MR S. Cai, 50, sleeps soundly every night even though he has taken on two mortgages totalling more than $1.3 million after snapping up two investment properties recently.
The businessman, who is 'very bullish' on the property market, has sold most of his share portfolio and is ploughing a considerable sum, including savings, into property.
But he breezily declares he 'wouldn't lose a wink of sleep even if the market crashed'. This is because he swears by what he calls the 'first rule of property investing' - ensure you do not overstretch yourself.
'Generally, people should keep aside enough cash to cover one year's worth of mortgage payments. But I set aside three years' worth just to play it safe,' says Mr Cai, who runs a construction firm and two bakeries.
Banks were still willing to grant him approval for his second home loan not just because he earns a six-digit annual salary, but also because he has more than enough cash stowed away for a rainy day.
Mr Cai, who lives in an HDB executive flat, took out a $350,000 loan to buy an apartment at Pearl Bank near Chinatown in September last year.
Two weeks ago, he zoomed in on an old apartment in Goodwill Mansions in Balestier requiring an extra home loan. He has applied for a loan that covers 80 per cent of the valuation of the unit, but declined to name the total amount.
These two investments may not have the speculative appeal of high-end units in Marina Bay, but they caught Mr Cai's eye because of their 'attractive rental yield and potential for collective sales'.
'The rental yields are easily 4.5 per cent, even in bad times, so they will cover interest payments. For the Pearl Bank unit, which has a higher potential of going en bloc, I applied for a loan that has a one-year penalty, so that I would not have to pay as much interest.'
