Do You Gain or Lose If You Buy a Property and Sell It at the Same Price After 5 Years?
- Stuart Chng
- Dec 29, 2025
- 3 min read
Many people believe that property investing is only profitable if prices rise. But is that really true?
Let’s test your understanding of property investments with a simple question:
If you buy a property today and sell it at exactly the same price five years later, do you make money or lose money?
Take a moment to think about it before reading on.
Property Investment Basics: What Really Matters
Successful property investing is not solely about capital appreciation. In fact, one of the most important ways to reduce investment risk is to ensure your property generates a stable and sustainable income stream.
Markets move in cycles. No one can consistently predict whether the market will be bullish or bearish when it’s time to exit. That’s why seasoned investors focus on cash flow and fundamentals, not speculation.
Key Assumptions for This Scenario
Before diving into the numbers, let’s clarify the parameters of this example:
This is a rentable investment property, not owner-occupied
The property is selected based on strong fundamentals:
Right entry price
Growth potential
Proximity to amenities and transport
Strong tenant demand
Healthy rental returns
The unit is rented out continuously for 5 years
Rental yield is 4% per annum (yes, these still exist — especially when chosen carefully)
The Purchase Breakdown
Assume the buyer purchases a property priced at $1,000,000 with the following structure:
Purchase Price: $1,000,000
Cash/CPF Downpayment (20%): $200,000
Bank Loan (80%): $800,000
Buyer’s Stamp Duty: $24,600
Legal Fees: $3,000
Total initial cash/CPF outlay: $227,600
Rental Income Over 5 Years
With a 4% rental yield:
Annual rental income: $40,000
Total rental collected over 5 years: $200,000
This rental income is used to cover the following expenses:
Expenses Over 5 Years
Loan interest: $59,820
(Average interest of $997/month over 60 months)
Maintenance fees: $15,000
($250/month)
Property repairs: $5,000
($1,000 per year – a conservative estimate)
Rental brokerage fees: $8,915.80
(½ month per year including GST)
Net Rental Surplus
After deducting all expenses:
Net rental profit over 5 years: $111,264
This amount represents passive income and equity built, even before selling the property.
Selling the Property at the Same Price
Now comes the interesting part.
Assume the property is sold after 5 years at $1,000,000, exactly the original purchase price.
Sale Breakdown
Selling Price: $1,000,000
Outstanding loan balance: $689,955
Agent commission (2% + GST): $21,400
Legal fees: $3,000
Net cash/CPF proceeds from sale: $285,645
The Final Result: Gain or Loss?
Let’s compare the numbers:
Initial cash/CPF invested: $227,600
Cash/CPF received upon sale: $285,645
Return on equity: 25.5% over 5 years
And this is achieved without any capital appreciation at all.
Not bad for a “flat” market, wouldn’t you agree?
Why Does This Work?
There are two key principles that experienced property investors understand:
1. OPM – Other People’s Money
Using bank financing allows you to control a high-value asset with a relatively small amount of capital. When used responsibly, leverage can significantly enhance returns.
2. Positive Carry
When rental income comfortably covers financing and ownership costs, the property produces a positive yield — even during unfavourable market cycles.
Final Thoughts
This example highlights why real estate remains a powerful long-term wealth-building tool. Few investment assets offer:
Stable income
Strong downside protection
High leverage
Inflation hedging
Long-term capital growth potential
Education is the first step to investing wisely. With the right knowledge and strategy, property investing can play a meaningful role in accelerating your financial and retirement goals.
What do you think — gain or loss?
Share your thoughts in the comments, and feel free to pass this article along to anyone who could benefit from understanding how property investments really work.
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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