Real Estate Investing Case Study: Urban Vista


A case study using real estate investing formulas and research on a previous new launch Urban Vista. I am assuming I am planning to buy a 3 bedroom 797 square feet low-floor unit at Urban Vista in May of 2013. So I will just use the transaction records of the surrounding condos, East Meadows, The Tanamera and Casa Meadows, up to May of 2013.

I don’t take into account the Masterplan, who the developers are or even the location because I just want to show you how the calculations can tell you alone if it was worth buying Urban Vista back in May 2013.

NameUrban VistaEast MeadowsThe TanameraCasa Merah
Tenure99-Year Leasehold99-Year Leasehold99-Year Leasehold99-Year Leasehold
Address (Multiple)Tanah Merah Kechil Link, 465417, Bedok / Upper East Coast Tanah Merah Kechil Road, 465558, Bedok / Upper East CoastTanah Merah Kechil Road, 466663, Bedok / Upper East CoastTanah Merah Kechil Avenue, 465524, Bedok / Upper East Coast
Number of Units582482288556
Bedroom(s) Type1 – 5 Bedrooms2 – 4 Bedrooms1 – 3 Bedrooms2 – 3 Bedrooms

Mini Conclusion

Here are the observations

On May 2013, the calculations for Urban Vista are showing the following

  • The calculated market value of the 3 bedroom 4th floor 797sqft Urban Vista Condo in 2016 when it’s due to be completed was between S$1,012,468.23 and $1,123,928.02 depending on whether a 2% or 3% growth rate is used and depending on which condo you are comparing against.
  • In May 2013, the 3 Bedroom 4th floor 797sqft unit was selling at a developer price of S$1,216,433.00 which means you will be purchasing this unit at around S$200K above market value based on 2% growth rate (Worst Case Scenario).
  • As an real estate investor, who is clearly looking at just the capital gain appreciation potential and possibly cashing out at TOP, this would not a unit I would consider investing my money in as the numbers are showing that I would be overpaying for a unit and I know that once I’m overpaying for a unit, the annual growth rate will drop to between 0 – 1% on average.
  • As a potential home-owner, at least I am aware of this number and know that I am purchasing this unit purely because of the location or layout that I like.
  • On October 2021, this particular 4th floor unit was sold at S$1,000,000. Netting the purchaser a loss of at least S$216K after 8 years of holding the property. Considerably more if you count the bank interest paid for the home loan for 8 years.
  • Furthermore, extrapolating the 2016 market value numbers that we are seeing to the year 2021, the calculations are showing it to be worth between S$1,118,857.30 – S$1,305,573.65 in 2021 which means that this unit was sold undervalued at S$1,000,000. When we look at the next 4 transactions after this unit was sold, we can see that the units, although slightly larger and at a higher floor, were transacted at these range of numbers
Unit NumberUnit SizeDate SoldSale Price
#09-XX850 sqft17 November 2021S$1,150,000
#07-XX850 sqft16 December 2021S$1,150,000
#12-XX893 sqft29 December 2021S$1,288,000
#10-XX850 sqft18 January 2022S$1,120,000
Take these numbers with a caveat as there are many factors in play for resale units. These factors may include the condition and layout of the unit and how urgent the seller needed to sell the unit to get the funds.

Interested to know how these calculations are done and how I’m getting these numbers, do continue reading!


As mentioned above, we are assuming that I am interested to buy a 4th floor, 797sqft, 3 bedroom new launch called Urban Vista in 2013 and will use real estate investing formulas to calculate and see if it’s a real estate investment or not.

This calculation is done be comparing it with 3 units of similar size and bedrooms of different condos near Urban Vista.

The three surrounding condos are as follows

Condo NameUnit NumberUnit Size
East Meadows#04-XX1356 sqft
The Tanamera#13-XX1303 sqft
Casa Merah#01-XX1270 sqft

Surrounding Condos Transactions

East MeadowsThe TanameraCasa Merah
Unit Bought1 September 2009 at S$912,00018 August 2006 at S$480,00017 June 2009 at S$850,900
Unit Sold8 March 2013 at S$1,260,00022 April 2013 at $1,180,00012 March 2013 at S$1,458,000
Number of Months428044
Growth Rate9.27%13.57%11.93%

This growth rate numbers are usually a sign of a property bubble. In Singapore, if you are purely in for investment and already own a unit with the surrounding transactions in your condo showing these numbers, I do highly recommend to sell it to lock in the capital gains and look for another unit elsewhere to grow your investment as it is very hard to sustain such growth. Naturally if you are buying to stay, then this plays a lesser role.

Calculation of Growth Rate (East Region)

The annual growth rate for the east region based on SRX Property Index from March 2006 to March 2013 is 11.93%.

Again we are seeing numbers that are not at a sustainable level for property. And as a result, we should take a conservative estimate of either 2% or 3% for the formulas used later for a realistic approximation of the market value of the Urban Vista unit. For an example of how I derive these numbers, take a look at the link ‘The Annual Growth Rate of Real Estate Investing

Real Estate Investing Formulas used

Before we begin, note that these formulas are usually used for properties which are already existing, similar in age and size. Urban Vista was only due to be completed in 2016 and will be considerably newer than the other condos. See more in the conclusion section.

Gross Rent Multiplier

The Gross Rent Multiplier Formula for the three condos for a 3 bedrooms unit are as follows

East MeadowsThe TanameraCasa Merah
Sales PriceS$1,260,000S$1,180,000S$1,458,000
Annual RentS$42,000S$42,000S$45,600
Gross Rent Multiplier30.000028.095231.9737

The average Gross Rent Multiplier is 30.0230

With the following assumptions taken

  • Lowest rent taken into calculation for Annual Rent for conservative purposes
  • Calculation of the lowest and highest rent taken for the year 2013 for the 3 condos
    • East Meadows (Lowest: S$3,500/Month | Highest: S$4,350/Month)
    • The Tanamera (Lowest: S$3,500/Month | Highest: S$4,500/Month)
    • Casa Merah (Lowest: S$3,800/Month | Highest: S$4,530/Month)

Income Capitalisation Method (Modified)

Using the Income Capitalisation Method Formula, the Cap Rate for the 3 condos are calculated as follows

East MeadowsThe TanameraCasa Merah
Annual Net Operating IncomeS$26,840S$26,840S$29,396
Market ValueS$1,260,000S$1,180,000S$1,458,000
Cap Rate0.02130.02270.0202

Cap rate = Annual Net Operating Income / Market Value
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss) / Market Value

The average of Income Capitalisation Rate is 0.0214.

Assuming the following

  • Expected Maintenance and Repair is 0
  • The maintenance fee for Urban Vista is assumed to be 300 SGD

Calculation for Urban Vista using Cap Rate and Gross Rent Multiplier

Using Gross Rent Multiplier for Urban Vista

For the assumption of rent for Urban Vista, we assume to be S$2,057.15 – $$2384.72 as the 3 bedroom units for Urban Vista are considerably smaller at 797 sqft.

Using the average GRM of 30.0230 and multiplying it with the various lowest rent to find the sales price for Urban Vista based on which condo we are comparing with, we get the following

  • Comparing with East Meadows = S$741,142.36
  • Comparing with The Tanamerah = S$755,055.16
  • Comparing with Casa Merah = S$859,158.23

Using Income Capitalisation Method for Urban Vista

Market Value for Urban Vista = Net Operating Income / Cap Rate
= (Rent Income – Property Tax – Property Insurance – Annual Maintenance Fees – expected Maintenance and Repair – Vacancies Loss)

Using the same methodology as used for the GRM, we calculate the market value of Urban Vista as follows

  • Comparing with East Meadows = S$672,031.29
  • Comparing with The Tanamerah = S$692,458.13
  • Comparing with Casa Merah = S$806,718.04

Where the following assumptions are made

  • The maintenance fee is 300 SGD (Assumed)
  • Expected Maintenance and Repair to be 0

Using the Time Value of Money Formula

Using the Time Value of Money Formula and using the worst-case scenario with growth rate percentage of 2% and 3% and the years difference between Urban Vista and the surrounding three condos, the price we should be looking to pay for a 3 bedrooms 797 sqft 4th-floor unit would be between S$1,012,468 and S$1,123,928.


Back in May 2013, the asking price for Urban Vista 4th floor 3 bedroom unit was S$1,216,433.

As a real estate investor, I would choose another condo to purchase because as at its worst case, I am buying a unit that’s almost 200K above market value and I know that once a condo (new launch or resale) is purchased above market value, there would be only minimal expectation of growth rate appreciation for my unit.

As someone looking for a new home, I would know this number and then decide if buying S$200K above market value is worth for the convenience, amenities and location.

As a real estate investing consultant, it is not for me to persuade you to buy or not to buy your next home for investment or homestay. My duty to my buyers is to show you the growth rate and expected appreciation for any property in the market now.

Congratulations! If you’ve read to this point, you are probably really looking at buying a residential property within the next few years and I would consider it an honour to be your property agent.

There are several advantages when I represent you in buying a residential property (New Launch or Resale)

  • No commission required to be paid by you for Private Properties (Resale or New Launch). Probably the biggest advantage. If I represent you, either the developer or the owner pays me the commission, not you.
  • A free real estate investing report with calculations on your preferred unit will be done for you upon meetup. For new launches, I will also pass you all the floor plans, e-brochures, pricing and launch price discounts (if any).
  • If you are looking to buy a unit for investment, I will research the best unit type this condo has to offer to provide you with the maximum returns from your investment money.
  • If you are looking to buy for your own stay, I will research and let you know the best floor level and direction facing and layout type within your budget to maximise your future sales price. If the calculations are not favourable, at least you will know how much extra you will be paying for. The decision whether it’s worth it to purchase lies with you.

My obligation is only to you. You can look for me for advice for anything real estate related, any time and any day. I don’t work for anyone else and have no obligation to sell this development for them and therefore, I have no need to pressure you to buy anything. If you want to buy, buy, otherwise, we move on and will look out for another unit that is more suited for your needs.

I am part of a team that is very strong in financial calculations. If you are really looking to buy, my team will find different ways and different means to make sure you will be able to afford it. Throw us questions and problems you are currently facing and which your previous agents are unable to answer, let us impress you with what we can do to get you your next home.

Buying a condominium (especially for a new launch) for anyone is most probably one of the biggest ticket purchase in their lifetime

Think of me as your friendly and knowledgeable real estate investor friend who only has your interest at heart and is firmly committed to providing you an honest advice on your home as a real estate asset.

What are you waiting for? Let me know how I can help you


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