How to AVOID Unprofitable Properties
Investing in real estate can be one of the most rewarding ways to build wealth — but not every property is a good investment. In fact, buying the wrong property can quickly turn into a financial burden rather than a profitable asset. Avoiding unprofitable properties requires a careful balance of research, strategic thinking, and due diligence. Edgeprop recently wrote an article on an analysis of 4 Geylang freehold condos that loses money and I will be sharing why my P.L.U.S System works. This guide will walk you through practical steps and essential red flags to watch for, helping you make smarter, more confident investment decisions.
I will be comparing Sims Urban Oasis, a 99 leasehold condo located in Sims Drive and #1 Loft, a freehold condo located at Geylang Lor 24. You can see that over the last 10 years, Sims Urban Oasis grow by 38%, or close to 4% per year while #1 Loft is losing money and if you were to hold for 10 years, the growth is 0%!
Freehold vs Leasehold
Many people assume that freehold properties are always better than leasehold ones, but that isn’t necessarily true. The real value lies in the specific details of the property, the terms of the lease, and the long-term costs, not just the type of ownership.
I do not consider leasehold or freehold when I find profitable properties. I look for other factors like developer reputation, location, no of units, layout, buyer’s profile are all more important criteria than looking for freehold.
Location
People always say “Location, location, location”. This is true to a certain extent. Although both properties are base in the same location in District 14 and both near train station and yet #1 Loft has more amenities surrounding it, Sims Urban Oasis has a higher profit!
While location is undeniably one of the most important factors when buying a property, it is not the only one that determines a good investment. A prime location can attract demand, but other elements like the property’s condition, future development plans, rental yields, market timing, and even management costs play crucial roles in its long-term success. Overpaying for a poorly maintained property in a great area can be just as risky as buying in a less popular neighborhood. Smart investors look beyond the address, carefully evaluating all aspects to ensure the property truly meets their financial goals.
Amenities
Although #1 Loft has more surrounding amenities like eateries than Sims Urban Oasis, it is not as profitable. So though amenities is a bonus, it is not the key main factor that people will want to buy. #1 Loft is also 5 mins walk to the train station but has 0% profit!
We have to consider other amenities and weigh them overall. Not only eateries, convenience shops, distance to train station, we have to also look at the internal condominium facilities such as size of pool, gym, kids playground, etc.
Amenities is not needed but Good to Have.
Layout & Developer Reputation
When it comes to buying a house, many buyers focus heavily on location, price, and size — and while all of these are important, one factor often gets overlooked: the layout. The layout of a home, how its rooms flow and connect, can have a bigger impact on daily life than any other feature. In fact, a great layout can make a smaller house feel spacious, a modest property feel luxurious, and a good investment even better. Here’s why layout should be at the top of your checklist when choosing your next home.
Reputable Developers (OR Public Listed Developers) often go to the ground and get to know people’s wants and needs when it comes to building new condominiums. In fact, they do more often than the HDB. As such, new condominiums is always evolving to meet the needs of home-buyers. For example, after the COVID pandemic, more home-buyers are looking for condominiums with study rooms, bigger living rooms, master bedrooms able to fix King sized bed and enclosed kitchen. For that to happen, buyers are willing to pay more for bigger units and hence you see condominiums layout are getting bigger and more efficient.
1. Everyday Functionality Matters
The way a home is laid out directly affects how comfortably and efficiently you can live in it. Open-plan living spaces encourage a sense of togetherness and are great for families and entertaining, while segmented rooms offer privacy and quiet for those who need dedicated workspaces. A poorly designed layout — like a kitchen far from the dining area or awkwardly placed bathrooms — can make daily routines frustrating. No matter how beautiful the finishes are, an impractical layout will impact your quality of life.
2. Layout Determines How Space Feels
It’s not just about square footage; it’s about how that space is used. A 1,500-square-foot home with a smart, open layout can feel much larger and more comfortable than a 2,000-square-foot home chopped into small, disconnected rooms. Natural light, sightlines, and the flow from room to room all contribute to the feeling of spaciousness. Good design can maximize every square foot and make a home feel inviting and expansive.
3. Flexibility for the Future
A strong layout adapts to your changing needs over time. For example, having a ground-floor bedroom and bathroom can be valuable if you plan to age in place or accommodate guests with mobility challenges. An open-plan living area can be easily reimagined with furniture or partitions, offering flexibility as your family grows or lifestyle changes. Buying a home with a thoughtful, adaptable layout means you’re less likely to outgrow it quickly.
4. Resale Value and Appeal
Even if you’re planning to stay long-term, thinking about resale is smart. Homes with poor layouts tend to linger on the market and may sell for less than similar-sized properties with better designs. Buyers today look for convenience, flow, and natural light — all of which are tied to the layout. A good layout is timeless and appeals to a broader range of future buyers, protecting your investment.
5. Renovations Can Only Fix So Much
While cosmetic changes like painting, flooring, and fixtures are relatively easy and affordable, reworking a bad layout is expensive and complicated. Moving walls, adding bathrooms, or opening up living areas often require permits, structural engineers, and significant construction costs. Choosing a home with a great layout from the start can save you from costly renovations down the road.
No of Units
Number of Units in a development is also important. I have always been advocating developers more than 150 units minimum, the more the better. This is due to 2 reasons.
1. More Facilities
With more people staying in a development, the land size is bigger, with bigger land size, more facilities can be build on it. Note, in Singapore, developers has to maintain a maximum of 40-60 ratio where maximum 40% of the land use must be a building, rest must be facilities. There are some condominiums where land use is 20-80 ratio!
2. Maintenance Fee
More people sharing the facilities will leads to lower sinking fund hence lower maintenance fee. Small development, although has the privacy, usually has much higher amount of sinking funds which may turn off some resale buyers.
Buyer’s Profile
Last but not least, Buyer’s Profile to be is the most important factor to determine if a property is profitable or not. Before investing in a property, ask yourself this, how much can I sell for in future, will the profile of my buyer be able to afford my property? Do they see value in buying my property? Will they be able to make money if they were to buy my property?
With a broad buyer’s profile, there will be higher demand for the property. Higher demand means higher price. Simply put, if there’s no demand for a property, it won’t matter how beautiful it is or how well it’s priced. Demand determines how easily you can rent it out, how quickly you can sell it, and how much profit you can ultimately make. Properties in high-demand areas experience lower vacancy rates, higher rental yields, and better price appreciation over time. Strong demand also gives investors more flexibility, whether they want to sell quickly or hold long-term. In contrast, a property with weak demand can become a costly liability, sitting empty and eating into profits. In property investment, it’s demand that drives value — and without it, even the most promising property can turn into a poor investment.
In real estate, avoiding unprofitable properties comes down to thorough research, clear strategy, and disciplined decision-making. It’s not enough to fall in love with a property’s appearance or location; investors must dig deeper into market demand, layout efficiency, long-term costs, and potential growth. By carefully analyzing each opportunity, questioning every assumption, and staying focused on both immediate returns and future resale value, you can significantly reduce your risk and build a portfolio that truly performs. In property investment, success isn’t about luck — it’s about making smart, informed choices.