In property market today, in more popular areas in Singapore, land cost would cost above SGD4, 000 per square foot and well-sought leasehold property already cost close to SGD3, 000 per square foot.

We are asking the price of S$4.3 million negotiable. We can help to give our view points to the potential of this property but it will not to be in anyway construed as our commitment to our buyer or promise of anything mentioned in this context therein or calculations stated in this document.

For calculations purposes, we like to assume the sale price of S$4.0 million as the sale price of the property.

Sale price $4,000,000

Say the buyer pays 30% as deposit $1,200,000

Balance on bank loan $2,800,000

After 6 years of payment (assume)

$2,800,000 - $2,437,967.66 $362,032.34

Amount $855,435.38

Savings of rentals over 6 years on owner occupy premises

$15,000 x 6yrs x 12 months $1,080,000.00

NOTE: Straight savings from rental expenses is $1,080,000 - $855,435.00

Amount is then $224,565.00

In this context, we assume a sale price of $4,000,000

20% Deposit (standard requirement) $800,000_

$3,200,000

We suggest that instead of 20%, it is useful to start with 30% deposit as follows:

So $4million - $1.2million (30% deposit amount), the balance is $2.8million.

Under normal practices, the bank can provide the mortgage loan over a period of 30 years. We shall take a look into the first 6 years for our initial calculations. We choose 6 years period when we take into account that as a foreigner buyer, you may want to review your employment position after 6 years. At the same time, it gives you he flexibility to decide whether to stay on or to leave the country. It is also a good timing to review the holding and financial position as it stands at this juncture.

Based on the monthly rest loan repayment schedule over the 6 years, the loan outstanding stands at $2,437,967.66

So, $2,800,000 - $2,437,967.66 =$362,032.34

Total interest paid over the 6 years =$493,403.04

Total cash outlay is _ $855,435.38

REVENUE generated from Rental Income

Rental value of $15,000 per month X 6years X 12months = $1,080,000

Hence nett surplus resulting from rental revenue receivable excluding total cash outlay is therefore $1,080,000 - $855,435.38 = $224,564.62

The positive indication shows that even if you were to buy the house instead of paying rental, here is still a surplus over this period of time. It can be a good hedge against the infamous sub-prime problems, which we are facing now.

IF YOU DECIDE TO SELL THE HOUSE AFTER STAYING FOR 6 YEARS, WHAT WOULD BE THE ESTIMATED VALUE THEN ON THE SALE PRICE, BASED ON THE CURRENT SITUATION (NOV 2007) AND EVERYTHING ELSE BEING EQUAL.

LATEST REFERENCE

Based on the Sunday Times report on the 18 th November 2007.

Page 5 ~ Article on property at Lornie 18 by Clydesbuilt Group.

“The freehold strata-titled bungalows here, each ranging from 4,000 to 5,000 sq ft, are priced starting from S$5.55 to S$6.0 million. This is fantastic value from just S$1,200 psf for this location. Expected rental is about 4%, which works out to S$18,000 to S$20,000 per month easily upon completion at the end of 2008.”

Sunday times on 18 th November 2007 ~ page 17 ~ Latest Landed Home

District 10 Sixth Avenue 99yr Semi-Detached Bungalow S$716 per sq ft sold.

District 16 Sea Breeze Rd 99yr Semi-Detached Bungalow S$546 per sq ft sold.

Kew Heights 99yr Detached Bungalow S$531 per sq ft sold.

District 23 Burgundy Crescent S$557 per sq ft sold.

99yr Semi-Detached Bungalow

CURRENT REPLACEMENT COSTS FOR HOUSE 35 PINEWOOD GROVE

6,600sq ft land @ S$550psf =S$3,630,000

4,219 sq ft Built-In @ S$450 psf =S$1,898,550

Total constructions =S$5,528,550_

COMPLETE OVERVIEW OF THE SALE OF 35 PINEWOOD GROVE AS OF 6 YEARS DOWN THE ROAD

Total construction costs S$5,528,550

Plus 6 years rental savings,

Based on owner occupy S$1,080,000

S$6,608.550

Actual cash outlay, based on S$4.0 million

S$2,175,435.38

Round up, say, S$2,175,435.00

If one were to take the real value over 6 years and minus the purchased price without taking into consideration of capital gains over the 6 years, then

S$6,608,550 – S$4,000,000 = S$2,608,000

In terms of ROE ( Return on Equity ) is

S$2,608,000 divided by S$2,175,435 = 120%

If we take a bold step to guess reasonably at the cost of $1,300 per sq ft in 2013, the value of this property could well be S$8,580,000.00!