This article was first published by Cheerfulegg.
Someday, I’m gonna sit my 4-year old son on my lap and tell him, “Son, there comes a time in every boy’s life when he becomes a man. For me, that was in October 2015 when I bought my first house.”
My son will look at me with pleading eyes and go, “No dad, not that story again! I wanna go watch X-Men.” But I’ll simply ignore him and launch into a long monologue about my life, How I Met Your Mother-stye.
Sooooo I just got the keys to my resale flat last week. It’s a crazy significant milestone, so I wanted to share this special life chapter with you.
You might be curious: Why did I choose a resale flat over a BTO?
Does it mean that resale flats are “better” than BTOs? ‘Course not! Everyone has different needs and expectations. But if you’re in the midst of making that Big Housing Decision, it’s good to have as many perspectives as possible.
So here’s why my fiancee and I chose a resale flat over a BTO:
1. We Had A Budget
Before we started our house hunt, I had very a specific criteria in mind: Everything (taxes, renovation, furniture, etc) had to fit within a $500K budget. This isn’t some magic number; it was just something I could comfortably afford. It might be too low or too high for you.
But why such a conservative budget? Isn’t your first house an “investment”? No, it’s not:
- If you sell your house, you’ll need to buy another one to live in (it’s amazing how virtually nobodythinks about this)
- It’s really difficult to “trade down”, so you’ll likely use the money to buy an even more expensive house
Aren’t resale flats more expensive than BTOs? Well, yes, and no.
Yes, because BTOs are subsidised by the government. No, because as first-time buyers living near our parents, we qualified for the CPF Family Housing Grant and the Proximity Housing Grant. (The former doesn’t apply to BTOs because they’re already subsidised).
With the grants in place, we were able to significantly reduce the cost of our home. In fact, we got it at a price that was waaaaaayyyy lower than several BTO projects we were considering.
2. We Wanted To Live Near An MRT Station
So she really, really, really wanted to live near an MRT station. Her criteria? “No longer than 7 mins or 500m, whichever is closer”. I know.
In Marriage Preparation Course, I learnt that it’s critical to listen to my future spouse. Better to give her what she wants now than to suffer 40 years of whacking because she’s frustrated from taking the bus.
In all seriousness, living near an MRT station rocks. It means easy access to supermarkets, the library, coffee shops, and the occasional pasar-malam. Ramly Burger ftw! My fiancee’s dad joked that we don’t need a storeroom because our “storeroom” is the 24-hour NTUC which is 5 mins walk away.
It’s also good for the kids so that he/she doesn’t have to take 16 hours to come back from school.
And that’s the great thing about a resale flat: You get to choose your location. You get to decide where you wanna be on the convenience/price trade-off.
3. We Wanted To Live There For The Long-Term
The whole housing process is a pain in the butt. The whole thing – from the house-hunting, to the negotiations, to the renovations, etc – is needlessly annoying and frustrating. Not to mention… expensive!
Which is why we decided that we’re not moving anytime soon. It means that this needs to be a place we could live in for the next 20, 30, 40 years.
That also means making enough room for kids, in case they happen.
BTO flats are small. I’m don’t say it in a condescending way – they’re objectively smaller than the older resale flats. A 4-room BTO flat usually has 3 bedrooms, but many couples choose to knock down one wall because they feel the Master bedroom is too claustrophobic. That leaves just one bedroom for kids, which isn’t enough if you have a boy and a girl who want their own rooms.
Buying an older resale flat means that we comfortably have 3 bedrooms, enough for one kid’s bedroom and one study, or two kids. But if we end up having quintuplets or something, that’s another story…
4. We Had A Time Frame
We all know the joke about how Singaporeans propose by asking, “Wanna apply for a HDB flat?”.
I didn’t want our marriage decision to be influenced by an impending house, so I deferred the house-hunting to after the proposal. You know, like how the rest of the world does it.
The downside of that is that we had wait 3 years-ish for BTOs to be completed. Which meant that we either had to live with our future in-laws or rent. We didn’t wanna trouble our parents, and renting is expensive, so we decided to go with a resale flat. That also gave us enough time to complete the renovation before the wedding and move in.
More importantly, this gives me 6 months to learn how to iron my shirts more efficiently and cook a decent meal. I know, I know, I’m completely useless around the house. Not proud of it.
The Biggest Financial Decision Of Your Life
So there you have it, the 4 reasons why we eventually chose a resale flat over a BTO flat. Again, resale flats aren’t necessarily “better” than a BTOs – it all depends on your needs.
Maybe this is me justifying why I spent a whole chunk of my life savings. I don’t know. It’s hard to step outside of your own biases. But we’re happy with our purchase from all angles, and it’s hard to argue with that.
So if you’re in the midst of making probably the biggest financial decision of your life, it’s good to consider all options and not blindly apply for BTOs just because all your friends are doing it.
That way, in 10 years’ time, you’ll get to sit your kids on your lap and bore them a story of how you made a great housing decision too.
P.S: Which do you prefer: Resale or BTO? If you already own a house, I’m curious about what drove your decision. Let me know in the comments below – I read every one.
Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.