Thursday, 5 August 2021

Busting property investment myths with data: from engineer to real estate agent

*Produced by SilverKris for Datacrunchrealestate*

Career pivots are a hot topic these days. And Eugene Cheng has one of the most interesting career pivot stories around. The founder of Datacrunchrealestate spent nine years as an aircraft engineer when he felt the call for more creativity and freedom.

“I tried to find different ways to earn money outside the nine to five,” Eugene recalls. He started by leveraging his passion for travel photography to earn a living as a wedding photographer. To support his business, he had to learn the principles of digital marketing, even doing freelance copywriting and website development for an agency overseas.

Eugene brings his background in science and photography to real estate

Steve Jobs famously said, “You can only connect the dots looking backwards.” And it wasn’t until Eugene discovered the world of real estate in Singapore that all his previous experiences fell into place. His love of formulas enables buyers to make wise real estate investment decisions, while his photography and marketing skills make Datacrunchrealestate a great partner for those looking to sell their property.

Here he explains how he approaches his work, and what common myths he is trying to dispel.

What insights from previous industries do you bring to property investment in Singapore?


With my engineering background, the real estate investing formulas came easily to me. These formulas will be able to show whether the property you’re considering is likely to double in value or lose 10–20% of its value within the next 10–15 years.

If you’re looking to sell or rent out your home, I can take professional photographs and 360 virtual tours. Professional photographs tend to draw more people and fetch a higher selling price, while the 360 virtual tours help weed out casual browsers.

Eugene uses real estate formulas to evaluate the investment potential of properties
Eugene uses real estate formulas to evaluate the investment potential of properties

Tell us about the name of your company – what formulas do you rely on?


I chose the name because I like crunching data to figure out which properties have the potential to be real estate investments in Singapore. There are three formulas that work for the Singapore market: the Gross Rent Multiplier, Income Capitalisation Rate and Time Value of Money Formula. These formulas, together with the history of transactional prices in the immediate vicinity of the property you are looking to purchase, can guide you in choosing the best residential property with the highest possibility of capital gain.

What would you tell those who are looking to sell or purchase during the pandemic?


Those looking to buy this year, follow the real estate investing formulas. If the unit is overpriced, nothing else, not even the location, amenities or proximity to famous schools will increase the value much in the next 10–15 years. If you are looking to sell, sell with the intention of buying another property to ride the rising wave. From what I’m seeing, the real estate cycle has not even reached its peak yet.

360 tours for real estate
Professional equipment gives Eugene’s work a competitive edge

What common myths do people fall victim to?


Firstly, not all properties will increase in value. Check out Edgeprop’s weekly article on the top gainers and losers in the residential property market to see what I mean. Secondly, location is not the biggest factor in determining whether your property will increase in value. It will only increase when the asking price is close to the market value of the property. And lastly, the rental yield of the property is not the most important in the Singapore property market because the receivable rent is usually not enough to cover even the lowest monthly mortgage. I’ve seen outliers, but they are not common. That’s why you should look out more for the potential capital gain for the property you are looking to purchase.

Penrose Singapore artist's impression
New launches have been proven to be great real estate investments if you follow the real estate investing formulas

How does the URA Masterplan figure into your real estate calculations?


The URA Masterplan dictates what the government plans to do for every plot of land in Singapore. Given that the biggest variable in real estate investing formulas is the receivable rent – the higher your asking rent, the higher the market value of your property will be – it’s a good idea to purchase in a location slated for more offices instead of nature parks.

Also, as the URA Masterplan is not fixed in stone, choose locations where the government is unlikely to push back or change the planned redevelopment. For example, the Tanjong Pagar Terminal lease is set to expire in 2027 and Paya Lebar Airbase is set to be relocated from 2030 onwards. These are good locations to consider for property investment in Singapore as the redevelopment would be difficult to change when the leases end.

Eugene shoots professional photos for his clients
Eugene shoots professional photos for his clients

Scan the QR code below to visit the Datacrunchrealestate website and find out how Eugene can help. This article should not be used as a replacement for personalised, professional guidance. 



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