3 Alternative Financing Strategies for Property Investors
- Stuart Chng
- Dec 29, 2025
- 5 min read
Updated: Jan 9
It’s always rewarding to see my writing shared with passionate real estate investors and fellow industry professionals.
A Huge Shoutout and Thank you to the Team (Sandy Goh, Sabrina Tan, Romesh Navaratnarajah, Denise Djong, Agnes Goh!) at PropertyGuru for the coverage!
Below is the full, unabridged version, updated for clarity and readability.
Introduction: Why Singaporeans Love Property
Let’s be honest—Singaporeans have a deep-rooted love for property.
For many, real estate represents long-term capital appreciation, a reliable source of rental income, and the dream of retiring on steady monthly cash flow. Beyond that, property portfolios can be passed down through generations, providing inflation-resistant income for loved ones.
In some families, this passion runs even deeper. There are those who own multiple shophouses or large tracts of land in prime areas and still feel compelled to acquire more. While this may seem excessive, it’s understandable.
Over Singapore’s relatively short history, many parents and grandparents experienced dramatic wealth growth simply by buying property early. That success story became embedded in our culture, making real estate the preferred destination for hard-earned savings.
However, a strong appetite for property can be both beneficial and risky.
On one hand, property demand drives economic growth, job creation, and infrastructure development. On the other, excessive leverage and speculation can lead to financial instability—something the world witnessed during the US subprime mortgage crisis.
This is one of the reasons Singapore introduced cooling measures and tighter loan regulations, shaping the current property investment landscape.
As a result, many investors today are actively exploring alternative financing strategies to continue building their property portfolios within regulatory limits.
In this article, we examine three commonly used alternative property financing methods that investors may consider.
1. Co-Investment Strategy
For single buyers who lack sufficient funds to purchase a property independently, co-investing with a trusted friend can be an option.
By pooling cash and CPF savings, two individuals can enter the market earlier instead of waiting years to accumulate additional capital—especially important given loan tenure limitations.
Key Considerations and Risks
While co-investment may sound attractive, it comes with significant long-term implications:
If either party gets married, they will be ineligible to apply for a BTO flat or executive condominium unless the investment property is sold at least 30 months in advance
Purchasing a private property as a matrimonial home requires setting aside half of the CPF Full Retirement Sum (e.g. $110,200 at the time of writing) before excess CPF funds can be used
Buyers may not qualify for a high amount of loan if they already have an outstanding mortgage
Additional Buyer’s Stamp Duty (ABSD) will apply
Selling within three years triggers Seller’s Stamp Duty (SSD)
Most importantly, co-investing only works if both parties share long-term alignment. Any future sale requires mutual consent, and an early exit could strain even the strongest friendships.
Proceed with caution.
2. Equity Loans (Term Loans or Gearing Up)
Equity loans allow property owners to unlock the value accumulated in their properties over time.
These loans are commonly used by business owners to fund short-term needs such as inventory purchases or equipment upgrades. Others use them to refinance higher-interest liabilities like credit cards or car loans.
How Investors Use Equity Loans
Although equity loans are officially not meant for property investment, it is widely understood among experienced investors that enforcement is limited.
Owners with low or fully paid properties often use this strategy to:
Release dormant equity
Improve return on equity
Take advantage of low interest rates
Reinvest funds into higher-yielding assets
Interest rates are typically comparable to mortgage loans, making equity loans a relatively affordable financing option.
Important Caveats
CPF cannot be used to service equity loan repayments
Monthly instalments must be paid entirely in cash
Borrowers assume risk if loan terms are breached
Banks will still conduct credit and risk assessments
This strategy is best suited for financially disciplined investors with strong cash flow buffers.
3. Asset Pledging
Before the introduction of Total Debt Servicing Ratio (TDSR) rules in June 2013, asset-based lending was widespread. Investors with substantial cash holdings could obtain large loans without proving income sustainability.
Those days are long gone.
Today, asset pledging exists within strict regulatory boundaries and is generally classified into liquid assets, such as:
Singapore dollar deposits
Fixed deposits
Stocks and bonds
Foreign currency holdings
Gold
When Asset Pledging Is Useful
Asset pledging is most commonly used when an investor:
Has insufficient or no income
Is cash-rich but fails standard TDSR assessments
In such cases, pledged assets are used to augment income levels, helping borrowers meet regulatory loan requirements if they do not have enough income to qualify for a loan.
Key Rules to Note
Assets pledged for 4 years or more are recognised at 100% value
Assets pledged for less than 4 years are subjected to a 70% haircut
For an unemployed borrower:
Every $100,000 loan requires $36,000 pledged for 4 years
Or $120,000 if pledged for less than 4 years
This approach requires substantial capital and is typically used by high-net-worth individuals or families with strong financial backing.
Final Thoughts
Optimising capital usage and structuring financing intelligently are essential skills for long-term property investors. The earlier your funds are put to work efficiently, the greater the compounding effect over time.
Beyond the methods discussed here, there are more advanced strategies often shared at investor networking sessions—many of which are too complex to detail in a single article.
Property investment is a long-term journey that rewards patience, education, and continual refinement of strategy.
If you’re seeking clarity on the best financing options for your situation, feel free to reach out for a discussion.
Did this article help you better understand your options?
If so, like, comment, and share it with friends who may benefit from these insights.
Stuart Chng, Executive Group District Director at Huttons, is a renowned leader and personality in the real estate industry.
He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.
Professionally, he is a licensed real estate agent, an avid stocks, options and real estate investor, business owner, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.
Throughout his career, he has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively. Read his clients' reviews here.
Stuart has also coached many top million dollar producing agents from top real estate agencies in Singapore. Read his agents' reviews here.
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