The Real Cost of Funds, Renting vs Buying & The Power of Leverage in Real Estate | NOTG S3 EP 62

Grace, you shouldn't use the concept of OPM when it comes to leverage. OPM is used for fund mgmt when there investors put their capital at risk and anything happens they absorb the loss. In property; anything happens , you have to pay back the bank in full plus interest.

While you are a very good agent please be careful with your terminology. Borrowing is not using other people's money as the capital loss sits with you.

You sure billionaires borrows heavily using their own names to buy properties? Have you had any surveys or actual interviews by an X numbers of billionaires on this?

Melvin regarding comparing using 1% liquid cash is not correct. As you said pvt property locks you 3yrs or more. So comparing 6months tbill is at least somewhat correct. Or 1yr tbill to be fairer. But to use 0 to 1% leaving it as cash is not a correct comparison.

Also on the 8mil property becoming 12mil.. well quite wishful right. Theres an argument that priv property went up too much too fast that the equation is so completely skewed(overpriced) , hence that property could be 6mil or 7mil. Double whammy of monthly bleed and depreciation

Very good video NOTG. I like this approach where key issues are debated. Its better than 2 years back when all you preach is fomo and landed to the moon.

Yurong is right. Renting is better than buying as long as rates remain high. I pay 20k rent for a 15mil modern bungalow that the interest and opportunity cost is 50k a month and another 30k more for principal payments. With this i disagree that renting is only good short term.

You have left out opportunity cost where i can generate 6% reits or 10% in other investments. By then my money grows way faster than if i own, even if longer term horizon. Rates down and my investments will rocket too.

Fundamentally as long as landed homes rental are 1.5% my cost of shelter is so cheap, giving me ammo for other things.

And the guy on the right mentioned that after 30years you have a property and its free. Its not free. You have an implied opportunity cost of say 5M or 10M stuck there.

Of course the counter argument for everything is capital appreciation but there is downside risk too

pls compare UOBAM Invest Cash+ Xtra etc tks