Stay in a dual key condo unit with no extra cash payment [case study]


Dual key units all along have been a choice type of residential property for developers to market because its popularity among homeowners and investors. What is a dual key unit? What makes one so attractive as a place to stay or as an investment property?

One reason is that dual key units can provide a source of income in such a way that a homeowning couple can buy a unit and be cash flow positive. That is, the salary, CPF and rental income fully covers the mortgage payments.

What are dual key units?

Dual key units aren’t a special term used by the URA in the same manner as SOHO is. Rather, the term dual key had simply been adopted by developers seeking to market a type of property where there are two homes sharing a common foyer in single title.

As a homeowner, one advantage of a dual key unit is its versatility in housing different sets of families under the same roof.

For example, in the three bedroom section, a newly wed couple can stay with their children or pets. In the studio section, the parents can use it as their living quarters.

One advantage of dual key units is the sharing of a common foyer but with some form of privacy. The newly wed couple can go about their daily living such as cooking, cleaning and taking care of the kids or pets, while the elderly parents can live their own private lives in the adjoining studio unit. There will be minimal crossing of paths because the 2 sets of living areas are separated by a foyer.

The following are 2 common permutations for a homeowner or investor.

  1. Living in the 3 bedroom living area while renting out the studio unit, or
  2. Renting out the 3 bedroom living area and studio unit separately, each with their own tenancy agreements. This essentially increases the amount of rental income that the investor can get than if there were no dual key setup.

This post will focus on number 1, which is for the home owning couple to live in the main section of the dual key unit while renting out the studio unit.

Let’s look at a real life case on how a homeowning couple can stay in a dual key condo unit for free and not fork out extra cash for the mortgage payment.

Background of homeowning couple

In this case, there are two people – ET and S.

Both of them cannot qualify for public housing due to their income exceeding S$14k.

Each of them earn about S$7-8k a month, and both have S$250k in their CPF account. Both of them are Singaporean.

Both of them work in the CBD and want a place that is relatively new and close to town.

This couple has been viewing houses for the past year but could not find anything suitable. Most HDBs they viewed were too old for their liking.

As with many other investors and home-seekers, the couple does not want to be weighed down by a heavy mortgage payments. At the same time, they desire something they can sell easily in future. The ideal location of the unit is one close to an MRT station.

Both want to stay in a private condo, but cannot qualify for an EC.

What are their options?

The first option is a resale HDB flat at Pinnacle at Duxton which is very close to their workplace. The 990 sqft 4 room flat is 5 years old and costs around S$900k.

The second option is a resale or brand new condo in town at about S$1.3m. Some of the options the couple saw were very old and poorly maintained. For the S$1.3m budget, they can only find a 1 bedroom unit in town e.g. The Sail at Marina Bay.

A dual key condo unit as the solution

With the above 2 options not likely to meet the couples needs, a dual key unit e.g. Sims Urban Oasis would best suit their requirements.

Taking a Sims Urban Oasis 3 bedroom condo unit at S$1.2m, the couple will not need to fork out any cash to service the monthly mortgage.

How would this work?

The unit in question would be the following 3 bedroom unit of 958 sqft at Sims Urban Oasis. The studio unit on the left would be leased out while the couple will stay in the unit on the right.

Sims Urban Oasis 3 bedroom unit
Sims Urban Oasis 3 bedroom unit

Here’s the math

S$1,380 goes into each of their CPF accounts on a monthly basis. The total is S$2,760 per month.

CPF calculation S$6,000 salary per month


How much are other studios being rented out at?

Metro Loft and Centra Suites in the vicinity have 1 bedroom units of about 400 to 500 sqft being rented for between S$1,500 to S$1,900 per month.

Why should the couple choose Aljunied and not a condo in another neighbourhood that has dual key units?

Aljunied has the highest yield in Singapore by neighbourhood and along the East West MRT line according to SRX.

What’s the monthly mortgage?

At a unit price of S$1.27m, the monthly mortgage will work out to slightly below S$3,600 per month.

Monthly mortgage payment for approx S$1.2m unit
Monthly mortgage payment for approx S$1.2m unit

Salary and studio rental fully covers mortgage payment

Combining the S$2,760 CPF amount credited into ET and S’ account every month and the studio rental income of between S$1,500 to S$1,900, the couple will not need to top up any cash from their pocket for the dual key unit.

The following chart illustrates the 1) Monthly mortgage payment of S$3,600 for buying the 958 sqft unit at Sims Urban Oasis 2) Combined CPF amount of S$2,760 credited into ET and S’ account and 3) If the studio unit were not rented out, ET and S need to do a cash top up of S$840 (S$3,600 minus S$2,760) to pay the monthly mortgage.

If the studio unit were rented out at a conservative figure of S$1,500 (actual rental may be higher based on comparable transactions), the couple will not need to top up extra cash to service the monthly mortgage. In fact, they will have a net inflow of cash.

If the studio unit were rented out at a higher rate of S$1,900 per month, the couple will have a higher net cash inflow amount.

Net cash inflow after accounting for income and expenses
Net cash inflow after accounting for income and expenses

What’s the difference with getting a resale HDB or condo?

In a resale flat, the couple can lease out a spare room, but this will compromise on their privacy. In a dual key setup, the studio is separated from the main living area by a foyer.

For the same size (990 sqft HDB vs 958 sqft brand new condominium), the couple can stay for “free” by leasing out the studio.

In future when the couple have kids, one set of parents can stay in the studio unit with them.

The condo is brand new compared to resale units.

Sims Urban Oasis has condo facilities, is walking distance to the MRT and about 5 MRT stops to Raffles Place. Compared to Park Place Residences at Paya Lebar going at S$1,800 psf, Sims Urban Oasis is more competitively priced.

Hopefully this illustrates for you how much versatility and cash inflow a dual key unit can bring you.

Happy house hunting!


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