What to do if you are holding on to a property that is losing money?

No one will expect to buy a property and hope the value of the property to go down. However, sometimes the market may move in the direction opposite to how we expect it to be. Fluctuations in the property market is inherent and we should expect changes in the property value.


What to do if you are currently holding on to a property that is losing money?


While it is painful to sell it now. on the other hand, you may be wondering if you should be holding it out for future appreciation.

Here are 5 things you can consider if you are holding on to such a property:


1. Cut loss

If you are holding on to a property that you do not expect any future appreciation in value, one of the best ways is to sell it off and cut your loss. In cutting lost, you may still manage to get some your investment value back. You will lose some money but at least, you will not be losing more.

Sometimes, the best way out could be to just move on from a bad investment. Get out of it as soon as possible before the property value depreciates even more.

Some of us may think that I can stay in the property till the end of the lease. Even if the value becomes zero, it doesn’t affect me. That is true. However, do consider if you will want your next generation to inherit your property. How much value will you preserve when you pass on to them?

Example of leases run out with no compensation:

Geylang private homes to be returned to the State when leases expire in 2020, no extensions allowed

The Strait Times, Jun 2017

2. Hold on if you expect future appreciation

If the property value has depreciated, it could be due to the market fluctuations. Property prices usually increase over a long period of time. Therefore, the key thing to do now is to do an assessment of the property market trend, especially on the expected changes in the price of your property. As each property is unique, do note that even if you expect the overall property prices to increase in value, that may not be always be applicable to your property.

Of course, if the property you are holding can appreciate over time, you can consider holding on till the value increases. Do consider in this situation, how long do you expect to hold out for this to happen? At the same time, can you afford to hold on to this property while you wait for your property to appreciate?

URA Index: There may still be a chance of recovering


3. Can rental income cover the decrease in price?

You can also try renting out the property to recover from the losses. Perhaps your property has lost $30k in value, but if you can get a $30k rental income from it, you may not lose any money after all. It will be even better if there is a future price increase while you are renting out the property.


4. End value of the property? Enbloc?

If you are expecting an enbloc on your property, you may hold out the property till that happens. Hope that a developer will buy your unit with a good price. Consider the chance of that happening and the impact of it.

Just to note, no one can be absolutely sure of what is going to happen in the future.

Example: Enbloc

Don’t assume all old HDB flats will become eligible for Sers, cautions Lawrence Wong

The Strait Times, Mar 2017


5. Re-investing into another asset

Always consider the opportunity cost of your investment. If holding on the property in the long term gives you a negative return, you may consider selling it and re-investing into a better returning asset with positive returns. Instead of getting an income from rental just to break even with the depreciation in value, selling and re-investing may get better returns.

Do calculate and compare the opportunity cost of holding on to this property to that of re-investing into another asset.



Prevention is better than cure. Before making any property purchase, a good approach is to do a proper analysis on the property market and decide what is a good property investment. Is this the right time to buy a property and is this the right property to buy? Proper planning and proper risk management are keys to a successful property investment.

If you have any queries on property investment, you can contact me:

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