"Never buy a property with less than 60 years left on the lease." I've said some version of this to clients myself, more than once. The Bala curve — one of the most widely used valuation concepts in Singapore property — backs it up: as a lease shortens, the underlying value of the property tends to decline. So when I bought a HDB shophouse with less than 60 years remaining on the lease, a few friends genuinely asked why I'd choose the one asset in my portfolio that's depreciating.
It's a fair question. If I'd looked at this purchase purely through the lens I used ten years ago, I probably wouldn't have bought it either. But I wasn't looking at it through that lens anymore, and that's really what this post is about — not a case for buying short-lease property, but a case for why your investment framework should evolve as your portfolio does.
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The Question That Changed How I Evaluate Property
When I started investing, every property decision revolved around one question: will this appreciate? Everything was about capital growth, because I was still building my base.
Almost 20 years into this industry — and about 10 years into investing for myself — my situation looks different. My wife and I each already own a residential property. Between the two, we've maxed out our residential exposure, and we already hold assets we expect to keep growing over both the short and long term. So before buying this shophouse, I asked myself a different question than I would have a decade ago: not "which property will appreciate the most," but "what does my portfolio actually need right now?"
That answer wasn't another growth asset. It was cash flow — a recurring income stream that wouldn't come with another monthly mortgage commitment on top of what I already carry.
I think this is a mistake a lot of investors make, on property and elsewhere: expecting every single asset to do everything at once — maximum appreciation, maximum yield, a short exit, and a long lease, all in the same purchase. That combination rarely exists. Some assets are there to grow your wealth. Some are there to protect it. Some are there to diversify risk or generate income. Trying to force one property to do all of it usually means waiting indefinitely for a "perfect" deal that never shows up — or worse, doing nothing at all.
Three Reasons I Bought a HDB Shophouse Built in 1980
This wasn't a plan I'd been chasing — it was an opportunity that fit a specific set of needs once it appeared.
1. It wasn't subject to ABSD. Additional Buyer's Stamp Duty applies specifically to residential property — 20% for a Singapore Citizen's second residential property. It doesn't apply to commercial property at all, for any buyer. This particular HDB shophouse is purely commercial, with no residential component, so it fell outside ABSD entirely — not through any workaround, just because the tax was never designed to touch commercial property in the first place. On a purchase price of roughly $2 million, that's a genuine $400,000 difference in acquisition cost compared to buying a second residential property. Worth noting: this only holds for a purely commercial unit — a shophouse with residential quarters attached would have its residential portion counted for ABSD, so this isn't a blanket rule for every shophouse on the market.
2. Growing net worth without another monthly commitment. I already service mortgages on two residential properties. Adding a third growth asset would mean adding another mortgage on top of what I'm already carrying. I'd rather have the breathing room to spend on the people and things that matter, rather than aggressively stacking more monthly commitments just to keep expanding the portfolio.
3. I'd already accumulated enough asset value for retirement. My first property was a negative sale, and for years afterward, every purchase had to move me a step closer to my next upgrade — that was the correct strategy at that stage. But today, with one son and the residential asset base we already hold, I don't need every future purchase to be a growth bet. That freed me to ask a different question: not "how do I grow further," but "what does the portfolio need now."
Not a Growth Play — a Cash Flow Decision
Before committing, I ran one honest gut-check: strip out any assumption of appreciation entirely, and ask whether the property still made sense purely on the rental income it generates today. This shophouse brings in roughly $8,500 a month in gross rent. I'm not treating that as a precise return calculation — there's vacancy, maintenance, property tax, and income tax to account for, and I'm not discounting those future dollars back to today's value, which any proper return comparison should do. What it does tell me is simpler: this is an asset that adds real, recurring income to the portfolio without adding another mortgage — and that's specifically the gap I was trying to fill at this stage, not a claim that it beats every alternative investment on a risk-adjusted basis.
If you're earlier in your property journey and still building your base, this probably isn't the right move for you — and that's exactly the point. This wasn't a "here's what everyone should buy" post. It was a case for asking whether your current strategy still matches your current stage, rather than running the same playbook indefinitely.
Final Thoughts
If you'd asked the version of me who bought his first few properties, I wouldn't have touched this deal — back then, capital appreciation was the only question that mattered. Your investment strategy should evolve as your life and your portfolio do. Don't be afraid to change the question you're asking, because different stages call for different priorities.
If you're trying to figure out what your own portfolio actually needs right now — more growth, more cash flow, or something else entirely — that's a conversation worth having before your next purchase, not after.
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