household kinds at all values, and that will not exclude multimillion-greenback housing.

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In a just-published report identified as “Spring 2022 State of Luxurious,” Sotheby’s Intercontinental Realty reported scarce stock was an issue just about everywhere, including in Vancouver, in the first a few months of the yr.

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In accordance to the company’s “Best-Tier Real Estate” report, all round profits of residences ordered for more than $4 million was down 14 for every cent in Q1 from the exact period previous yr.

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Searching at even pricier assets, the quantity of households offered for a lot more than $10 million was fifty percent of what it was among January and the finish of March of 2021.

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For these questioning how lots of purchasers tumble into this bracket, very last 12 months it was 6 in the a few-month interval. This calendar year it was three.

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Income of houses for more than $1 million have been down 10 for each cent, Sotheby’s reported.

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Amongst all those that even now surface unsold in this group is a residence reported to be the country’s most high-priced condominium listing. A put up from Macdonald Realty inquiring $49 million for a penthouse is still lively as of Wednesday early morning. 

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A person category was up, on the other hand. The variety of condominiums offered for much more than $4 million improved by eight for every cent, year about yr.

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Widening that to all condos offered for much more than $1 million showed even higher advancement, up 29 for each cent from 2021.

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According to Sotheby’s knowledge, 559 this sort of condos were being marketed in the Vancouver spot in advance of April this year.

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“Across Canada’s significant metropolitan regions, we have noticed remarkable product sales activity and shopper demand from customers in the luxury condominium market place this yr, leaving no question that buyer and investor self-confidence in the downtown and urban industry has been entirely restored,” Sotheby’s Intercontinental Realty Canada president Don Kottick explained in the report.

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It really is a significant quantity, considering a lot of detached solitary-family members households in the metropolis also fall into that class, but Sotheby’s claimed there were only a little extra houses marketed around the million-dollar mark – 599. This is down from very last year, Sotheby’s mentioned.

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“Regardless of potent shopper need, inadequate supply also depressed $1 million-in addition connected residence product sales, which fell 16 for every cent from the to start with quarter of 2021,” the report claimed.

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Kottick claimed heated market problems, coupled with “evaporating one-loved ones and hooked up residence supply” remaining purchasers only 1 alternative in some scenarios, anything he thinks will gas supplemental demand from customers into the summer season.

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Whether product sales of $1-million attributes really should however drop into the luxurious group in Vancouver is a further dilemma.

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It really is not a common rate for a apartment, but it is really difficult to uncover a detached household in the town and quite a few of the bordering communities for considerably less than that, even if the household is mentioned utilizing words and phrases like “expense chance” or “fixer upper.”

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In the identical interval examined by Sotheby’s the B.C. Authentic Estate Affiliation reported the average Several Listing Provider value in the province – not just in Vancouver – was $1.086 million. 

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The ordinary price tag in March by itself was even larger, at $1.096 million, up from $946,813 in March 2021.

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That’s up 20 per cent from the very same period of time past yr, even however the dollar volume and selection of sales have been down in general.

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Searching at the region designated “Greater Vancouver,” which does not involve Surrey, the 12 months-to-date typical cost was $1.325 million in Q1. During that time, 10,217 residential houses altered arms.

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And it is really not a lot more affordable in the Fraser Valley, exactly where the common among January and the end of March was $1.238 million. In Chilliwack, which is measured independently, the normal was lower, at $892,405, but that metropolis noticed the best yr-more than-year value enhance at 30.7 for every cent.

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Vancouver Island noticed a related improve in typical price of 29.7 for every cent, with the regular value now at $787,491.

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BCREA chief economist Brendon Ogmundson reported in a information launch he expects home gross sales to carry on to be decrease than they had been last 12 months, heading into Q2. He mentioned the “sharp rise” in home finance loan charges will have an effect.

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His terms came a working day before the Lender of Canada lifted its essential interest charge by the best amount of money in far more than 20 decades. 

Vancouver real estate: Luxury condo listings

Vancouver real estate: Luxury condo listings

by Luxury Real Estate

The most current report on luxury real estate in Vancouver implies the only housing variety looking at an maximize in profits so significantly this year is condominiums.

According to facts from Sotheby’s International Realty, the quantity of condos offered for additional than $1 million was up nearly 30 for each cent in the initially quarter, when in comparison to the exact period in 2021.

Just about as several condos in that category had been offered as $1-million-as well as homes, and when using into account the price tag of detached households in Vancouver, it demonstrates an increased interest in luxury homes.

In accordance to Sotheby’s, 559 condos offered between January and the close of March in the area, as opposed to 599 homes.

A single-spouse and children dwelling acquired for all-around the million-greenback mark may possibly not be a lot in the city, but a million-dollar rental is nonetheless fairly extraordinary, whether in terms of site or amenities.

Here is a rapid search at what a luxurious genuine estate spending plan can purchase in the town – no matter whether which is $1 million or $50 million – based mostly on hundreds of listings posted on Real estate agent.ca. Offered provide issues pointed out in most areas of the region’s actual estate market, it really is feasible that the listing rates are a means off what condos are truly advertising for.

Coming in at $1.009 million, this one particular-bedroom, one-toilet downtown apartment is really priced a little bit underneath the regular expense of a home in the province, if like all housing kinds. 

The listing boasts engineered hardwood, about-height doorways and windows, high priced appliances and a significant outdoor room, as effectively as “impressive views.”

Further more south, a purchaser with a little bit of income could get in touch with this one-bedroom, one particular-rest room rental on West King Edward Avenue household.

Detailed at $1.02 million, the condominium in Vancouver’s West Facet is in a 55+ constructing, and comes with a den, substantial ceilings and lots of home windows, as very well as a patio. Citizens of the constructing have obtain to an oxygenated infrared sauna, hydrotherapy tub, theatre and rooftop patio, as very well as what the listing brokers phone an “Asian & Western design cafe.” 

A consumer eager to fork out an added $9,000 could uncover by themselves in a two-bedroom-moreover-den unit with views of Stanley Park, English Bay and the North Shore Mountains. 

The vendor is asking $1.028 million for the apartment in a constructing that will allow pets and rentals, and contains access to a health and fitness center, sauna and visitor suite.

Investing all-around $1 million purchases significantly less in some neighbourhoods than some others. There ended up number of solutions in the Kitsilano spot over that mark, but this two-bed room-additionally-den on West 4th Avenue can be experienced for $1.099 million. 

Although it does have new flooring and baseboard heaters, as properly as 4 parking stalls, it does not look to have been just lately renovated outside of that. The kitchen and fire in the 1990s condominium seem dated, if not unique, as does the décor in the bogs.

The rate tag would seem generally to be tied to the proximity to Kits Beach and the neighbourhood, somewhat than the device itself.

More south, a customer inclined to devote $2.78 million could find themselves on a patio overlooking the Fraser River. 

This just-created penthouse rental has 3 bedrooms, 3 whole bogs and a powder area, as perfectly as a “gourmand chef kitchen area,” substantial ceilings, two parking stalls and two storage lockers.

Expanding the price range once again to over $4 million yields much less selections, but far more luxurious accommodations.

1 of the homes in that category is this penthouse situated in the vicinity of the University of British Columbia, outlined at $4.298 million.

The private rooftop terrace on your own is more substantial than numerous condos at 1,122 sq. feet, and it comes with walk-in closets, a “European gourmand kitchen area,” and superior-close appliances.

Those ready to expend a lot more than $10 million only have 8 possibilities on Real estate agent.ca, almost all of which are downtown.

Among the them is this a few-bedroom, 4-lavatory penthouse on Howe Street, which appears to come with a custom made Fazioli piano in its “grand salon.” 

The listing features “thoughtfully laid out floor designs” as perfectly as panoramic sights of the town, substantial-stop appliances and finishes and a dressing space that realtors assert feels “like your very own personal boutique.” It as well has a substantial rooftop terrace, this a single such as an outside kitchen area, fireplace pit, hot tub and elevator.

The condominium is mentioned at $12.88 million.

And an individual with a good deal of money to spare could shift into this penthouse apartment in Coal Harbour, stated at $36.9 million. 

Located at the top of the Fairmont Pacific Rim hotel, the 4-bedroom condo boasts, as explained by the listing, “infinite postcard sights of the water, mountains and town.”

It has two flooring, “soaring” ceilings, a personal rooftop deck, a health club and yoga area, a created-in entertainment centre and much more.

The inside of a penthouse that realtors say is Canada’s most highly-priced apartment listing is pictured. (Supplied)

Huge spenders may even be fascinated in what realtors say is Canada’s most costly apartment listing. 

Listed at $49 million, the oceanfront two-ground penthouse is the most significant apartment in Western Canada, and consists of four bedrooms, five bogs, sweeping views and two rooftop terraces.

All pictures from Real estate agent.ca except or else noted.

Tampa condo the latest to sell as NFT as crypto real estate interest grows

Tampa condo the latest to sell as NFT as crypto real estate interest grows

by Real Estate News

Last month, real estate agent Taylor Parrino represented the buyer of a home in Gulfport that was listed as an a non-fungible token in a historic sale. Now, she’s preparing for another auction — a condominium in Tampa.

Parrino has been helping prepare a small condo in Hyde Park ahead of the April 7 auction. Bids will start at $185,000 for the 600-square-foot, one-bedroom Tampa condo, according to Propy, a real estate transaction platform that advocates for the use of blockchains.

Parrino, too, sees a future where traditional mortgages and closings will be a thing of the past. She will be one of the first real estate agents in the country to partake in both the buying and selling of a property sold as an NFT. This new niche within real estate is growing in Florida — and Tampa Bay is leading the charge — which integrates blockchain and cryptocurrency as a way to buy and sell seamlessly, she said.

Her focus right now is on marketing the technology.

“It’s primarily educational,” said Parrino, who is based in Miami with Premier Elite Realty. “So people understand what we’re doing.”

Related: A guide to crypto, NFTs and the metaverse for those hiding in a hole

Tampa realtor Andrew Daniels described blockchain as a decentralized version of the county clerk’s office. Non-fungible tokens, or NFTs, are similar to a deed, but it doesn’t replace it. In theory, NFTs are certificates of authenticity that can’t be manipulated. Every action that’s logged on the blockchain, stays on the blockchain.

A photo of a condominium at Hyde Park Place II that will be auctioned as an NFT, according to Palo Alto- based real estate platform Propy.
A photo of a condominium at Hyde Park Place II that will be auctioned as an NFT, according to Palo Alto- based real estate platform Propy. [ Courtesy of Propy ]

The Tampa condo will have its rights stored in an NFT by converting ownership into a company that owns the property. The current owner is technically selling the company, not the house. This way allows for faster transactions and fewer costs associated with inspections and closings, according to Propy.

Real estate agents who spoke with the Tampa Bay Times described traditional real estate transactions as arduous. They said the industry is in need of a revamp. Each home sale requires plenty of documents, inspections, title searches and signatures that all add up in fees.

Propy, which is based in Silicon Valley and has operations in South Florida, assists the realtors and owners in making sure the property is ready to become an NFT so all future sales can be more efficient. Propy hosted the auctions of TechCrunch founder Michael Arrington’s apartment in Kyiv last year and the Gulfport home which sold for $654,000, or 210 ethereum, in February.

Parrino said the new owner in Gulfport, a Florida resident who was listed as the username “A.J.,” purchased the property because she was looking for a way to spend her Bitcoin. She plans to live in the home. Ownership transferred instantaneously, Parrino said.

The former owner Leslie Alessandra, the CEO of Tampa blockchain company DeFi Unlimited, said the price to transact ethereum, a type of cryptocurrency, was “significantly” cheaper than typical closing costs, to the tune of tens of thousands of dollars.

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After the Gulfport auction, which was the first U.S. property sold as an NFT, the Tampa condo would be the next in a release of about 10 properties across the country through Propy. The real estate firm chooses homes that have “collectible” attributes like unique architecture, location, artwork or historical relevance. Propy purchased the Tampa property in January for $215,000, according to county property records. The auction will be done using USDC, a cryptocurrency pegged to the U.S. dollar, and buyers need to confirm their identity before participating.

The condo is part of Hyde Park Place II, a complex at 1000 W Horatio St., and has one bedroom and one bathroom. It also has a fireplace, balcony and the building features a pool and spa, Parrino said. The condo is attractive because it’s just minutes away from downtown Tampa, she said.

“Hyde Park and Tampa are growing. We just see a lot potential there for that area,” Parrino said. “It’s just a great spot to offer something like this.”

Real estate is the next frontier in the world of blockchain, said Balaji Padmanabhan, a professor at the University of South Florida’s Muma College of Business. A real estate and crypto ecosystem is starting to form and Florida has the right ingredients for it, he said. As home prices have skyrocketed across Tampa Bay, with the median sales price soaring by 24 percent as of February, now is a ripe time to experiment with ways to buy and sell — for those who can afford to take on the risk.

Owner Leslie Alessandra checks her phone before the start of the auction of her five-bedroom, 3.5-bath Gulfport property being actioned off as the first NFT house to be sold in the U.S with a starting bid of about $650,000. An NFT is defined as a non-interchangeable unit of data stored on a blockchain, Thursday, Feb. 10, 2022 in Gulfport.
Owner Leslie Alessandra checks her phone before the start of the auction of her five-bedroom, 3.5-bath Gulfport property being actioned off as the first NFT house to be sold in the U.S with a starting bid of about $650,000. An NFT is defined as a non-interchangeable unit of data stored on a blockchain, Thursday, Feb. 10, 2022 in Gulfport. [ MARTHA ASENCIO-RHINE | Times ]

Most homes in Pinellas County sold for more than $411,000 in February, according to data from Florida Realtors. In Hillsborough, the median was $392,000. Pasco County has seen prices increase by 30 percent in a year to a median of $360,000.

Local leaders are taking notice too and are inviting innovation. Miami Mayor Francis Suarez said “the next era of business will be defined by the ways we leverage technology to our advantage and the real estate industry is no different,” at Propy’s Crypto & Real Estate Summit last week.

“We’re here in the right place at the right time,” said Daniels, the Tampa crypto-certified real estate agent. “It’s nice having grown up here and seeing the growth that we’ve been experiencing.”

Daniels got his certification through Propy and plans to be a leader in real estate and blockchain in the Tampa Bay area. He’s currently working on helping a client add a QR code on a deed that would link to the blockchain where more information would be stored. He’s also in the process of setting up a consultancy agency.

“There is a big learning curve and a lot of education that’s needed to be put out there. That goes with any new technology,” Daniels said.

Bitcoin was the first application of the blockchain and “it actually worked depending on who you talk to,” said Padmanabhan from USF. Now people who invested are starting to look for ways to use the money they earned in those investments.

Related: Clearwater Beach has a new crypto-themed restaurant with ‘Dogedog’ hot dogs

NFTs began gaining attention in the art world after a Christie’s auction fetched $69 million for a digital collage last year. But skeptics still say there’s no point to NFTs if a digital image on the internet can be copied. To some, NFT ownership is merely “digital bragging rights” for an owner, Padmanabhan said. But with real estate, there’s a real, tangible asset involved that can’t be copied.

There’s also a cultural factor, Padmanabhan said, that could help drive more people to adopt the technology. Younger people expect transactions to be faster and easier. Generally speaking, they also have less trust in traditional institutions.

“If you can create a digital equivalent of that house, store it on the blockchain, then you can get all the advantages of having both the decentralization and speed,” Padmanabhan said. “Does it have to be done this way today? Ideas like this need to be tried out.”

One group of people in Tampa Bay are hoping to do just that.

Late last month, about 50 people gathered for the launch of New Wealth CoLab in Tampa. Volunteers explained how to sign up for membership through an NFT. A man in a dollar-print suit networked with other crypto enthusiasts and the former owner of the Gulfport home gave a presentation about her experience with the sale. The New Wealth CoLab is a coworking space for real estate professionals interested in cryptocurrencies and NFTs.

“We can take these houses that we’ve been selling the old-fashioned way and start experimenting. We are willing to make a little less to create that mass adoption,” said USA Portfolio Real Estate president and founder Brandon Middleton. “And to work out the kinks as a collective instead of just one.”

Middleton said he wants to create a space where local title companies, attorneys, contractors, and real-estate agents can meet and collaborate. Membership will also be sold as an NFT that could appreciate in value as the lab grows, he said.

Some guests at the open house at 4007 North Taliaferro Ave., said they were hesitant about dipping their toes in the water since it’s so new.

“Crypto is a great, well, personally I think it’s the way of the future and marrying that with real estate is also pretty interesting and intriguing,“ said a Tampa-based real estate investor Dolmar Cross. “But I would be more comfortable seeing a couple more transactions happen.”

In addition to NFT properties, people discussed borrowing against crypto assets for mortgages, fractionalizing properties, including royalties in crypto-real estate transactions and integrating escrow services and title insurance onto the blockchain. These ideas pose significant challenges at this early stage. Currently, transactions have only been done with cash and no additional financing.

A photo of a condominium at Hyde Park Place II that will be auctioned as an NFT, non-fungible token, according to Palo Alto- based real estate platform Propy.
A photo of a condominium at Hyde Park Place II that will be auctioned as an NFT, non-fungible token, according to Palo Alto- based real estate platform Propy. [ Courtesy of Propy ]

While blockchain use in real estate is far from mainstream, Pinellas County property appraiser Mike Twitty said he’s keeping an eye on it after the Gulfport auction.

The blockchain can be effective for recording documents and title changes over time, but he said if NFT homes become commonplace it could become overwhelming for local property appraiser staff to assess property values and ensure tax payments are made.

“It’ll take more resources to be able to comb through records or try to find these transactions that are occurring on the blockchain. And where do you look on the blockchain? There isn’t just one,” Twitty said.

His main concern was “fractionalization,” where property rights are split and shared. If there are 20 people with different interests in one house, he said it could over-inflate values.

“We have to pick and choose because blockchain technology doesn’t mean it’s best practices for everything,” Twitty said. “There’s a cost to put everything on the blockchain and then a cost to retrieve it.”

GLOSSARY:

Cryptocurrency is new and growing in popularity, but is a bit complex to understand. Here’s a glossary of common terms.

Blockchain: A digital ledger that records information by duplicating transaction records and sharing it on a network of computers. This process makes it “decentralized” and difficult to manipulate. It’s similar to the way Google records changes to an online Google Document, except it’s not run by any specific corporation. The coding allows for cryptocurrencies like Bitcoin to exist.

Cryptocurrency (crypto): In short, digital money. But technically, it’s a string of code encrypted to measure a unit of value. Its key feature is that it’s on the blockchain, so theoretically no authority figure like a government can create more or manipulate the value (in most cases, some countries have their own crypto).

Ethereum (ETH): It’s the second-most popular cryptocurrency after Bitcoin. While the Bitcoin blockchain was designed solely for exchanging money, Ethereum’s platform allows for more functionality, like smart contracts, which is why the seller of the Gulfport home used this crypto for the auction.

Smart contracts: When two parties, like a buyer and a seller, agree to terms that are written in code, which is then stored on the blockchain.

Non-fungible token (NFT): A digital asset that has its own code and metadata and can’t be replicated. It’s commonly used for art and other types of collectibles.

Minting: The process of taking files and putting its information on the blockchain. In order for a physical property to be minted as an NFT, the home seller and organizations like Propy would gather any documents related to the home, like a deed or title, and put the rights under a limited liability corporation. The ownership of the LLC would then be minted and exchanges can take place over the blockchain.

Fractionalization: The process of splitting and selling a percentage of ownership for an NFT.

Take a look at this two-level Dallas penthouse condo at the Vendome

Take a look at this two-level Dallas penthouse condo at the Vendome

by Luxury Real Estate

What do you do when you want the space and amenities of a luxury home but you don’t necessarily want a large property to maintain? Look up. This penthouse unit at the Vendome on Turtle Creek offers the square footage and privacy of a large home, but it’s set high in the sky. The condo has 6,638 square feet of space with an elevator that opens directly into the unit’s foyer.

Listing agent Kyle Crews of Allie Beth Allman & Associates said the size and finish-out of this unit make it feel like a custom home in the sky.

“It’s ideal for someone that has decided they want high-rise living but aren’t ready to give up the space for their furnishings and possessions,” he said.

Residents at the Vendome have access to amenities like a pool, a fitness center, guest suites that overnight visitors can use, a business center, a concierge, a doorman and a 24-hour valet service. This penthouse unit also has four assigned parking spaces in the building’s garage.

The two-level condo has four bedrooms, four bathrooms and two half-bathrooms. The lower level of the unit includes the main living spaces — a living room, dining room and kitchen — plus the primary suite, a study and a half-bathroom. The open-concept living and dining room has access to a terrace, plenty of views of the city and a wet bar on one side of the room.

Take a look at this penthouse condo at the Vendome, 3505 Turtle Creek Blvd. Unit 18C in Dallas.

1/11Take a look at this penthouse condo at the Vendome, 3505 Turtle Creek Blvd. Unit 18C in Dallas.(Costa Christ Media)

The kitchen includes a large island with space for seating, plenty of cabinet storage and access to a pantry and utility room, according to the floor plan. The primary suite is spacious with room for seating areas and has access to a second terrace. The primary bathroom has a separate bathtub and shower, two sinks and a walk-in closet with built-in cabinets and storage space. The study, or second living room, on this level has access to the same terrace that connects to the primary suite.

Upstairs, there are three guest bedrooms with en suite bathrooms. A large game room has a wet bar complete with a dishwasher and a small burner and space for multiple seating areas. There is also a media room and a powder bathroom. The wine room with storage for 2,200 bottles is also on this level.

Both levels of the home are accessible from an elevator or a staircase.

3505 Turtle Creek Blvd., Unit 18C, is listed for $6,500,000. Crews said the unit could also be leased fully furnished for $35,000 per month.

This is part of our Posh Properties series, providing a glimpse inside nice homes in North Texas for those who love to look at houses. It is not paid for or presented by area real estate agents or companies.

Looking for more Posh Properties stories? Follow Mary Grace Granados on Instagram, go to our luxury real estate page or subscribe to our free weekly newsletter.

Is a Condo a Good Investment?

Is a Condo a Good Investment?

by Investment Property

Weighing the selections of obtaining an financial investment property amid today’s quick-transferring market place can be a difficult determination, in particular when considering…

Weighing the selections of paying for an expenditure assets amid today’s speedy-relocating market place can be a complicated conclusion, particularly when looking at the many kinds of houses obtainable in today’s industry. Condos have been tested to be a terrific possibility for investors seeking for expense options with minimal upkeep requires, especially in comparison to single-household properties which have a tendency to have to have repeated updates and servicing. Buyers should be knowledgeable of the possibilities. Single-relatives homes could have the ideal fork out-off in numerous markets, as opposed to condos, on the other hand.

[Read: How to Become a Landlord]

The Execs of a Apartment Financial investment

Amid the pros, condos in normal tend to be less costly than single-spouse and children households, indicating there is a more compact selling price tag connected to the first invest in selling price.

In addition to being usually more affordable, proprietors are likely to have fewer repairs requires to take into account, as the exteriors of most condos are normally managed by the owners association that oversees the qualities. These associations demand an HOA rate to take care of ongoing fees, but make it much easier for traders on the lookout for a arms-off method. Investors really should deeply take into account their potential expense property’s HOA rate, as some communities might require extra in comparison to other folks.

Shared features like pools, fitness centers, recreation rooms, park spots, pet parks and additional are interesting to a lot of city and suburban buyers on the lookout to simplify their existence. These can all be fantastic additions when traders glance to funds in on their financial investment.

The Drawbacks of a Rental Financial commitment

While condos have their advantages, as with any expenditure, they also have their downsides.

HOA costs can differ enormously and are up to the discretion of your association. If the affiliation would like to make alterations to the exterior of the creating or the surrounding qualities, you may possibly conclusion up paying out for these updates for the duration of your investment.

If you’re hunting to hire out the condominium whilst generating changes, be absolutely sure to know what conditions you may possibly be under in advance of acquiring, as some rental communities don’t let for quick-term rentals or extended-phrase renters.

On top of that, the HOA can in some cases have a say in what upgrades you could approach to make to the assets, so be confident you diligently browse the HOA agreement in advance of acquiring.

[Read: What is the Maximum Price I Can Afford for a House?]

What is in Shop for the Rental Sector?

Single-family members residences in basic have a tendency to respect at a larger rate than condos, nevertheless recent data from the National Association of Realtors implies that hole was wider in 2021, with one-spouse and children households outpacing gross sales selling price progress over condos, probable a end result of lots of in search of more substantial spaces amid versatile doing work problems.

Although prices for single-family residences have amplified 13.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} since Oct 2020, condos have viewed an ordinary price tag rise of 8.7{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} in the U.S., in accordance to NAR.

This craze also retains correct for former decades which include 2020 wherever condos observed a 6.3{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} increase in revenue price tag nationally yr-over-calendar year, as opposed to solitary-relatives properties with an 8.5{d4d1dfc03659490934346f23c59135b993ced5bc8cc26281e129c43fe68630c9} improve in price tag, for each NAR knowledge.

How A lot Can You Afford to pay for?

As with any expense, generate an in-depth spending plan just before you start your household or condominium search, weighing your regular charges on major of other investments you may perhaps have.

If you’re setting up to use a property finance loan to order your investment home you should sit down with a mortgage skilled just before beginning your search to focus on the expenses and additional costs essential in your personal loan expression.

Getting a condominium can have distinctive expenditures affiliated depending on wherever you are obtaining. For occasion, for these looking to make an financial commitment in New York City, several condos and residences are represented by co-ops. In other text, they’re owned by a corporation. If you’re on the lookout to order a co-op home you may possibly have more hoops to soar through, as you will technically be buying shares of the company, fairly than obtaining the actual residence. In quite a few instances, a prospective vendor will spend a flip tax, among the other moving costs, in buy to listing the house all over again soon after investing in changes.

Any variations to the creating accredited by the board will be passed down to any person included in the co-op. So be absolutely sure to meet up with with an expert to weigh the choices and probable bills or expenses involved with a co-op or rental purchase in your distinct market.

[Read: Should I Buy a House Now?]

Are Condos Value the Financial commitment?

With interest prices remaining reasonably lower, obtaining an financial commitment residence, in particular a apartment, could make for a terrific long run expenditure, but you must be confident to weigh your options and make contact with specialists community to where you’re searching to purchase, no matter whether that is a serious estate agent, authentic estate lawyer, economical advisor or other business qualified.

One-loved ones homes have revealed promising progress amid the pandemic, but condos could make for a terrific flip task if you are searching to change about a property immediately. However, the quickly-mounting development of single-household property prices could guide to a greater return than most condos, relying on the industry.

As with today’s quick-growing and normally inflated genuine estate selling prices, customers ought to consult with a real estate agent who is aware of their sector and can suggest on the financial investment in line with their clients’ requirements. An agent can furthermore get in touch with a home finance loan expert to much better gauge what their legitimate value assortment may be.

A lot more from U.S. News

How to Determine Where by to Reside

How Prolonged Does It Acquire to Invest in a Home?

Your Guideline to HOAs

Is a Rental a Good Financial investment? initially appeared on usnews.com