5 Ways For Property Owners To Tide Through Crises (Updated)

5 Ways to Tide Through Difficult Times Using Your Property
Find out how your property can serve as your lift raft during tough times.

So it's been awhile since the 1st COVID-19 case touched down on our shores.

Sadly, many lives have been lost around the globe, and many more livelihoods affected.

At this point in writing, perhaps no end is yet in sight and only God knows where we will be when this storm finally passes us.

These days, the media is covered in nothing much of interest more than COVID related news; politics has taken a back seat, trade war and bitter disputes between rival nations are on hiatus and perhaps the only good thing out of this is that everyone around the world, regardless of status, wealth, nationality and race are united in a common cause to beat the pandemic.

covid-19 singapore property correction
Slow down humans.. My way is higher than yours

Perhaps it is a divine way to wake us up to our excesses and sins, to put us in our place and to restore what should be most important in our lives - our health, our family and our community.

The services of those in underappreciated roles in society such as cleaners, drivers, front-line service staff, supermarket employees, security, deliverymen etc are the very ones carrying the bulk of the weight today to help our community function as well as it possibly can.

As the rest of us begin social distancing more amid the stricter measures imposed, jobs losses in many industries will have the next huge impact on the livelihoods of our community.

Through this article, I hope that those who will be or are going through difficult times will find some methods helpful for their families to cope with the storm ahead.

If you're the type who likes just the 5 points briefly, without elaboration, this is it:

1. Equity loans

2. Refinancing and/or stretching your loan tenure

3. Mortgage deferment schemes

4. TDSR Waiver for properties with <50% loans

5. Sell and downgrade or rent temporarily

Otherwise, read on for an explanation of each.

5 Ways for Property Owners To Tide Through Crises

property equity loan interest rates
Drawing out equity from properties has been one of the most beloved ways to obtain liquidity.

The 1st Way: Using equity loans from your property to provide temporary cash flow

For private and commercial property owners who have an income (or sufficient assets to pledge), you can take out a low interest equity loan to help you cope with immediate cash flow requirements.

This is especially suitable for business owners who are facing a drought In their retail or F&B business or for those who need to standby some funds for the days ahead to make ends meet.

HDB owners unfortunately, are not able to take out equity loans with their flats as the regulations prohibit this.

The cost of equity loans are as low as mortgage loan rates and range from 1.3% to 1.7% at this time of writing.

Although this increases your monthly installments as you’re effectively increasing your outstanding loans, the lump sum can solve many of your pressures today.

Paying off your other higher interest rate loans are one instant way to save money if you have not already done so and i highly encourage it.

Take note though that CPF funds cannot be used to pay for your equity loan installments. Only cash is allowed.

As evident in past crises, margin calls on properties, unlike in stocks, are historically less likely to happen even if property prices were to depreciate so you should have more breathing space even if that happens.

refinance and stretch tenure method property
Stretching the length of your home loans can offer you respite from cash flow issues.

The 2nd Way comprises 2 parts: Refinancing your loans to lower interest rates and/or stretching the loan tenure at the same time

Interests have once again dropped to new lows in Singapore as we track the interest rates of the US, which recently cut rates to zero.

Current mortgage loan rates are as low as 1.3-1.4% and it would be silly not to refinance your loans and save on interest rates if you are